Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Nearly 30 years of experience in the Korean/Asian equity research. Major sectors coverage include the following:
- Technology 
- Consumer 
- Special Situations/Deep Value Plays
- Tender Offers/M&As
- Holdcos/Stubs
- Asian Unicorns/Private Companies

Korea/Asia, Events, IPOs

Elastic: Why Is It Outperforming In Recent Tech Carnage?

Duzonbizon: Capitalizing on the Growth of Cloud Based CRM Software in Korea

Equity Capital Markets

<ul>
<li>People love a great underdog story. Whether it be Paul Potts in Britain's Got Talent TV show, Rocky Balboa vs. Apollo Creed (in the Rocky movies), or Elastic vs. Google, many people around the world root for the underdogs. In the case of Elastic, it had a sizzling IPO debut last week. On the first day of trading, Elastic share price jumped out in the open and closed at $70, representing 94% higher than the IPO price.</li>
<li>At the current price of $70, Elastic has a market cap of US$4.9 billion. <a href="https://www.smartkarma.com/entities/11369" target="_blank" data-smartkarma-citation="entities:11369:1">Alphabet Inc Cl C (GOOG US)</a> has a market cap of US$809.4 billion, so Elastic's market cap is only 0.6% to that of Alphabet. If Elastic can capture only 1% market cap of Alphabet, that would represent a market cap of US$8.1 billion, which would be 65% higher than current levels. </li>
<li>All in all, Elastic has become one of the best performing tech IPOs this year. Elastic is viewed as a major underdog to Google. It remains to be seen what the tipping point will be that could force Google to shift its strategy to re-focus its efforts in capturing the enterprise search market. Meanwhile, we believe that Elastic has an excellent "window of opportunity" to capitalize on its successful IPO to make solid tuck-in acquisitions and further improve its enterprise search services. Thus, we remain positive on Elastic. </li>
</ul>


People love a great underdog story. Whether it be Paul Potts in Britain's Got Talent TV show, Rocky Balboa vs. Apollo Creed (in the Rocky movies), or Elastic vs. Google, many people around the world root for the underdogs. In the case of Elastic, it had a sizzling IPO debut last week. On the first day of trading, Elastic share price jumped out in the open and closed at $70, representing 94% higher than the IPO price.
At the current price of $70, Elastic has a market cap of US$4.9 billion. Alphabet Inc Cl C (GOOG US) has a market cap of US$809.4 billion, so Elastic's market cap is only 0.6% to that of Alphabet. If Elastic can capture only 1% market cap of Alphabet, that would represent a market cap of US$8.1 billion, which would be 65% higher than current levels. 
All in all, Elastic has become one of the best performing tech IPOs this year. Elastic is viewed as a major underdog to Google. It remains to be seen what the tipping point will be that could force Google to shift its strategy to re-focus its efforts in capturing the enterprise search market. Meanwhile, we believe that Elastic has an excellent "window of opportunity" to capitalize on its successful IPO to make solid tuck-in acquisitions and further improve its enterprise search services. Thus, we remain positive on Elastic. 


Elastic Post-IPO: A Great Underdog Story Versus Google

Elastic NV

Elastic Post-IPO: A Great Underdog Story Versus Google