Rob Vinall on the investment in WIX

TL;DR

Wix has decided to stop providing guidance due to the uncertainty caused by the COVID-19 pandemic, and the increase in its stock price may affect its ability to attract and retain talent.

Transcript

yeah and the second question is about weeks what do you think about the mention well that they they mentioned that they will stop giving guidance which come to some weeks a week that they say they would that will stop giving guidance because they are thinking the the moment at the moment it's very difficult for them to see the evolution or how is i... Read More

Key Insights

• ✋ Wix has decided to stop providing guidance to investors due to the difficulty in predicting future trends and the negative impact of COVID-19.
• 🥺 The decision to stop giving guidance is influenced by the belief that it can lead to fraudulent behavior and trouble, as seen in the case of GE.
• 🧑‍💻 Stock-based compensation is necessary for attracting and motivating talent in tech companies, despite the preference of long-term investors to avoid dilution.
• 🧑‍💻 As tech companies mature, stock-based compensation expenses tend to normalize.
• 🧑‍💻 The decline in Wix's share price is not unique to them but has affected the entire tech sector.
• ❓ The decline in the share price may impact employee motivation, but it is happening to Wix's competitors as well.
• 😚 Over 40% of companies listed on the NASDAQ have lost over 50% of their market value from their highs this year.

Questions & Answers

Q: Why did Wix decide to stop providing guidance to investors?

Wix decided to stop providing guidance because it believes that many companies get into trouble by providing it, as seen in the case of GE. The uncertainty caused by COVID-19 also makes it difficult for Wix to predict future trends accurately.

Q: How does the increase in Wix's stock price affect attracting and retaining talent?

Despite the preference of long-term investors to avoid dilution, stock-based compensation is crucial for attracting and motivating talent in the tech industry. The potential upside and additional benefits of participating in the company's success are major motivating factors for young talented individuals.

Q: How does stock-based compensation expense change as a company matures?

As a company matures, stock-based compensation expenses tend to normalize. This has been observed in the first and second generation tech companies like Google. Over time, the concern about dilution and stock-based compensation dilution tends to decrease.

Q: How does the decline in Wix's share price impact employee motivation?

The decline in Wix's share price is not unique to them but has affected the entire tech sector. While the decline may impact employee motivation, it is important to note that this is happening to Wix's competitors as well, which helps mitigate its specific impact on employee motivation.

Summary & Key Takeaways

• Wix, a subscription-based company, has decided to stop giving guidance to investors due to the difficulty in predicting future trends and the impact of COVID-19 on their business.

• The decision to stop providing guidance is influenced by the company's belief that many companies get into trouble by providing it, as seen in the case of GE.

• Stock-based compensation is essential for attracting and motivating talent in tech companies, although long-term investors may prefer companies to repurchase shares to avoid dilution.