Asana (NYSE: ASAN) has potential to go private, but will it? In this clip from “3 Minute Stocks Updates” on Motley Fool Live, recorded on March 30, Motley Fool contributors Brian Withers and Toby Bordelon speculate whether they think the SaaS company will go private and explain how it could be done.
% sfr %
Brian Withers: You might not know what Asana does, but customers really love this platform. Let me briefly explain it. They do a nice job with this slide in their investor presentation that much of what you do at work is really coordinating other work. Whether it’s setting up meetings, communicating, you end up duplicating work for goodness sake. The company estimates that 60% of your time is wasted doing work about work, whereas 40% is really the strategic value-added stuff that really moves the company forward. Asana is focused on making that 60% a lot smaller. The customers have loved it. Here’s the growth trajectory over the last number of quarters. You can see the growth down here, 57%, 61%, 72%, most recent quarter, 64% year-over-year growth. That’s just absolutely tremendous. Well, before I get to that, the stock has not done that. It has not gone up into the right. You can see it went up for a while. Then, along with other tech stocks, it’s really been sold off a lot since about November. Then, you can see even the couple of earnings reports that it has had, it hasn’t done anything to turnaround the stock. But I think this is a really great opportunity. When you look at paying customers, you can see the year-over-year growth there in the high 20s, low 30s. Customers spending more than $5,000, it’s not much, but that growth is even higher. Then, customer spending more than $50,000 a year, this is really where the rubber hits the road with the company and it is growing at triple-digit rates. I think this bodes well as, once companies get in, they see the value of the platform and then expand to more and more of their organization, which brings the spending up to more over time. So, I think this company has got a lot going for it.
Toby Bordelon: Speculate with me for a second, Brian, here. The stock is well off its highs and Founder and CEO, Dustin Moskovitz has been buying a ton of stock, right? There is no way this company gets acquired without his consent. But what I’m wondering, does he just decide to take this thing private soon and say goodbye to the public markets?
Withers: Well, let me share. You asked this question knowing that Dustin Moskovitz is a Facebook [Meta Platforms (NASDAQ: FB)] billionaire, yes. Most recently, the figure that I found, he’s worth $13 billion. He’s one of the first, he might have even been a co-founder of Facebook, but he was early on and has made his fortune absolutely with the company. Let me show you the last proxy release. Here you go. You can see right there in the middle, Dustin Moskovitz opens 5% of the A shares and like 70% of the B shares. The only difference between the A and the B shares is the B shares get 10 votes per share, so you can see the total voting power over here. He, by himself, has the share voting power to make any decision majority for what he thinks, so this is absolutely his company. But, he only owns about 34% when you do the math here, 34% of the company. Over the last year, you mentioned there’s been discussions that he’s bought about another billion dollars worth of shares over like the last quarter. But, also the share count has gone up from $164 million last year to $189 million, so really all his additional purchases have done has sort of keep him in about a third of the company. But, you saw there was another owner there and a co-founder of the company, Justin Rosenstein, who owns a considerable portion. Between the two of them, they own about 45% stake in the company and so you’re starting to get close to, you can take this company private without too much difficulty. I know Michael Dell did it in 2013, and he only put up $4 billion of the $25 billion needed to capture three-quarters of the shares. Certainly, Dustin Moskovitz could sell some of his Facebook shares and invest in Asana or certainly partner up with a PE firm to help him execute the deal. But given that the company is only $8 billion right now, it is totally a viable option for Dustin and his co-founder to take the company private, invest, and grow without the burden of being a public company.
10 stocks we like better than Asana, Inc.
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now… and Asana, Inc. wasn’t one of them! That’s right — they think these 10 stocks are even better buys.
*Stock Advisor returns as of April 7, 2022
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Brian Withers has no position in any of the stocks mentioned. Toby Bordelon has no position in any of the stocks mentioned. The Motley Fool owns and recommends Asana, Inc. and Meta Platforms, Inc. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.