My thoughts on Convert

[lightseedvc]

This is a bullish development. Lots of other high growth software companies have done converts in the last few months and after 1 day of pain their stocks all rallied materially to make new highs (WDAY, CNQR, CSOD, etc) NQ should follow the same script. Moreover, from a catalyst perspective, I'm expecting: 1) New product annoucements 2) New sell-side coverage now very likely with MS and DB. Once those firms launch, any "crediblity" issues that NQ has suffered from will be eliminated and the stock will move closer to its peer comps which would put the stock in the low 30's at a minimum. 3) New 13F filings showing new large institutional ownership, this will further improve crediblity 4) Earnings call in early Nov, will highlight continued strength in all business lines 5) Analyst Day in Nov -this will be a very well attended event which will have people leaving the day all bulled up as NQ is at the center of some of the biggest growth trends out there 6)  Rising earnings estimates. Its becoming clear that 2014 estimates are too low. I would expect revenue estimates to rise following the Analyst Day. 

[admin]

yes, lightseedvc, there is plenty of gas left in the tank. Price has suffered a little from this and the general market, but longer term, these blips are likely to provide good opportunities to add.

[tradestar2012]

Im still bothered by the large cash hoard on the BS. The company has shown a preference for using stock as acquisition currency in the past and has not even touched the cash from the IPO. Why raise another $150-172.5M? Also, sell side coverage is not assured. MS and DB may be leading this offering, but that does not mean their research departments will cover it. At $1bn in market cap, the company is still a bit too small for bulge bracket interest.

[admin]

One explanation would be that they're planning to do a lot of smaller takeovers.

["bulge bracket interest"] .. I like that one