At Spaceship we’re long-term investors. But we still keep an eye on what’s happening in the market day-to-day.
These were the companies in our Spaceship Voyager portfolios that made some big moves last week (12 September 2022 - 16 September 2022).
Want more? You can see daily price moves and company news when you log into the Spaceship app.
Adobe
Adobe’s in the Spaceship Universe and Spaceship Earth portfolios.
If you see a piece of digital content, chances are that Adobe’s had a hand in it somewhere.
The company’s been at the forefront of digital design since it launched in the early eighties.
A reported 1982 investment by iconic Apple founder Steve Jobs helped Adobe become profitable in its first year, and it’s grown to a market cap of more than 140 billion USD at time of writing.
While Adobe began life as desktop software, it really hit the map when it purchased and publicly launched Photoshop 1.0 in 1990. It expanded its product suite to capture design, animation, and publishing software, before moving to the Cloud and offering subscription packages to its tools.
Last week, Adobe announced plans to acquire competitor Figma for $20 billion in cash and stock.
Figma’s a collaborative product design platform, which means teams of designers can log in and work on the same projects.
“Together, Adobe and Figma will reimagine the future of creativity and productivity, accelerate creativity on the web, advance product design and inspire global communities of creators, designers and developers. The combined company will have a massive, fast-growing market opportunity and capabilities to drive significant value for customers, shareholders and the industry,” Adobe said.
We use Figma at Spaceship when we’re collaborating on new app experiences.
$20 billion is a lot of money, so what does our Spaceship Voyager Investment Team think?
“Adobe shares fell due to concerns over the price tag but a bigger risk in our opinion would be Adobe not buying Figma, or an even worse outcome, another company like Microsoft buying Figma,” said the team.
“Given weakness in technology shares in general we would have liked a lower price but Adobe is expected to make almost US$20 billion in revenue next year. Overall we believe the acquisition makes sense, given the benefits in acquiring a competitor and the potential to build out real-time collaboration services on top of Figma.
The Figma acquisition helps answer some of our competition concerns. This CNBC article last month highlighted how Microsoft is increasingly favoring Figma versus Adobe.
Even though Microsoft and Adobe are close, the CEOs attended the same Indian high school, and both successfully transitioned their businesses away from desktop to the cloud, tens of thousands of Microsoft users prefer Figma due to its real time collaboration benefits.
Real time multi-user capability is a must have design feature but it's a difficult feat for Adobe due to its traditional file structures and the need for backwards compatibility. A similar example would be Google Docs (online) vs Microsoft Word (offline). In our opinion Google Docs is best when collaborating with multiple users online while Microsoft Word is best for offline activities.
We believe Adobe has made a buy rather than build decision, finding value in building out on Figma’s multi-user internet architecture rather than attempting to build their own. Now Adobe has the opportunity to be a best in class combination of Docs and Word.”
Starbucks
Starbucks is in the Spaceship Universe and Spaceship Earth portfolios.
What’s the wildest Starbucks order you’ve ever ordered?
Starbucks says there are more than 170,000 ways customers can customise their beverages at Starbucks stores.
Drinks like the Gummy Bear Drink go viral on TikTok.
@reneezurita13 🐠🐳 #starbucks #fyp #starbucksdrinks #starbucksrecipes #foryou #starbuckstiktok ♬ Heyyy - S Ξ L I
Coffee already takes ages to make, and the average drink capacity of a Starbucks store hasn’t increased that much over the past few years.
Adding in meal delivery services that make customising drinks even easier has meant Starbucks baristas have become overwhelmed and begun unionising.
So what’s Starbucks doing about it?
At a recent Investor Day, one of Starbucks’ announcements was that it’s been hard at work optimising kitchen layout and equipment for its stores. The aim is to speed up production for stores, while reducing the intensity of the Starbucks barista experience.
They unveiled a new system called the Siren System which reduces the production time of one drink from 83 seconds to just 35 seconds.
“Starbucks is a growth company, and our accelerated expansion is a direct reflection of the expected returns from our Reinvention plan,” said Starbucks Chief Financial Officer Rachel Ruggeri.
“By making strategic and highly targeted investments to drive value for partners, Starbucks will also drive value for customers and shareholders, while managing costs, improving margins, and elevating the Starbucks Experience for all stakeholders.”
What’s an Investor Day, and why’s it important? We asked the team.
“Unlike a quarterly earnings call, where a company will generally focus on short term financial performance and its current operating environment, an investor day can be an extremely valuable tool for assessing a company’s long-term financial health, vision, and future strategy.
Using Starbucks’ recent investor day as an example, we heard from interim CEO Howard Schultz, and the broader Starbucks leaders as they showcased the company’s Reinvention plan.
Each presentation provided detailed overviews of Starbucks’ core business segments, products and geographic regions and discussed the opportunities within these categories, whilst assessing the company’s competitive positioning. We were also introduced to the incoming CEO, Laxman Naraismhan who will join Starbucks on October 1, 2022.
Starbucks walked investors through the shifting consumer trends that have led to the need for a ‘Reinvention’ at Starbucks, and focused on articulating key investments in digital innovation needed to drive crucial enhancements across their stores, employees and customers' experience.
To tie their Reinvention plan back to the longer-term financial performance of the company, Starbucks introduced a framework for “a new era of growth” over the next three years (15-20% non-GAAP earnings per share growth, up from the previously given 10-12%), underpinned by enhanced comparable store sales growth (translating to 10-12% annual revenue growth), increased store count growth, continued margin expansion, and disciplined capital allocation.
Investor days like these are important as they help us understand how a company plans to create and capture value over the long-term.”
The Spaceship Universe and Spaceship Earth portfolios invest in Adobe and Starbucks at the time of writing.
Important! We’re sharing with you our thoughts on the companies in which Spaceship Voyager invests for your informational purposes only. We think it’s important (and interesting!) to let you know what’s happening with Spaceship Voyager’s investments. However, we are not making recommendations to buy or sell holdings in a specific company. Past performance isn’t a reliable indicator or guarantee of future performance.
