SBC
SBC Medical Group Holdings Incorporated Common Stock
stock NASDAQ

Super high valuation over 15B and low revenues of 80 millions in Q2 and Adjusted EBITDA remains negative -$120.3M...
My view is: IonQ is a well-capitalized, hyper-dilutive defense contractor masquerading as a pure-play quantum tech stock. The underlying commercial momentum is real ($485M RPO, +287% YoY revenue), but the equity structure is designed to extract value from public shareholders via massive SBC (177% of revenue) and legacy SPAC warrants. It is a highly volatile narrative trade backed by U.S. national security interests, but structurally uninvestable for long-term fundamental equity growth until the dilution vectors are closed.

i've been bearish figma since the ipo but they keep getting battered despite ok earnings. SBC and not enough AI must be the drivers.

The $1.86B GAAP loss must be ignored due to the $1.65B warrant MTM charge. However, the Adjusted EBITDA loss of -$120.3M still excludes $141.8M in SBC. If SBC is treated as a real economic expense, the true operational deficit is catastrophic.

Is it to offset previous share dilution, considering its SBC and spun off in 2025?
and their capex was low at 40 million this quarter, they have plenty of fcf to buy back its shares.

Not nearly that cheap when you subtract SBC and insurance reserves. Still looks reasonable on a forward basis though, and I'm hoping it drops to low 60s so I can add some more.

I'm not going to have staff selling their SBC into weakness.
Plus, we're locked up for another month, right? Can you image how low it might be by then?
Not on my watch.
Call up the marketing firms; we need all the bases covered. I don't care if we need to double up their contracts. Get it f'in done.

Happy to debate!
1)Share dilution was 9.5% YoY despite the buybacks. Buyback is currently small, and I taper dilution down to 2% (down from 5%) after the acquisition related issuance and preferred stock dilution. this will mainly reflect SBC and any future unmodelled dilutive effects thereafter. Series A auto converts by FY28 which could equate to a large step rather than a smoothed increase as I have modelled. Series B carries a paid in kind dividend feature that keeps growing the share count independent of any new financing event.
2) I dont use multiples. I only have implied P/FCF multiple for reference. Terminal growth at 2% and this is pretty standard. I also account for a sharp drop in real growth to the terminal growth rate by factoring in a competitive advantage period formula that brings growth to its terminal rate over (in this instance) 22 years.
3) I wasn't able to find any proof that most of the industry growth is coming from sugar free. But with that point in mind, I also have Celsius growing beyond industry.
4) "It is the hottest energy drink company on the market now and has a ton of room to grow in the under focused female wellness population."
\- Perhaps... but until the brand cements itself, it is also at risk of becoming yet another brand fad. There's not really a moat of any kind here (eventually it's possible - but as of yet I dont view Alani Nu as having any moat). Names like Red Bull or Monster are household. But we will have to wait and see which brands truly come on top in the wellness energy space long term. It could be far more concentrated or competitive than either of us realize. But IMO, its better to be conservative and discount it until it truly becomes forecastable.
5) Absolutely possible that I am underweighting further international expansion. That's where my other scenarios come into play and even with further growth without margin compression, its just not attractive to me (although it definitely starts to look better with a 7% 7-year IRR). in the base case scenario, I would still wait until $20/sh for it to fit my framework.
6) Its fine if you believe Management's margin comments, but again I would rather be conservative based on what I view as realistic. Not accounting for competition in a sector that is seeing this type of growth is careless especially when you are already seeing the likes of Kirkland entering.
7) Again, you make an absolutely fine point, but I could say you are underestimating the impact of competition. Competition does not mean Celsius is dethroned. but it does mean that we can likely expect both top line, and margin compression.
Only time will tell which scenario plays out, but The reason I posted this was that I noticed many others only focus on the growth without recognizing the competition, and likely scenario where growth tapers and margins compress.

Increasing SBC is painting a very ominous future

Thanks. Fico would be wonderful.
The main issues (besides the whole biz vs vantage score by the 3 credit bureaus actively promoted by the administration ) is also the SBC where it is actively added back to adj eps.

I am assuming some stuff away, which I should make clearer in the posts. I only have the data for FCF, SBC and CAPEX going back to 2009, so I can't make a cleaner comparison going back in history. I'm assuming that the gap is widening (which it is in the medium term, for certain). SBC is a relatively new thing, so I imagine there is more of a gap between net income and true FCF now than there was in the 1980s. CAPEX is cyclical, though the one super cycle I'm missing is the fiber buildout leading up to the [dot.com](http://dot.com) crash. It's likely that a FCF-based multiple would have looked worse in 1999 as well. Though just from remembering that time vs now, I don't think there was nearly as much CapEx buildout then as now.

the CapEx and SBC adjustment is the right instinct and most people do not bother. but there is a consistency problem that I think changes the conclusion.
if you are computing True FCF yield today with the SBC adjustment, you have to compute it the same way in 1987, 1992, 2000 and 2008 before you can say today matches those. SBC as a share of earnings is a completely different animal now than it was in the eighties, it barely existed as a line item. so the historical comparison points are almost certainly earnings-yield based while your current number is FCF based, and that alone could be most of your 2.51%. would want to see the whole series built with one definition.
the other issue is n. you named four episodes since 1987. that is four observations of a condition that is measured continuously, which means you are describing a state the market has been in for a meaningful fraction of history and then selecting the four times it was followed by something memorable. the test that would convince me is unconditional: take every month the gap was below some threshold, look at forward 1 and 3 year returns for all of them, and compare against the unconditional base rate. if the gap has predictive content it shows up there. if it only shows up in four hand-picked years, it does not.
your positioning is coherent given the view, so this is not a criticism of the portfolio. it is a criticism of treating four events as evidence.

Honestly the "settings" matter a lot less than knowing which ones actually move the answer. Discount rate and terminal growth do almost all the work — in a normal 10-year model the terminal value ends up around 60-75% of total present value, so you're mostly forecasting a number 11 years out and pretending the first decade was the analysis.
Rough starting point: 5-10 year explicit forecast, 8-10% discount rate for a stable large cap (I just use a flat required return instead of building a WACC, CAPM betas are noise at this level), terminal growth 2-2.5% and never above long-run GDP — put 4% in there and you're implicitly saying the company outgrows the whole economy forever. Then run the sensitivity grid before you trust any single output: on a typical model, moving terminal growth from 2.5% to 3.5% adds roughly 12% to the value, and taking the discount rate from 9% to 8% adds about 20%. If your thesis only works at the friendly corner of that grid, it isn't a thesis. Two other things beginners skip: normalize FCF over a full cycle rather than using last year's, and actually subtract SBC.

So the SBC basically just washed out the buybacks in terms of actual share count? That's wild. I wonder if megcaps have it worse since they're buying back at such high prices anyway.

There’s a lot of seeing the forest for the trees in this thread.
There’s benefits of using SBC versus cash.
1) The reality is, even if this ultimately dilutes shareholders, they’re able to use real cash towards capex rather than compensation. This shouldn’t be shocking that software companies are relying heavily on this concept right now.
2) SBC is based on GAAP and it’s very nuanced. ASC 718 is a very heavy read. While a general scanner is great, how we recognize PSUs versus options for example are completely different. And we could very well be recognizing expense for PSUs that have a 0% chance of paying out because that’s what the guidance prescribes. We could have options that have already vested so no expense is being recognized this year but can be executed.
All I can say is read the 10-Q/K and understand the specific awards and the vesting/expense recognition behind it.
SBC does not equal cash and it can’t even really be thought of that way for so many reasons. Partially cause it will never be paid in cash, partially because it may never meet the vesting requirements and partially because it’s valued (generally) at the Grant date which is generally 2-5 years ago

I guess I wonder what you think they're going to acquire here. Right now they appear to think that GTBIF is the best thing to invest in, which is why their buy backs at $6.11 is where a lot of FCF is going, and it exceeds their SBC package requirements, which is the level they were spending at when it was closer to $12-15.
They've definitely got the capacity to do some M&A, but they might have better opportunities if they wait.

the screen bundles two different problems: SBC dilution and buybacks at peak valuations. one's structural to tech comp, the other's execution failure; the 10-K won't show which.

yes, in the sense that a lot of SBC is warrants that vest over time?

Noted. This analysis is using dollar values for both SBC and share buybacks. I use dollar values because if a company does buy back stock at peak multiples, then they will spend more money for less shares, which reflects in amount spent / share count.

The screen conflates two different failures though. A company that never buys back and just dilutes via SBC is one problem. A company that buys back consistently but overpays for its own stock at peak multiples is a different one, and it can still show flat or falling share count while destroying value per share. Price paid matters as much as the buyback happening at all.

My comment more or less covers your point.
I worked in big tech. SBC and RSU are offered to both attract and retain talent. That is what keeps the innovation wheel spinning.