# Long / Short Pitch Sector Overlays Load only the overlay that matches the prompt. These overlays sharpen trade judgment; they do not replace the core pitch workflow. ## SaaS / Subscription Software Long Use when the pitch is a public software long, especially vertical SaaS, application software, payments software, or workflow software. ### What a PM cares about - whether growth durability is mispriced - whether retention, expansion, pricing, and seat/module growth support the target multiple - whether cash conversion is better or worse than headline ARR / revenue growth implies - whether margin expansion is operating leverage or temporary cost timing - whether SBC, restructuring, implementation costs, or deferred revenue distort economic FCF ### Must-have pitch facts - revenue growth, ARR/MRR if available, NRR, gross retention, churn, and backlog where relevant - gross margin, EBITDA margin, FCF margin, SBC load, and rule-of-40 context - net cash/debt and diluted share count - peer valuation and the company's own trading history - next 1-3 catalysts: print, guide, product event, price increase, investor day, margin reset ### Common failure modes - calling a stock cheap without explaining normalized growth - leaning on AI/product narrative before it is economically measurable - using EBITDA without addressing SBC or FCF conversion - assuming rerating without a catalyst or peer/history support ### Monitoring triggers - retention / NRR - cRPO / bookings / billings - gross margin and FCF margin - large-customer commentary - guide revisions and consensus estimate drift ## Consumer Internet / Platform Short Use when the pitch is a short in consumer internet, marketplaces, ad platforms, fintech platforms, or other network-effect assets. ### What a short seller cares about - what still supports the multiple and why that support should break - whether deterioration is cyclical, execution-driven, regulatory, or structural - whether the catalyst path is strong enough to offset borrow, crowding, and timing risk - whether a healthier segment or cash balance can keep the equity alive longer than expected ### Must-have pitch facts - key usage metric: MAU/DAU, payer count, transactions, GMV, engagement, conversion, retention, or monetization - segment split between deteriorating and healthy assets - revenue growth, margin trend, guidance quality, and intervention intensity - borrow/carry/crowding if available - scenario price targets including adverse upside risk ### Common failure modes - descriptive bear case with no catalyst - ignoring the offsetting healthy segment - no cover discipline - assuming multiple compression without explaining what forces it ### Monitoring triggers - user/payer metrics - monetization intervention quality - guide revisions - regulatory milestones - next one or two earnings prints ## Pair Trade / Relative Value Use when the pitch compares two securities, two baskets, or one security against a benchmark hedge. ### What a PM cares about - whether the trade is genuinely relative value or just two unrelated directional bets - whether factor, beta, sector, rates, FX, commodity, or liquidity exposure overwhelms the spread logic - whether the long and short legs have comparable catalysts and time horizons - whether the hedge ratio is explainable ### Must-have pitch facts - long leg and short leg thesis - valuation spread, earnings revision spread, KPI spread, or credit spread differential - hedge ratio, beta residual, sector/factor exposure, and liquidity mismatch - catalyst path for both legs - break conditions for each leg ### Common failure modes - pair trade is actually net long or net short with no disclosure - using a valuation spread without explaining why it should close - ignoring idiosyncratic event risk in one leg - no rule for what happens if only one leg works ### Monitoring triggers - spread / ratio movement - relative EPS revision trend - catalyst slippage for either leg - factor exposure drift - borrow or liquidity changes ## Event-Driven / Special Situation Use when the pitch is tied to merger arbitrage, spin-offs, litigation, regulatory approval, restructuring, index inclusion, tender offers, or other discrete events. ### What a PM cares about - expected value after probability, timing, and break downside - what the market-implied probability is versus the pitch probability - whether the legal, regulatory, shareholder, financing, or process path is correctly mapped - whether the trade can be resized before the final binary event ### Must-have pitch facts - current spread or price - consideration, timing, outside date, and break price - probability tree - required approvals and milestone calendar - downside if the event fails ### Common failure modes - treating management confidence as probability - ignoring timing drag - no break price - no interim milestones or resize triggers ### Monitoring triggers - regulatory docket updates - shareholder vote timing - financing conditions - court / agency milestones - spread movement versus news ## Credit Markets Handoff / Equity-Risk Signal Use only when credit data is an input to a listed-equity pitch, not the security being recommended. ### What an equity PM cares about - whether refinancing stress, maturity walls, liquidity runway, rating pressure, or CDS/spread signals change common-equity downside - whether equity optionality survives under realistic enterprise value and liquidity stress - whether the credit read-through changes sizing, hedge posture, catalyst timing, or the kill case ### Required local framing - state the equity-security implication first - label credit data as equity-risk context or Credit Markets handoff - route bond, loan, CDS, covenant, recovery, restructuring, spread/yield, and debt-security analysis to Credit Markets ### Common failure modes - turning a credit instrument into a local Public Equity recommendation - using headline spread or CDS widening without an equity downside mechanism - implying recovery or covenant analysis without Credit Markets support ### Monitoring triggers - liquidity runway and maturity-wall updates - refinancing announcements or rating actions - CDS/spread signals that move with equity drawdown risk - Credit Markets handoff output that changes the equity case