Hedgeye Communications analyst Andrew Freedman touches on the outlook of bubble stocks in #Quad4 and the importance of stock based compensation for Snap, Inc. (SNAP) in this complimentary clip from The Call @Hedgeye.
“There’s no scale in this business, it’s only delusion. It’s basically just smoke and mirrors in many ways. The business is scaling but not in the way that you really want to see it,” explains Freedman. “The fact is that if we are in a rip roaring #Quad2 or #Quad1, I’m not going to be sitting here b*tching about stock based comp, because it doesn’t matter. But when you’re in #Quad4 and revenue growth is slowing, when free cash flow actually matters, and bubbles are imploding; you have to pay attention to the balance sheet.”
“This quarter is exactly what happened in the year 2000. The bubble was already blowing up in multiple places, but then it got to the mainline of the market, then everyone got to talking about things like this,” notes Hedgeye CEO Keith McCullough.
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