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1. The Trade Desk (TTD) -- Snapchat & Google

a) Snapchat

Snapchat announced that it'd miss the low end of its next quarter guidance that was set just a few weeks ago. This sent the entire advertising-technology space into a tail spin. I added to my stake in The Trade Desk during the week. The following reasons gave me the confidence to do so:

1. The Trade Desk’s channel diversification is a wonderful tool to use when a certain piece of the market dries up. Video specifically will get a large boost this year from the 3 largest streamers all deciding to embrace ads more enthusiastically.
   1. All 3 will work with The Trade Desk and supply remains wildly constrained within that specific category.
   2. Not only is Snapchat a tiny piece of The Trade Desk’s impressions, these impressions can be re-directed to other pieces of the market like CTV when need be.
2. The Trade Desk religiously under promises and over delivers each and every single quarter. It has demonstrated surgeon-like precision in its forecasting abilities over the last several years and throughout macroeconomic tailwinds/headwinds.
   1. It’s a beat and raise and then beat and raise again machine.
3. The Trade Desk has taken market share amid every single macroeconomic downturn in its existence. Marketing executives must fixate even more on Return on Ad Spend (ROAS) when their budgets shrink. The Trade Desk is what they turn to, to do so.
   1. This is why the company’s structural tailwinds were strong enough to combat every material headwind that its competition blamed this last quarter, and its’s why…

The Trade Desk released an 8-K on Thursday reiterating its guidance offered on the last call. One social media stock mis-stepping in their own forecasting should not have been perceived as a red flag for The Trade Desk, and this filing merely reaffirms that sentiment. A special thank you to the company’s leadership team for deciding to publish this. Much appreciated.

I also added to my other two advertising-related names: Meta Platforms and Match Group (which has seen quite strong app ranking data in recent weeks) as well.

b) Google

For once, there’s broad bi-partisan support on a political issue. Left and right-winged lawmakers are both supporting a bill to ban companies doing more than $20 billion per year in digital advertising revenue from acting as both the supply side and the demand side. If passed, this would effectively break-up Google’s end-to-end advertising platform. Industry experts think this would work wonders in enhancing competition and data sharing. A more level playing field would be objectively good news for The Trade Desk, although it has performed admirably with the scale heavily tipped in Google’s favor over the last several years.

2. CrowdStrike (CRWD) -- More Data

a) Threat Management Research Report

Quadrant Knowledge Solutions’ Threat Intelligence Management report scored CrowdStrike’s Falcon X product higher than any of its competitors in the space after extensive vendor evaluation. Considerations include things like roadmap, integration/interoperability, scalability, sophistication of technology and much more.

The judging analysts praised CrowdStrike’s ability to “remove resource intensive complexity of incident investigation” thanks to its threat hunting and remediation teams. This piece of CrowdStrike’s business (involving human contact and remediation) is its lowest margin revenue chunk, but it does provide a great lead generation opportunity for the company as I've frequently shared in the past. It generates roughly $5 in new, higher margin business from $1 spent on this piece of the organization.

“With its comprehensive capabilities, integrated partnerships, robust value proposition and compelling customer references, CrowdStrike is well-positioned to maintain and grow share in this market.” — per the report

b) Case Studies

Navitas (Global Digital Education Firm):

The on-boarding process and removal of the legacy anti-virus solution took a couple of days, with no downtime.

“During a security review it soon became evident that endpoint detection and response (EDR) was necessary and CrowdStrike was the partner with the most effective solution... It was the right solution 3 years ago, it’s the right solution today and I believe it will be the right solution in another 3 years.” — Navitas Global Head of Information Security Gavin Ryan

Greenhill (Investment Banking Firm):

1. CrowdStrike fostered a 75% reduction in alerts
2. Greenhill enjoyed net cost savings of $300,000 annually with material time savings as well. This is important as it shows CrowdStrike's agent consolidation in action and justifies the higher per-endpoint cost that CrowdStrike charges vs. most of its competition.
3. The product was “incredibly easy to implement with deployment taking under an hour” per Greenhill’s Chief Information Officer

c) Zscaler

Zscaler reported results this past week that were quite positive. Why do I care? CrowdStrike and Zscaler are close partners and frequently include each other in large enterprise contracts to combine endpoint/workload and network capabilities. While strong Zscaler results far from perfectly correlate to CrowdStrike’s, it is a decent, positive hint for the firm’s upcoming earnings report. We’ll see how CrowdStrike does.

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3. SoFi Technologies (SOFI) -- CEO Buying, OnDeck, Macro Insulation and Nelnet

a) CEO Buying

CEO Anthony Noto continues to buy more SoFi shares in the open market. This week, he added another $250,000 in common equity. Over the last 10 months, his stake has grown by about 50%. I understand that Anthony Noto is a wealthy man -- specifically, he’s worth about $140 million -- but investing north of $10 million or 7% of his total net worth into the company since last August is still quite significant to me.

b) OnDeck

OnDeck -- the largest online small business lender in the USA owned by Enova -- is partnering with both LendingTree (LT) and SoFi to augment access to small business loans. The partnership will leverage the intuitive interfaces and financial service offerings of LT and SoFi while infusing OnDeck’s AI/ML prowess into the underwriting process to enhance access to working capital. Many, many lending companies claim to have AI/ML algorithms that enhance credit decisioning -- some are right and some are wrong. Regardless, gaining access to a relevant, new dataset always uplifts underwriting quality and this does just that.

P.S -- This sounds like it will directly compete with Upstart’s planned small business product launch coming this year.

c) Macro Insulation

Much concern has been raised about (especially newer) lenders struggling to weather the storm that worsening macro will bring throughout 2022. I see SoFi as relatively insulated from these pressures for the following reasons:

1.  Its banking charter paves the way to a lower cost of capital which helps offset the higher costs brought on by rising rates. More expensive cost of capital will also push more lenders to seek out other savings initiatives. SoFi bundling its Galileo and Technisys offerings with bank sponsor services does just that.
2. SoFi’s one-stop suite of products has offerings that do well in all environments. For example, its variable-to-fixed refinancing products thrive in rising rate environments along with personal loans for home improvement projects as mortgages for new homes become more expensive.
3. SoFi’s credit products cater to a very affluent crowd which should be more resistant to macro pressures than less affluent constituencies.

d) Student Loans