SPT - stevehemingway/trading GitHub Wiki

“Akram’s Razor” published on Sprout Social (NASDAQ: SPT — $2.88 billion), a social media management software company. Akram’s Razor called the company a COVID-winner and claimed the company’s recent growth largely comes from Salesforce’s decision to sunset its social media management software product, which has led to a large migration of customers to Sprout Social. Akram’s Razor wrote, in part,

“Thanks to Sprout management hard selling this one-off revenue opportunity as an organic growth inflection and the current brutal market dynamics in the rest SaaS; the market has massively mispriced the stock.”

Akram’s Razor also raised additional concerns that Sprout Social’s software has become “commoditized” and that competitor Sprinklr (NYSE: CXM) is poised to take share going forward. Akram’s Razor concluded,

“The short offers 40%-60% downside over the next six months and is in my opinion the best risk/reward short in the entire SaaS sector.”