The Short Thesis for Cloud Computing Company, ServiceNow Inc

We believe that ServiceNow Inc (NYSE:NOW) ("NOW" or the "Company") is highly overvalued. We are short the stock.

ServiceNow Inc (NYSE:NOW) was taken public earlier this year at $18/share and has since ridden the cloud computing wave to a price of $30/share, implying an eye-popping 18.3x 2012E revenue multiple. Even if ServiceNow becomes the market leader and grows its share of the $1.5bn IT Help Desk market from the current 10%-15% to 30%, we believe the stock is still worth less than half of its current trading price.

We have spoken to numerous...