r/wallstreetbets • u/TheNewEthlite • Feb 06 '23
Service Now CEO sells 93% of his Shares friday $NOW DD
DD:
https://twitter.com/HedgeVision/status/1621637184678682625
Missed Earnings
CEO and other insiders selling:
Busted growth story
Products will get margin-squeezed as "AI" companies come in and eat their lunch
You know what to do...
posn: short 100 shares @ $463
114
68
u/VisualMod Turing Test Proctor Feb 06 '23
I'm short 100 shares @ $463
40
u/Moist_Lunch_5075 Feb 06 '23
Brokerages will give trading accounts to anyone these days, even if they're not people.
2
8
7
67
u/gg_dweeb Feb 06 '23 edited Feb 06 '23
"AI" companies aren't going to eat their lunch. They've been selling "AI" services for years now. This post reeks of a person not knowing what they're talking about a making up a narrative they think fits.
Its an over priced product and the stock is way overvalued, but there's little to no competition for them and their product spreads like cancer through IT orgs. Not sure how it could be a "busted growth story" when they're literally the market itself if not the market leaders.
10
u/Gold_Sky3617 Feb 06 '23
This is so true. The product is built to sell because sales can say it does and connects to anything but actual implementation and administration of all the things management was sold on is another story. I mean it’s great if you have the time and money to get it there but holy fuck it’s expensive to set up and maintain.
2
u/gg_dweeb Feb 07 '23
yep its pretty much a blackhole of money if you want to really use it "properly" and its full functionality
4
u/fykup Feb 07 '23
The CEO is an ex-CEO of SAP. He basically repeats the same successful model of sharing the market with consulting companies, who do the customization/extension and maintenance. This drives further growth and expansion to other clients.
I wouldn't be that worried about him selling the stock. It's essentially the first time period in the last 12 months when the stock corrected (not $NOW specific issue, applies to other enterprise companies). Good time to convert some stock to cash. I own $NOW and I did the same, except I sold around 491 :)
1
1
u/Maakus Feb 07 '23
If you have an experienced configuration team, SNOW is the best workflow software out there.
If you do not, the company will be burning millions a year, esp. with lost time of everyone using a garbage configuration.
3
u/Gold_Sky3617 Feb 07 '23
Oh I totally agree. I lump that “experienced config team” into the costs because getting and keeping those people is $$$.
1
u/Wounded_Hand Feb 07 '23
But a PE of 300? And you didn’t address the CEO liquidating his ownership. Seems like a reasonable play.
2
u/gg_dweeb Feb 07 '23 edited Feb 07 '23
I said it was over valued. My issue is with the characterization of the company, it speaks to lack of knowledge about the actual business. I’m not really worried about the CEO cashing out, he’s only been there for 2-3 years. The business itself is still making tons of cash and is operating the same way it did before he came on. It’s always seemed to me they hired him because it looked good that he was from SAP, not that he was critical to the business
109
u/Wonko-D-Sane Feb 06 '23
TIL Service Now is a company, not some shitty home-brewed front end that my incompetent corporate IT made themselves. I can't believe my employer was dumb enough to pay for that, but then again, we literally have a license for everyone of of these Web-font end "app" gimmicks.
14
45
u/gg_dweeb Feb 06 '23
Try using Remedy instead.
$NOW is a shit product but that's usually because organizations are complete idiots and instead of fixing process they fuck up the tool to make it work with their shitty approach to management.
I've been a consultant doing ServiceNow implementations for 5+ years now, 90% of all the problems with the platform originate from IT departments that are filled with incompetent idiots that can't do their jobs worth shit.
25
u/Wonko-D-Sane Feb 06 '23
It was Remedy, Service Now, Team Track, and Atlassian Jira... We eventually crammed Jira full of custom fields and retired Remedy and Team Track... Service Now remains simply because no one uses IT's services, so no one complained about it enough... its all the same BS "Take a number, and someone will never get back to you"
I am not kidding when I say we license every godforsaken tool out there... the amount of my day spent filling out forms that no one reads is just ridiculous. The worst is filling out forms about modifying the forms.
13
u/RedOctobrrr Feb 06 '23
The worst is filling out forms about modifying the forms.
Well, that's what change management is about. On the flip side you got people just changing shit because it makes sense at the time, and a couple years later an almost entirely new team due to turnover, and they're scratching their heads like what the actual fuck made someone want to change this?
Change management.
I get that you're inundated with forms but that's called overhead. Making the change is a 15min process and documenting the change another 15min, ideally it's just that original 15min to make the change but that's not how you're supposed to do things. Document document document. That process is not meant for YOU PERSONALLY to benefit, so it makes sense that you wouldn't want to do it.
9
u/gg_dweeb Feb 06 '23
yeah change management crazy important for a number of reasons, if for no other reason than regulatory compliance.
Nevermind being able to track down why a critical network is suddenly degraded and no one on the support side of the house knows that a small engineering team pushed a "inconsequential update" that is having large effects than expected.
3
u/RedOctobrrr Feb 06 '23
Exactly.
I've seen some really wonky shit that the only answer I can get about it was "Idk, Jordan wrote that SQL and they left the company in 2014 sooo idk?"
And as you pointed out, compliance. When you have SLAs to meet, or are looking to become ISO compliant, or <insert one of a dozen other reasons> then you need to show that changes are being tracked, hell even how changes are requested and who approves them. One of the fields to jot down some notes should always be the potential impact followed by the post-change testing methods and testing results.
1
u/Wonko-D-Sane Feb 08 '23
Shoulda kept the meeting minutes/transcript so Jordan's thoughts on the process when whoever met with him and gave him the task can be found by an NLP like ChatGPT.....
Still bullish on MSFT... between GitHub, Co-pilot, CodeQL, Teams AI transcripts, investment in chat GPT... they know more about what Jordan is up to than his manager.
1
u/Wonko-D-Sane Feb 08 '23
yeah change management crazy important for a number of reasons, if for no other reason than regulatory compliance.
Great, then action the form I filled out... whats the point of having every workflow management tool out there only to call me into a meeting where I have to talk to you about why i populated the few dozen fields the way I did. If the form doesn't make sense to you, lets just use the inevitable meeting minutes as the change commit message, and the calendar invite as the event log....
My point is that its useless if you don't action it solely on the data in the record. Shitty audit path means I have all sorts of back doors into critical infrastructure....
Signed, yours truly, the QA department...
0
u/gg_dweeb Feb 08 '23
sounds like you work for an extremely shitty company top to bottom. That being said, "Its tedious and ineffective" isn't a valid excuse not following SOX compliance protocols
1
u/gg_dweeb Feb 06 '23
I am not kidding when I say we license every godforsaken tool out there
Oh I believe you 100%. I routinely have to build integrations into other tools "because we already have it but its not implemented yet". You'd be how common that actually its. It's the main reason I'm not worrying about SN's stock...just wish I could build a decent competitor to them lol
2
u/Wonko-D-Sane Feb 06 '23
just wish I could build a decent competitor to them lol
Excel with JDBC/ODBC into the transnational back-ends seems to be working quite fine for most people I work with.
Im bullish on MSFT because people are lazy
2
u/gg_dweeb Feb 06 '23
That would most likely work well for team based tracking, but I have a hard time believing that it'd scale well to enterprise level covering 10,000's of users with varying levels of access management needed
2
u/Wonko-D-Sane Feb 06 '23 edited Feb 06 '23
You aren't wrong... every team is an island... typically it is due to most teams avoiding the corporate IT, the amount of fragmentation is crazy.
Teams are paying OPEX for their own Azure cloud services, just to avoid filing tickets with IT in service now... so still bullish on MSFT
1
u/MadManMorbo Feb 06 '23
To be fair, most of them don't specialize in navigating ticketing platforms... they specialize in working on tech gear.
1
u/gg_dweeb Feb 07 '23
To be fair, they don't need to specialize in that. The "tech gear" guys generally need to interact with 3 or 4 types of data and maintain records of what they've worked on and the changes they've made, and usually the fields they need to fill out are just a handful of data points.
2
u/greyfox199 Feb 06 '23
it really is a good itil tool, albeit expensive. there are other players in the game, but they dont seem as polished.
3
u/Snowsled Feb 06 '23
ServiceNow has a decent backend workflow system and then a front end portal customers can customise. Most IT depts do a shit job on the portal, and then have a bunch of crappy data in the back making it overall not great. But that’s not always the fault of the product.
3
u/Good_Behavior636 Feb 06 '23
ours too. we use it for everything. it's a black hole that things go into and never come out
2
u/GeorgiaPineFatwood Feb 06 '23
The last 3 fortune 500 companies I've worked for have all used it. I fucking hate it.
3
u/WorldsBestPapa Feb 06 '23
ServiceNow is a fantastic tool when implemented correctly. Emphasis on implemented correctly .
1
u/Special_Maximum9633 Feb 07 '23
I used a version that wasn’t implemented correctly. Now when I meet with potential employers is ask what tools they use for CRM.
1
u/WorldsBestPapa Feb 07 '23
I’ve used remedy before and thought it was godawful. I’ve also talked to other people who used remedy in the IT space and didn’t have much good to say.
Service now definitely seems to be the standard nowadays and for good reason.
It is news to me that service desk and remedy have several other competitors. I figured they had the market pretty much locked down between the two.
1
u/danisflying527 Feb 07 '23
I use a version that is implemented very well (daily) and am quite happy with it
3
u/shark1818 Feb 06 '23
We use it too, and it’s shockingly horrible. Can’t believe this is a publicly traded company lol.
-2
1
u/Asleep-Syllabub1316 Feb 06 '23
Such a true story for every other Corporate IT team in the tech space. They like to spend money on useless things and somehow manage to convince leadership to do so.
20
u/wsbgodly123 Feb 06 '23
So puts?
28
u/TheNewEthlite Feb 06 '23
PUT premium spiking, shorting is cheap at the moment
10
u/disco-inferno_ Feb 06 '23
what's the difference between buying puts and shorting?
45
u/GalaxyFiveOhOh Feb 06 '23
A put is an option to sell a stock. Doesn't mean you ever really have to buy it. If it plummets you profit, if price goes up your options expire worthless, assuming you hold. You only lose what you invest.
Short a stock, you're borrowing a share, paying interest on the share, selling the share, and hoping the price plummets. You owe that share you borrowed, and your plan is to buy it back cheaper when you have to give it back. Huge risk if the stock price explodes, because you're obligated to buy it back at any price. You can lose much more than you invested.
-13
Feb 06 '23
[removed] — view removed comment
7
u/TheRealSecondChance Feb 07 '23
Not true, you'd owe them money if you lost say $120.
2
u/hardcore_softie jerks off to pics of cathy woods Feb 07 '23
Come on man, that guy would probably have produced some amazing loss porn but you just had to go and edumucate him.
2
2
u/Laroxide Feb 06 '23
In options you pay some short of premium. You don't pay premium with shorting, only fees.
3
u/AssociationDouble267 likes liquor, ladies, and leverage Feb 06 '23
But if you’re wrong, the worst that’ll happen with puts is you’ll lose the premium you paid. A short gone disastrously wrong will be catastrophic for your finances.
1
u/129boopered Feb 06 '23
As if that matters, and anyway you seem to know about enough. What moves us is the loss porn fellow regard
1
u/SheepherderSea2775 Feb 07 '23
During events like these intrinsic value (IV) will spike, meaning the option price sky rockets past its normal value. Once the “hype” ends, IV will lower and so will the option. You’ll get IV crushed just by FOMO’ing on news.
2
u/PortfolioIsAshes I might be bad at computer, but I'm also bad at stock Feb 06 '23
Their earnings are out and they already sold, it's going to just trade sideways slowly until next big event so you either short it as OP suggested or buy the furthest leaps once volume and OI falls.
15
u/RemiMartin Feb 06 '23
Wasn't he on CNBC a week or two ago saying how well they were doing?
9
u/gg_dweeb Feb 06 '23
He's the former CEO of SAP and has only been there for a few years, don't think he has any real attachment to the company at all.
30
u/TheNewEthlite Feb 06 '23
Yep, a pump and dump as soon as he was eligible(24 hours after earnings report) to sell shares
13
u/ErectoPeentrounus calling a market crash and unemployment office Feb 06 '23
NVDA insiders sweating rn
4
u/ElectronicImage9 Feb 06 '23
Nvidia will have such shit earnings. If I wasn't so regarded and knew how to short I'd bet my life savings
They took away china from them and nobody's buying those shit GPUs now. Rip.
2
u/ErectoPeentrounus calling a market crash and unemployment office Feb 06 '23
Yea even shitco mining declined. It can push more up though so I’m hoping it’s parabolic green into ER for a risk free short
8
u/Swiftnice Feb 06 '23
You know that CEO's and board members usually pre-plan their stock transactions and announce them ahead of time to avoid any accusations of insider trading.
15
u/TheNewEthlite Feb 06 '23
10b5-1 was not mentioned in the 93% share sale filing friday. He is eligable to make these discretionary trades in the trading window.
2
2
u/venti_cocaine_latte looking for 🏳️🌈🐻 butt pirate.. DM 🅿️🅿️ size Feb 07 '23
Op, you do know that Service Now is integrated with every bank and most prominent brokerages right? Good luck holding onto your sharts…yes I said it
2
u/CharredAndurilDetctr Feb 06 '23
Not to give a CEO the benefit of the doubt but: since he recently became eligible, it could be that he's just very undiversified and was way overdue for a rebalancing.
3
u/rocketseeker Feb 07 '23
That still means he would have sold just as much before if he ever could
Still alarming
4
u/Granter Feb 06 '23
former govt. employee working in contracts.
ServiceNow is a hell of a tool that we bought quite a bit of even though there were other options out there, we bought because we knew they wouldn't go tits up.
They have the fan base, they'll just implement AI into the equation. Yeah insider selling but they grew exponentially over the pandemic because non compete emergency contracts being issued. I imagine they figured the pandemic is winding down, looming recession etc.
2
u/vtech3232323 Feb 07 '23
Also, they probably made the most money in setups. Now, they make less from consulting and implementation as companies hire their own in house to manage the system.
2
Feb 06 '23
[deleted]
12
u/Acceptable-Matter512 Feb 06 '23
you do not know the difference between shorting and buying puts - yet u confidently make statements like "too many puts will cause MM to drive prices up"
-1
Feb 06 '23
[deleted]
6
u/Acceptable-Matter512 Feb 06 '23 edited Feb 07 '23
stop calling me a loser and put ur money where ur mouth is. if u srsly think NOW wont drop - then sell some puts and prove me wrong.
edit: dis guy deleted his comments lol - just cuz y not here wat he said
1
2
u/jloy88 Feb 06 '23
Jesus christ they are a 100B company.. how have I never even heard of them. Puts it is.
3
u/bogdanelcs Feb 07 '23
Do you know why they have that valuation? Because unlike other growth companies, this one actually makes money while growing: https://i.imgur.com/Vy9qQue.png
0
u/Ok-Language3146 Feb 06 '23
Wait, so there’re saying his compensation is pure stock dilution, and he’ll quickly have more shares to sell in the next 12 months?! Not sure how that’s a good thing for investors lol
2
1
1
u/ScamperAndPlay Feb 06 '23
I am eyeing the $700c, Jan 2025… but you do you.
CEO is rotating out, board change. Analysts give it a buy rating across the board almost. I still think I can get in around $32, so I do hope for some dippage!
-1
u/TheNewEthlite Feb 06 '23
Company has potential, but I think they need to wipe the board out, they seem stagnant and self-serving. Either way this is a short term trade.
1
1
1
•
u/VisualMod Turing Test Proctor Feb 06 '23
Discord BanBets VoteBot FAQ Leaderboard - Keep_VM_Alive
Hey /u/TheNewEthlite, positions or ban. Reply to this with a screenshot of your entry/exit.