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So my guess is the $100M is going to go towards expanding their data centers in some way. We might see new regions from DO in the coming years or additional server types/services that run on top of those new servers.
Earlier quoted context omitted.
Am I correct in thinking this is an EBITA situation? You can be making money and paying it all to Uncle Sam and your bank loans. 100 million is gonna be a lot of interest payments.
> EBITA Have you both typo'd 'EBITDA' the same way, or is `EBITDA - Depreciation` a measure used too? (I searched, couldn't find anything.)
What is their current valuation? I wondered if google or microsoft would buy them, amazon can't due to anti-trust issues, but the others might be able to.
I don’t see why they would except maybe to aquihire some talent.
They seem to have some regions running at near capacity already.
What is their current valuation? I wondered if google or microsoft would buy them, amazon can't due to anti-trust issues, but the others might be able to.
This article had more detail and substance than I usually find on TechCrunch or startup coverage in general. I do want to point out two things that bothered me in the article: 1. Using the word “raise” when talking about financing via debt seems inappropriate and very start-upy. This is a low cost of capital line of credit, is it not (due to their infrastructure and broad customer base)? 2. Why in the world are state…
That's because Alex Wilhelm wrote it. He was previously the editor for Crunchbase (just joined in the last few months). I've known him for years, he does great reporting that makes me incredibly envious. TC is lucky to have gotten him, he deserves Financial Times-quality media exposure.
To raise a material amount of debt, lenders generally require there to be collateralized physical assets against that debt. Compare that to equity financing which firms can use on literally anything (eg. marketing spend, hiring, etc). So my guess is the $100M is going to go towards expanding their data centers in some way. We might see new regions from DO in the coming years or additional server types/services that r…
DO likely collateralized their existing infrastructure to get the $100 mil line of credit/debt, but will spend the $100 mil on other things in addition to some infrastructure (as the article suggested)
Earlier quoted context omitted.
Would likely be a private equity leveraged buy out transaction, someone who leans out the operation and squeezes the margins up. Anyone with tech chops has their own cloud, and DO isn’t even cash flow positive yet. Thoughts and prayers to anyone with common stock (which isn’t looking too good at an exit).
Can you expound on thoughts and prayers comment? wouldn't debt help equity holders? Or you think any value created by debt is going to be less than the cost of the debt?
let's say you have a mortgage on your house and your equity in it is roughly 10% of the house. now imagine you take a second mortgage/HELOC to invest-renovate the house, buy new furniture, build a pool, etc. - in good case your equity will be 10% of the higher price of the house due to renovations, so your equity will increase in dollars. But what if you will never find a buyer? and the house price will stay the same, if not lower. then your equity in your house will be wiped out and the mortgage will become underwater.
Earlier quoted context omitted.
Would likely be a private equity leveraged buy out transaction, someone who leans out the operation and squeezes the margins up. Anyone with tech chops has their own cloud, and DO isn’t even cash flow positive yet. Thoughts and prayers to anyone with common stock (which isn’t looking too good at an exit).
Can you expound on thoughts and prayers comment? wouldn't debt help equity holders? Or you think any value created by debt is going to be less than the cost of the debt?
Earlier quoted context omitted.
Would likely be a private equity leveraged buy out transaction, someone who leans out the operation and squeezes the margins up. Anyone with tech chops has their own cloud, and DO isn’t even cash flow positive yet. Thoughts and prayers to anyone with common stock (which isn’t looking too good at an exit).
Can you expound on thoughts and prayers comment? wouldn't debt help equity holders? Or you think any value created by debt is going to be less than the cost of the debt?