No. of Recommendations: 32
Hi Dreamer and Inphanint. Thanks for responding to my post. And thank you too to everyone who recommended it. What an overwhelming response! I'm humbled.

Dreamer,

First of all, I got into the IT field early enough that developers were IT too, and I've always looked at it that way. I know the pace of change in that industry all too intimately. I retired early this decade, so much may have changed. I hope I didn't botch the question up too badly, in your eyes.

I think that I may have gotten to the crux of it when I talked about identifying use-cases. CEO Stoecker periodically gives us a hint of where potential use-cases might be found (although sometimes transcribers -- automated or not -- don't know what he's saying). If you see Excel users working with complex VLOOKUP functions, you've probably found a use-case prone to Alteryx conversion. In my career in IT (which ranged from business-side stuff like data modeling, through database coding (network as well as relational) plus database design and performance tuning, all the way through a brief stint as an AIX system administrator), I never had to use VLOOKUP in Excel. That doesn't mean the use-cases aren't there in the broader IT world. I just never touched them. That could be because I was always very close to the data and had native means for accessing it. If you use complex Excel VLOOKUP or know people who do (who fit within a broad definition of IT), those are use-cases that maybe Alteryx should hear about. I don't mean to imply that all that Alteryx does is replace VLOOKUP. All I'm saying is that when you see a complex VLOOKUP function, you've probably stumbled upon a use-case suitable for Alteryx. I hope that helps.

Inphanint,

I don't want to talk too much about the convertible debt without studying the Indenture document, which I haven't. The initial conversion is closer to $43 when you calculate using all the significant digits, but, no, conversion is not automatic when the dollar threshold is crossed. In the 10-K, Alteryx describes a formula that triggers when the debt first becomes convertible. That has occurred, so debtholders CAN convert, but when they choose to do so is usually at their discretion. On Alteryx's balance sheet, these convertible notes have shifted from long-term liabilities into the short-term category because their status has changed to actually being convertible. Maybe that's more accounting than anyone cares about... Convertible debt typically pays interest, and the debtholder will lose the stream of interest payments if they convert to shares, especially since AYX pays no dividend. People buying convertible debt probably have a different risk profile than most of this board's participants.

I also want to identify one potential problem associated with convertible debt. This issue is mentioned in the Risk Factors section of the 10-K. I know that this can and does occur -- at least sometimes -- because I've seen it firsthand with another holding of mine. Once the debt becomes convertible, anyone interested in converting would rather see a lower AYX share price than a higher one. Why? They get more shares. Bad actors who own the convertible debt and want shares could sow temporary fear, uncertainty, and doubt (FUD) to get more shares. I don't want to say that WILL happen here, but it COULD. We, as investors, need to be on the lookout for FUD attacks. That is always true, but especially so when convertible debt is outstanding. If the bad news being spread is really based on fact and it changes our investment thesis, we should consider selling. Most FUD attacks sound convincing but are largely based on innuendo. We need to steel ourselves and not be shaken out of our holdings because someone is spreading FUD to try and get a few more shares out of a debt conversion. I know that many of this board's participants have seen FUD attacks before, are well aware of what they look like, and will post their own warnings here when they see it. But perhaps some were unaware of the potential connection with convertible debt. I hope this too helps.


Fool on!
Thanks, and best wishes,
TMFDatabaseBob (long: AYX)
See my holdings here: http://my.fool.com/profile/TMFDatabasebob/info.aspx
Peace on Earth

Please note: I am not a member of any newsletter team. My opinions are my own and do not necessarily reflect those of the TMF advisers. I want to share my research with you since we’re all part of the larger TMF Community.
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