i think a lot of tech startups looked at google or microsoft’s playbook of attracting & retaining top talent via stock based compensation and sort of assumed investors would trust them enough to get to the scale where it would no longer be such a meaningful drag on free cash flow

and its something thats been discussed for awhile but it’s being brought more into the spotlight because companies are getting the rug pulled from beneath them for not having the margins/scale etc to support this strategy so why should investors reward them w such a high multiple

when their capital allocation strategy has been to pursue revenue growth at all costs & (some companies more than others) dismiss the (non cash but real economic) expense of issuing equity to employees (some of these cos have massively increased headcount over the last few years)

i think it would definitely make sense to move the associated add back of stock based compensation to CFF & i think in general life would be easier if more steps were taken for accounting standards to more accurately reflect the economic free cash flow generated by the company