Read on Twitter
“5 reasons why I’m really excited about this $FSLY acquisition”
Earlier today @Fastly announced they are acquiring @SignalSciences for $775 million.
In full disclosure $FSLY was already my biggest position at 35% and on this news I added to it pre-market so now I’m at 38%.
Earlier today @Fastly announced they are acquiring @SignalSciences for $775 million.
In full disclosure $FSLY was already my biggest position at 35% and on this news I added to it pre-market so now I’m at 38%.
If you’d like to read more about the deal:
Company announcement:
https://www.fastly.com/press/press-releases/fastly-announces-agreement-acquire-signal-sciences
Message from the $FSLY CEO:
https://www.fastly.com/blog/fastly-intent-to-acquire-signal-sciences
Company announcement:
https://www.fastly.com/press/press-releases/fastly-announces-agreement-acquire-signal-sciences
Message from the $FSLY CEO:
https://www.fastly.com/blog/fastly-intent-to-acquire-signal-sciences
Here are 5 reasons why I love this deal:
1) Signal Sciences gives $FSLY a stronger security offering which makes the launch of Secure@Edge and Compute@Edge even more compelling for enterprise customers.
1) Signal Sciences gives $FSLY a stronger security offering which makes the launch of Secure@Edge and Compute@Edge even more compelling for enterprise customers.
2) $FSLY bought Signal Sciences for $775M which works out to 28x current revenues which is actually slightly below $FSLY’s current P/S multiple so this deal is not dilutive.
3) Signal Sciences has 85% gross margins compared to $FSLY’s current 61% gross margins which goes to show that expanding their security products and solutions will improve overall margins and accelerate the path to profitability.
4) For a young company Signal Sciences has an impressive list of 60 enterprise customers with minimal overlap to $FSLY’s current 310+ enterprise customers. This is a huge opportunity to broaden and deepen these relationships.
You can see the list here: https://www.signalsciences.com/customers/
You can see the list here: https://www.signalsciences.com/customers/
5) Signal Sciences was backed by some of the best VC firms on the planet including @CRV @IndexVentures and @OATV.
I believe @OATV was also an early investor in @Fastly so they hit a homerun with both companies
I believe @OATV was also an early investor in @Fastly so they hit a homerun with both companies
The acquisition of @signalsciences plus the news today that TikTok is likely to be acquired by $MSFT in the next few days for $20-30 billion means I remain extremely bullish on $FSLY.
Without this deal I thought $FSLY would do $300M+ this year and $465M+ next year. Clearly those numbers are going up now but you’ll have to account for more shares outstanding.
The deal was $200M cash and $575M in stock. If the $FSLY stock price used in the deal was around $88 then it means $FSLY will need to issue another 6.5 million shares.
With the revenue being added in this deal + the launch of Secure@Edge and Compute@Edge + new enterprise customers they’ll attract + improving margins I believe $FSLY gets to $530M in 2021 with 72% gross margins which means $FSLY should be trading at $145 in the next 6 months.
Now there’s breaking news that $WMT will be joining $MSFT in the bid for TikTokUS — imagine if this deal opened the door for $WMT to move over to Azure and bring in $FSLY as the CDN for http://Walmart.com 
