015 Jeff Green & The Trade Desk on Mad Money


Jeff Green the Founder and CEO of The Trade Desk was on Mad Money with Jim Cramer on Tuesday May 14th. Here are my very rough notes:

Cramer Intro:

Stock down over last 2 weeks -- is it a buy?!?

Cramer said the company reported very strong earnings, management guided conservatively as usual.

Cramer: How much would investors have made if they bought IPO?

Green: IPO priced at $18 and was in mid 20s at end of day — up 1,000% in 3 years

Cramer: How does platform work?

Green: If you want to buy google or facebook, you go there. But they don't do the rest of the internet. What we do is help companies figure out...should I buy ads on NYT.com, CNBC, HULU, etc? 

We help them use data to figure out where to advertise.

Cramer: What is the Rule of 40

Green: Rule of 40 — trying to figure out the right multiple of profit and growth  Cramer commented TTD’s ratio is number 1 of any software company, apparently clocking in around 80 (I did not confirm)

  • Rule of 40 explained: The rule of 40% The rule of 40% is nothing more than a rule of thumb to analyze the health of a software/SaaS business. It takes into consideration two of the most important metrics for a subscription company: growth and profit. Which means that your growth rate plus your profit should add up to 40%

Cramer: You are willing to try China when everyone is running from China. Why is that smart?

Green: What we have done well is being able to partner with anyone because we don't own any media. We're the only company in the world that can partner with everyone. We did something unique which most companies don't do in China. We brought money into China vs out of China. It made it easy for us to go into China when everyone else is running out.

China: 2nd largest ad market in the world, growing twice as fast as US. We're hoping to go into every other country too

Cramer: Comcast gave HULU to Disney. How do you feel about that?

Green: CTV is one of the greatest transitions we will ever see. Most consumers can't afford another subscription. So ad-funded model is the way to go

TAM is growing from $725B to $1T in 7 years, growing at 1.5x GDP

The Trade Desk Founder and CEO Jeff Green on Mad Money with Jim Cramer