I modeled out some scenarios, and it's clear that this is going to be an uphill battle for Schuck. The path to $2.50 per share of FCF is challenging but doable, however the multiple expansion is really out of his control. The ideal scenario for him is the market continues to penalize GTM for the next two years while they aggressively buy back one third of the float. Then revenue acceleration probably has to happen in a world where AI is eating the business at the margins. Then they've got a big senior note refi that has to happen late 2027 / early 2028.
Schuck sold ~$1.1B worth of stock from IPO through 2023, so I'm not sure this option package is really that critical for him in the end. But he's smart & competitive so this will be fun to watch play out.
Excellent post, thanks Mojo. Unfortunately I think people recognise material terminal value risk, such that even if FCF/sh is optimised over next 1-2 years, the market won't likely won't rerate ZIs equity.
More fiction content please. Very good way to get the story across.
Really enjoyed this ! Happy Holidays
Fantastic piece
I modeled out some scenarios, and it's clear that this is going to be an uphill battle for Schuck. The path to $2.50 per share of FCF is challenging but doable, however the multiple expansion is really out of his control. The ideal scenario for him is the market continues to penalize GTM for the next two years while they aggressively buy back one third of the float. Then revenue acceleration probably has to happen in a world where AI is eating the business at the margins. Then they've got a big senior note refi that has to happen late 2027 / early 2028.
Schuck sold ~$1.1B worth of stock from IPO through 2023, so I'm not sure this option package is really that critical for him in the end. But he's smart & competitive so this will be fun to watch play out.
Excellent post, thanks Mojo. Unfortunately I think people recognise material terminal value risk, such that even if FCF/sh is optimised over next 1-2 years, the market won't likely won't rerate ZIs equity.