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Kerrisdale Capital Management Issues Letter Urging Sellside Analysts of ServiceNow to Calculate the Correct Number of Fully



   Kerrisdale Capital Management Issues Letter Urging Sellside Analysts of
ServiceNow to Calculate the Correct Number of Fully Diluted Shares Outstanding

PR Newswire

NEW YORK, Jan. 9, 2014

NEW YORK, Jan. 9, 2014 /PRNewswire/ -- Kerrisdale Capital, a private
investment management firm, has published a report on the inaccurate fully
diluted share count of ServiceNow (ticker: NOW) being calculated by numerous
equity research firms, resulting in widespread valuation mistakes. Kerrisdale
believes that NOW shares are materially overvalued, a problem that is
exacerbated by various sellside analysts reporting a figure of 138 million
shares instead of the actual 165 million fully diluted share count. 

Kerrisdale's groundbreaking expose can be found here:
http://kerrisdalecap.com/commentary/2014/01/09/servicenow-now

Multiple sellside reports fail to include ServiceNow's 25.5 million option
pool or the additional 4.8 million of restricted stock units, which leads to a
market capitalization of $8.1bn at the current $58 share price. This market
capitalization only reflects NOW's basic shares outstanding.

Based on NOW's 138.7 million shares of common stock, 25.5 million outstanding
stock options with an average exercise price of $8.12, and 4.8 million
restricted stock units, NOW actually has 165.4 million fully diluted shares
outstanding and a market capitalization of $9.6bn.

"Sellside analysts ought to be able to calculate the fully diluted share
counts of the companies they cover," said Sahm Adrangi, Chief Investment
Officer of Kerrisdale Capital. "Many ServiceNow equity analysts would find
that their target prices would be 20% to 30% lower if they calculated the
correct fully diluted share count."

Kerrisdale previously wrote a report in November 2012 on NOW's valuation,
potential market size, and software capabilities. Kerrisdale currently holds
short positions in NOW.

About Kerrisdale Capital
Kerrisdale Capital Management, LLC is a fundamentally-oriented investment
manager that focuses on long-term value investments and event-driven special
situations. Kerrisdale has $300 million in assets under management and is
based out of New York City. 

CONTACT: Agnes Cao, 212-257-4385, acao@kerrisdalecap.com

SOURCE Kerrisdale Capital Management, LLC

Website: http://www.kerrisdalecap.com
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