I think we've been lied to for years in regards to our true revenue, so what now appears as a slow decay is actually quite worse. There is a reason why the Broadcom deal failed, because the potential buyer smelled the BS when they started looking at the numbers.
This, I believe, is the only logical explanation for how things have been playing out. I could be wrong, but give me another explanation that makes sense, please, and I'll reconsider.
No company is legally required to follow the policies of another.
If a company or PE firm were to buy out SAS and lay off the employees, is the new management bound by the original SAS severance policy and pay the outgoing employees, a certain months of salary based on their tenure?
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Any idea how much of SAS's revenue is based on renewals?
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90+ percent
The real estate is held by a separate entity and not SAS. The land and buildings would have to be included in the deal. My guess is JG wants $12-to-15B the company alone, not including the buildings. Yes, a private equity firm could acquire SAS, layoff 70% of the workforce and ride the cash wave for several years. That kind of cutthroat financial engineering could occur. Hopefully not.
Don't underestimate SAS's value is in it's customer base and renewals. A buyer could purchase SAS, layoff most the staff, sell all the buildings and real estate (not insignificant,) and ride the revenue stream down over several years. Any idea how much of SAS's revenue is based on renewals?
this BS term ipo readiness is a made up thing. they know the books internally are a mess. wondering if broadcom got a sense of that and and ran away. the company has hired a lot of new employees in finance and accounting since all this bs about ipo started. "ipo readiness" = keeping normal logical financial accounts like other companies do. it's the bare minimum necessary for a successful buyout.
as a private company sas can cook the books any way they want and they're not required to disclose profit or revenue etc to anyone. just because they report or release figures doesn't mean the figures are true.
"I would be as concerned about reading the code as reading the books. The future of the latter depends very much on the former."
Here's what's in in the code, and in the books (ledgers) - Curiosity.
"Curiosity is in our code!" as they said a handful of years back. They even printed a cute little book about it. Yeah, curiosity is in your books, too, as we're curious how those ledgers read.
"I would be as concerned about reading the code as reading the books. The future of the latter depends very much on the former."
It's almost as if this turned into a thread about Twitter.....
Is Sall's effort to exit and retire with a windfall (if that's what he wanted) thwarted by Goodnight's control of the company?
My theory is that the Broadcom talks were real. JHG is grumpy and not tolerant of nonsense. He asked Broadcom to keep the buy out talks quiet. Wakes up to find a story about the buy out talks in the newspaper. The "I'm done" switch is flipped and end of story.
This theory is as good as my Cubs theory, "They could win the world series"
It's pretty clear the IPO-readiness drive was a direct response to the Broadcom acquisition falling through:
"How do we keep everyone from immediately heading to the exits after flirting with a company that would have probably fired 20% or more of the employees had they bought SAS?"
"Pretend like we are going to IPO and they might get equity if they stay?"
I do wonder how serious the discussions were. If JHG spent 5 minutes googling Broadcom, he would know they'd completely gut SAS. So it can't be that he realized that at the last second. Did he want $20B and Broadcom only offered $15B and that's why we see that range constantly quoted in the media? That's a pretty big range, so I assume negotiations were still in the early stages.
So maybe he was just flirting as was posted earlier. But then that flirt got him stuck going through the motions of an IPO that will never happen. Weird stuff.
How about a teaser or a trailer? Did the tryst result in a new addition to the rock collection?
Episode two: search and discovery for security tape capturing a tryst in the R&D library ~20 years ago.
SAS will not be sold in the lifetime of JHG. Any talks with Broadcom were simply corporate flirting.
"Hi potential suitor! Am I still pretty? (JHG smiling, batting eyes)"
"Oh, you think so? (JHG blushing)"
"Well bless your heart! I'm so flattered! Sorry, but I'm already engaged! (JHG faux-sad face)"
Thanks for dinner and the night out, though, Broadcom! (JHG goes inside, no kiss at the door)"
(Deal falls flat. Broadcom stands on doorstep feeling taken and bewildered as to what just happened.)
A scene from the new show: SAS, Corporate Rom-Com.
"Of course, SAS will put the most positive spin on its numbers. Every corporation does that. But there's no reason to believe they're lying, because the published numbers explain everything we've seen."
I'd argue that spin = misleading statistics, lies by omission, or lies by structure. Which are unfortunately very common ways to mislead people. Spin equals lying.
I initially saw the advance notice of “IPO-readiness” as a means to placate employees who wanted an ownership stake in the company. Now, who knows?
Does anyone really believe SAS is worth? $10B today? Remember the buildings are not included.
In 2013 SAS reported revenues of $3.02B. In 2023, SAS reported revenues of "over $3B" (https://en.wikipedia.org/wiki/SAS_Institute, https://www.sas.com/content/dam/SAS/documents/corporate-collateral/annual-report/company-overview-annual-report.pdf).
$3B in 2023 is worth almost $4B in 2013 dollars. So, adjusted for inflation, SAS claims that its revenues declined almost 25% over 10 years (https://www.bls.gov/data/inflation_calculator.htm).
Suppose that in 2013 SAS made a 10% profit. With an average 2.5% annual decline in revenues, by 2018, that profit could have dropped to zero. So it's quite believable that SAS now requires buyouts and layoffs to maintain profitability. Since 2018, that's exactly what we've seen.
The majority owner has consistently said that SAS is worth $15-20B. Even judging from published numbers, Broadcom may have reasonably concluded that SAS is worth no more than $10B. That's one possible reason the deal fell through.
Of course, SAS will put the most positive spin on its numbers. Every corporation does that. But there's no reason to believe they're lying, because the published numbers explain everything we've seen.
I would be as concerned about reading the code as reading the books. The future of the latter depends very much on the former.
SAS is a privately held company. The owners can claim any revenue numbers they want and you have to believe it. SAS is not bound by SEC rules like a public held company.
OTOH, if SAS is going public or if a private equity firm wants to buy it, they have to open the books to the auditors and they will find the true numbers.
I'd love to be wrong about making that statement.
Who announces an IPO 30 months prior to doing it? Doesn't it look more like an advertisement that "we are for sale"?
It was an interesting development for sure. It was leaked to the paper, is how it felt, and then SAS came out as "not for sale". This was followed by the IPO readiness campaign.