CFLT - Confluent: Sell To Lock-In Profits Reminds Us Of Cloudera Than MongoDB

• Confluent is the latest edition of an open-source technology to hit the market, following successful companies such as MongoDB/Elastic and not-so-successful Cloudera/JFrog.
• Commercial versions of open-source software have had mixed success. While MongoDB, Elastic, and Red Hat had great runs, JFrog and Cloudera have been disastrous for many post-IPO investors.
• Confluent competes with free and capable Apache Kafka, one of the most popular open-source projects in history. Convincing enterprises to pay up for Confluent would be challenging.
• We expect confluent to increase opex, especially in sales and marketing, to keep the growth going and invest in R&D to enter adjacent areas to support the growth.
• Investors should sell their shares now ahead of 2Q results and wait for full lockup expiration on 12/21/2021 before considering investing in the stock.

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