Broken Moats
Family-Office Long/Short Research, Variant Perception
AI's ability to remove friction from cancellations is likely to be a big part of Bending Spoons' undoing. Its model buys expiring software and raises prices, depending on customers staying despite that. The damage will not play out in a day; the company needs later and larger acquisitions to keep the story going. x.comÂ
Bending Spoons has a deeply flawed model and egregious valuation: it rolls up declining software firms, cutting R&D and staff and raising prices to report better metrics. As cohorts churn, ever-bigger deals are needed to outrun the melt: under $300 million in 2023, $800 million in 2024, $2 billion in 2025, $4 billion so far in 2026. With $6-7 billion net debt, it echoes Upland Software; dilution is certain. Shorting is tough until the December 28 lockup expiry widens the float. x.comÂ
Bending Spoons is not compelling because so much of its strategy is M&A, at a magnitude far beyond the typical. It made roughly 17 acquisitions over the past five years versus 3 for Broadcom, a count that may be off but is directionally right. M&A is not bad in itself, and Bending Spoons beats Accenture and Constellation Software among acquisition-led names, but there are better opportunities. x.com x.comÂ
Bending Spoons looks expensive at 14x revenue for a digital tobacco business whose portfolio is a fast-melting ice cube. The model could work given the endless supply of failed VC-backed apps with deeply loyal customers to buy and raise prices on, and Bending Spoons may lever up to take out some very big names. Yet the market does not credit existing SaaS companies with the same ability to raise prices on locked-in customers. x.com x.comÂ
Bending Spoons is a unique model of buying cheap, forgotten software businesses and cutting costs that could scale past $20B of annual revenue, but it is hard to forecast. The biggest red flag is organic growth slowing from low double digits to low single digits, raising pressure on its debt-fueled acquisition strategy, since layoffs are one-time boosts with large severance costs. Strong net revenue retention may rely on price hikes; churn after two or three years is the key question. x.com … Show more
Software companies face a multi-year repricing because AI has removed the scarcity that made software valuable. For 20 years building software required engineers, letting SaaS firms charge monthly fees forever; when anyone can build a working product in a weekend with Claude, software stops being the moat. Atlassian is down 75%, HubSpot 69% and Figma 86%, and layoffs show headcount no longer scales with output. Survivors will be those with distribution, data and trust underneath. x.comÂ
FactSet risks having its app usage automated from outside and becoming unmonetizable as AI agents operate it directly. Its MCP integration was a huge advance and a growth driver, worth perhaps a 20% subscription uplift, but OpenAI's computer use worked well on a regular desktop session, if much slower, and simply noted the FactSet subscription to use when needed. SaaS bear points from earlier this year are materializing quickly. x.com x.comÂ
Bending Spoons' acquisition economics make its valuation look better than a rigid P/E cutoff suggests. It pays 2-3x revenue for targets and often earns back the investment in a couple of years, putting its effective P/E below 10x by this reckoning. At $33, the stock is about 12x estimated 2027 adjusted EBIT; the principle is buying below intrinsic value, not blindly rejecting anything above 10x earnings. x.com x.comÂ
Adobe faces a new subscription risk: AI bots will make cancelling finally easy. That removes the friction that has kept some customers paying. x.comÂ
Intuit risks becoming the example of AI commoditizing software, as AI and agents increasingly answer tax and bookkeeping questions instantly, cheaply or for free, removing the need for a costly middle layer. Its large paying base means AI probably won't crush it immediately, but pricing power and users could get squeezed. Its lofty multiples are likely over; it won't go to zero and could still be decent, but it is down 54% this year in a nasty stage-4 downtrend below its 200-day average. x.com … Show more
Airtable's switch to smaller teams puts Bending Spoons' overhaul playbook into practice. In the quoted post, @fedesimio says a large part of Airtable's team is being laid off because smaller teams ship more and better; a new Core team has shipped over 30 requests in three weeks. Bending Spoons would be a great buy if its stock gets close to $30 again. x.comÂ
UiPath may carry the highest business-model risk of any SaaS company because LLM agents with computer use compete directly with its robotic process automation. Rivals include Anthropic and OpenAI themselves. Its base is sticky for now, with 97% gross retention, regulated large-enterprise customers and long contracts, giving it time to sell AI tools. Still, it would be very surprising if gross retention stays in the high 90s, and the 2x EV/ARR multiple reflects the threat. x.comÂ
