I added another name to my small short basket of overhyped cloud stocks yesterday. Citron Research released a pretty convincing report that basically argues that Textura (TXTR) isn’t a whole lot more than a big pump-and-dump (not their exact words). The company is already expensive on most metrics, but what’s even more troubling are the background of the CEO and the people who managed the IPO. I suggest you read the Citron piece if you want to know the details, because I don’t have a whole lot to add to their research.
Two small tidbits worth mentioning:
- As a cloud/technology company one of the biggest assets of Textura should be their employees. Despite this they have a mediocre score on glassdoor.com (small sample).
- Like most recent IPO’s there are tons of options/RSU’s/warrants outstanding. The fully diluted share count is more than 20% higher than the number of ordinary shares outstanding. Citron doesn’t include this when looking at the fundamentals.