I am not an expert on accounting rules, but I think the Matterport problems are specifically associated with timing. Matterport became listed through the SPAC route in 2021. All pre-public employees who have stock options (not RSUs) are likely to be in the money through out the time period these days and are likely exercising, forcing these to now become part of the books. Those who got RSUs (likely after they went public) are also to find themselves after the cliff period of, typically 1 year, and hence also to be in the books.
The combination of these two might be creating a higher-than-normal SBC number and is likely to be the case for the first few years of their public-existence. Then hopefully it should normalise.
I am more worried about how much of investor dilution happens in very mature companies like GOOGL and META - these companies have none of the timing issues I mention above.
Thanks for taking the time to reply CCI. This article has hammered home to me why some of the more knowledgeable fintwit/Substack authors are so keen on non-dilutive companies like CSU/Topicus, Swedish serial acquirers and JDG for example
Great article - this is one of the myriad reasons I exited S. (exit will probably be as ill timed as my purchase, as everyone seems to be throwing themselves at AI now)
And by the way WFT Matterport?
Correction ...WTF Matterport?
I am not an expert on accounting rules, but I think the Matterport problems are specifically associated with timing. Matterport became listed through the SPAC route in 2021. All pre-public employees who have stock options (not RSUs) are likely to be in the money through out the time period these days and are likely exercising, forcing these to now become part of the books. Those who got RSUs (likely after they went public) are also to find themselves after the cliff period of, typically 1 year, and hence also to be in the books.
The combination of these two might be creating a higher-than-normal SBC number and is likely to be the case for the first few years of their public-existence. Then hopefully it should normalise.
I am more worried about how much of investor dilution happens in very mature companies like GOOGL and META - these companies have none of the timing issues I mention above.
Thanks for taking the time to reply CCI. This article has hammered home to me why some of the more knowledgeable fintwit/Substack authors are so keen on non-dilutive companies like CSU/Topicus, Swedish serial acquirers and JDG for example
Perhaps this thread I wrote on Twitter might be of interest to you? https://twitter.com/shreeni/status/1656952230916894728
Great article - this is one of the myriad reasons I exited S. (exit will probably be as ill timed as my purchase, as everyone seems to be throwing themselves at AI now)