D'ai of the Triffids: Office Software Triage
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Software investors witnessed the stunning arrival of AI with awe and inspiration.
Last summer, after an inexplicably unrecognized multi-year gestation, the carnivorous nature of this new technology become clear.
Investors in common stocks of companies thought to lead in AI implementation, distribution and application still soar high above, while investors in software and payments names are still writhing at ground zero, some still blinded and others just gone mad as the losses burrow deeper and deeper.
Some months back I began to understand there was more to it than “the LLM ate my baby.” I had an idea to help as many of these investors as I could.
Welcome to office software triage. It begins with understanding.
Technical forces started brewing as software debt started to underperform, with yields first dipping to par, and then opening up a yawning gap, a widening discount to par.
Oracle may have seemed the first public victim in software, as its credit default swap (CDS) insurance prices skyrocketed.
But Oracle’s CDS spreads had been widening on Oracle’s foolhardy quest into hardware.
The carnage was actually away from public markets – bankruptcy filings surged among private software and IT companies during the third quarter of 2025.
Public market investors – all of us common stock investors – did not see the same picture in the stock market. Virtually no public companies have gone bankrupt, and certainly not in software.
Nevertheless, the second half of 2025 saw a dramatic simultaneous collapse in a set of former stock market darlings – the software/SaaS companies that had for years traded royally at 25x, 30x, 35x sales.
The collapse was not entirely fundamental.