Hey all - Had a lot of thoughts on the Generative AI trend and decided to write a about it. Hope you all enjoy!

"Said another way, Generative AI models deduct results not on account of their own intelligence but through a probabilistic matching function. Asking ChatGPT what the color of the sky is will produce an output reading “Blue”, but only because the mountains of data in which the model is trained on tends to produce that very fact. This results in a familiar dynamic within the tech sector: Generative models are only as strong as the data it's trained on."

"Broadly speaking, Big Tech’s renewed focus on cost discipline and efficiency has created a vacuum for new startups to tackle this market. Outside of OpenAI, prominent operators in this market include Stability AI, Midjourney, Runway, Jasper, and many more."

"I see iterative improvements over existing AI-assistants like Alexa (Amazon), Siri (Apple), Cortana (Microsoft), and Watson ($IBM) thanks to the conversational nature of large language models. In addition, I see generative AI anchoring the tool set for metaverse developers – particularly as games like Horizon Worlds, Roblox ($RBLX) and Minecraft leverage bots or daemons to create authentic social experiences in digital spaces."

$META $AAPL $AMZN $GOOG $MSFT $IBM

Hey all - check out my latest post on Substack: "Now Do Japan", where I chat about the Bank of Japan's uncharted path towards a tightening monetary regime.

In February, Japan posted its highest inflation reading in over 40 years — invoking memories of the Baburu Jidai, or the “Bubble Era” of the 1980’s. Much ink has been spilled over this era of exuberance, which often finds parallels to other financial manias of lore, including the South Sea and Dot Com bubbles. Infamously, the Tokyo Imperial Palace, home of the Japanese emperor, once received an appraisal that valued the property greater than the collective value of Californian real estate. Of course, this boom era followed the entrenched bust known today as Japan’s Lost Decade, an era of paltry economic growth and deflation. Even today, the Nikkei 225 (Japan’s largest stock index) remains nearly 10,000 points (-30%) below the peak seen in 1989, prompting some to question if Japan had ever escaped their lost decade.

---------------

A reversal in policy, including the dissolution of bond purchases or a hike in interest rates, would represent a massive shift in philosophy from the BoJ. Not only that — but these actions would add considerable stress to the ongoing economic tightening attributed to the actions of central bank peers. It’s estimated that the Bank of Japan deployed upwards of $300B to defend the yield curve cap in the wake of the December ‘22 announcement. This incremental liquidity was alleged to be the primary driver of looser financial conditions in the back half of last year.

Hi everyone - A quick Merry Christmas, Happy Holidays, and a Happy New Year to all!

Today I wanted to share some thoughts on Disney $DIS, one of my longest-held positions and presumptuously one of the most popular retail stocks out in the market. As of this writing, Disney is trading just north of $80/share, or ~20x forward EPS estimates. More worryingly, however, Disney shares are a mere 5-7% higher than where they were during the March '20 low, when Disney's largest business segments were closed to accommodate COVID lockdowns. Nevertheless - despite the return of Disney theme park visitors, live sports, and box office blockbusters - investors seem dour as ever about Disney's outlook.

While Disney is no stranger to controversy, shareholders would be prudent to acknowledge the elephant in the room - in this case, the return of former CEO, Bob Iger. Iger earned immeasurable levels of goodwill among Disney shareholders & customers over his tenure as CEO, as Disney's acquisitions under his leadership (Marvel, LucasFilms, 21C-Fox) serve as the cornerstones of Disney's media dominance. Collectively, it's hard to argue that any other media, streaming, or cable operators carry stronger IP than Disney does today.

That said, since Iger's departure in 2020, Disney's brand equity has noticeably diminished - and Iger himself is responsible for most of the blame. Recent reports in the WSJ, FT, and Barron's highlight the intra-company controversy that undermined Chapek's brief reign as Disney CEO. Chapek - despite being appointed by Iger to executing his strategy in line with the company's push to D2C - was ousted by a cadre of Iger lieutenants who felt Chapek was mismanaging the Disney brand. In a remarkable bout of unity, executives, employees, and fans alike were not pleased with Chapek's stature as CEO. Nevertheless - without getting into the specifics - it is worth considering that many of the same issues that hindered Disney under Chapek have not magically disappeared with the return of Iger.

Part of the reason why Disney the business (as opposed to Disney the brand) has been struggling can be traced back to a broader shift in the media landscape. Given the prevalence of streaming platforms and "a la carte" television, households have been slowly weening themselves off of the linear cable business model that Disney maneuvered so meticulously. Historically, Disney's ballooning arsenal of channels and intellectual property (i.e. their bundle) gave them the upper hand over cable operators when it came to pricing and demand. Cable operators who wanted to air ESPN on their networks were also forced to pay for oddball assets like ESPNU, as well as the remaining Disney channels. In the age of streaming, however, Disney does not wield that same level of power, and it is uncertain if properties like FX, National Geographic, and ESPN can find success amidst this transition.

This brings me back to the largest indictment of Iger's leadership - the $71B acquisition of 21st Century Fox (FX, NatGeo, Fox Networks) is deeply antithetical to the D2C strategy. What's more, the price tag for those assets is staggering, comprising roughly half of Disney's market cap, and 33% of their enterprise value - with only a modest improvement in Disney's intellectual property.

In addition to the slowdown in Disney's television segment, consumers en masse are spending less time at the movie theater, with theater attendance down nearly 33% in '22 versus '19. Per the chart below, movie theater attendance has been on the downward trend since the turn of the century, with 2003 marking the peak.

In July '18, Netflix had surpassed Disney in market capitalization (~$180B) as their product had effectively redefined the media category. Consumers grew increasingly enamored with the absence of commercials and a seemingly unlimited (yet familiar!) selection of shows and movies. No longer was Netflix a buyer of fringe media assets - Netflix had evolved into producing their own content while acquiring the rights to other popular franchises, threatening the dominance and viability of both cable television and movie rivals. On top of that - Netflix stock commanded an enormous premium to industry peers. At the point in which Netflix leapfrogged Disney in market cap, the company was worth 14x LTM sales, versus the 3.3x multiple assigned to Disney. Naturally, the width of this spread was the impetus behind the streaming wars of '19, as Disney (Disney+), Comcast (Peacock), Warner Media (HBO Max), among others unveiled their ambitions for an exclusive, direct-to-consumer product.

Fast forward to '22 and the premium assigned to Netflix has narrowed drastically relative to competitors. More so, the allure of streaming is not as hot as it once was: Churn rates have settled higher than executives might've previously estimated, and the cost of producing and acquiring IP remains incredibly capital intensive. As of Disney's latest reporting period, the direct-to-consumer division posted an operating loss of $1.5B, versus the $630MM lost posted over the same period a year prior. Sure - while Chapek's firing can be attributed to a multitude of factors - his failure to manage investors' expectations in a market that demands profitability turned out to be his biggest misstep yet.

Part of what I believe to be my investment edge is my ability to soberly assess the trajectory of a company amidst broader market noise and emotion. In the case of Disney - I, for one, don't believe their streaming business is underperforming to the degree that the market appears to think. Rather, I think Disney's D2C arm is splitting the difference between over and underperforming per their 2019 Investor Day (below, H/T @tsoh_investing). The company is two years ahead on subscriber growth (Exp. 90MM subs in '24 vs. Act. 103MM sub in Q4 '22) and is within the margin for error for peak operating losses. I am writing this under the conservative assumption that '23 will not show any margin improvement - surely Disney's recent price action reflects a high probability of steepening losses next year.

All in all - I don't believe Disney is a screaming BUY at these levels. There is, however, something to be said about the progress they've made amidst their transformation. Investors may be prudent to see how Iger manages his return - particularly as they restructure certain divisions and identify avenues for shareholder returns (ESPN spin-off, anyone?). I am personally staying put for now, but am keen to see what management will do to regain shareholder trust.

In the meantime, I may go catch Avatar 2 in theaters... I've heard good things!

Thanks for reading.

Hi everyone - I hope my American readers had a great Thanksgiving! Today I wanted to air out my grievances on the "Buy Now, Pay Later" market and how investors in these companies (myself included) should reexamine the true nature of these business models.

I don't mean to beat up on Affirm in particular, this was a global phenomenon! Last summer, Klarna (highlighted above) was the most valuable private fintech in all of Europe, valued at $45B (>30x NTM sales) following a round led by SoftBank. Klarna was quick to remind investors of historical profits (and ongoing profitability in core markets) as their edge over competitors. Similar to Affirm, Klarna also highlighted the breadth and scale of their retail partners to reinforce their astronomical valuation. Nevertheless, the company continued to post mounting losses and charge-off rates amidst a tightening monetary environment. Klarna did not have to go public for the market to properly discount these losses: Earlier this summer, the company announced a new round of financing at a $6.8B valuation, or an >80% drawdown from the mark set in 2021.

For the sake of angry commenters, I want to emphasize that there is nothing fundamentally wrong with BNPL services, nor do I believe these companies will fall off the face of the earth. Consumer lending is ubiquitous within the global economy and some of the world's largest companies ($V, $MA) are in the business of extending short-term credit to individuals.

The concern I have with BNPL companies is their characterization as anything other than just a bank. Sure - companies like Klarna, Afterpay, and Affirm have transactional operating segments that take a 2-3% cut on all transactions made using their service - which leads many investors to believe that credit card businesses are an appropriate analogue (and thus should command comparable valuation multiples). The caveat with this reasoning is that BNPL companies are engaging in bank activities - providing point-of-sale credit without interest nor thorough credit checks. Traditional card businesses, by contrast, are marshaled by banks with strict guidelines on interest rates, credit limits, and determining general creditworthiness. The mechanism in which BNPL companies issue credit to their customers resembles that of a bank. In Klarna's case, the company collects customer deposits as a means to leverage their status as a licensed European bank and reduce their cost of capital. However, when interest rates are spiking as quickly as they are today, the debt markets don't really care how much in deposits you have.

Again, with the benefit of hindsight we can comfortably say that any company trading 30x forward sales or higher is overvalued, much less a bank. Banks, more often than other stocks, are priced based upon their book, or net-asset value. Banks generate revenue from their asset base and are subject to stringent capital reserve ratios and lending standards. As a consequence, bank stocks (even the largest and most successful, i.e. JPM, BRK) don't typically command huge premiums to their book value (see below).

The digital origins of today's finance businesses has led some investors to question the merits of a Price-to-Book valuation method, particularly given forward growth expectations. That being said, Buy Now, Pay Later is indubitably a banking activity. Similarly, collecting deposits is a banking activity. Registering as a bank? Sure sounds like a banking activity to me.

Thanks for reading!

Tom

$DELL is the eponymous brain child of Michael Dell, one of America's most prolific entrepreneurs and one of the leading manufacturers of personal computers across the world. However, since their spin-off of VMWare ($VMW) in '21, Dell has spiraled down to a $50B enterprise value & a $25B market cap - only a tad higher than its take-private valuation in 2013. While there are plenty of headwinds to Dell's business (which I will detail below), I have reason to believe that the Dell story is misunderstood, and could potentially provide ample upside for patient investors.

At just about 6x NTM earnings, Dell appears to be priced like a mining company, much less a leader in infrastructure solutions and personal computing. Then again, is this multiple justified? There sufficient evidence that points to a massive "pull-forward" in demand for PCs between '20-'21, thanks to the trends in remote work and to a lesser extent, a booming job market. The weakness in PC demand has been corroborated by tangential businesses such as semiconductor manufacturing (See $INTC) and technology distribution (See $BBY) who have been vocal about their forward expectations in this market. For Dell specifically, consensus estimates appear to be pricing in softer demand - with fiscal Q3 '23 sales and EPS expected to fall by -6.5% and -4.2%, respectively. Looking forward, analysts estimate DELL's FY24 sales & EBIT to come in -2% lower on the year, with EPS gaining about 2.4% over the same period.

In addition to slowing PC demand, DELL can be scrutinized for their enormous debt load - roughly $27B as of the latest quarterly release. This debt load accounts for over 100% of the total capitalization and about 50% of the enterprise value. Of course, while this debt isn't a fatal risk to DELL's viability (EBITDA covers interest expense 7x over), this burden will prevent the business from being aggressive in M&A and returning cash to shareholders. As we'll get to in a second, Dell's M&A activity has helped the company identify avenues to unlock shareholder value, including the spin-off of VMWare.

Dell breaks their operations into two segments - the Client Solutions Group (CSG), which includes hardware offerings like PCs, monitors, printers, desktop PCs, and similarly related products, and the Infrastructure Solutions Group (ISG), which encapsulates the "EMC" franchise and provides digital services like networking, data backup & storage, analytics, and cloud services. CSG accounts for 55-65% of quarterly sales, with the difference attributed to the ISG segment. While the CSG story appears to be dragging on the company's performance, I don't believe the market is fully pricing-in the strength of the ISG segment. Gartner's Magic Quadrant named Dell a leader in enterprise recovery and backup solutions, alongside exciting startups like Rubrik (~$5B valuation), Cohesity (~$4B valuation), and legacy players like Commvault ($CVLT), Veeam, & Veritas. Given rising prevalence and severity of ransomware attacks, services like Dell's Data Protection should see significant demand over the coming years.

In FY22, Dell's ISG segment yielded an operating profit of $3.7B (11% margin) on $34B in sales. Assuming 8-10% growth in this segment running into the back end of the year, the ISG business can surpass $4.4B in EBIT on $38B in sales. If we look at comparable infrastructure solutions businesses (Legacy players like $IBM, $CSCO, $HPE - in addition to niche/newcomers like $PSTG, $NTAP), the average business trades between 10-12x NTM EBIT. Assigning a similar multiple to DELL's ISG segment produces a "breakaway" valuation greater than $45B, or nearly 2x the current market capitalization.

It's important to emphasize here that this is merely one segment of DELL's business! If we run a similar function on the CSG segment, we get breakaway valuations ranging between $15-$25B, contingent on a 4-6x forward EBIT multiple, or greater than $30B using EV/S comparisons. These two segments collectively could support a sum-of-the-parts valuation for DELL that is at minimum, $65B, or over $85/share.

There is a lot more to unpack in this name, but I would be curious to hear from anyone who has a directional stance on $DELL in this market!

Meta Platforms $META reported Q3 '22 earnings yesterday, October 26th. The company managed to outperform consensus sales estimates of $26B (act. $27.7B, including FX headwinds), but fell short of EPS estimates of $1.86 (act. $1.64). As of this writing, Meta shares are down 22%, sitting at their lowest level since 2016.

Meta has been one of the more controversial battleground stocks of the last several years. In the eyes of bulls, Meta is the greatest customer acquisition platform to exist, overseeing cash-flowing assets that boast nearly 50% of the world's population as recurring users. Meta's bears, by contrast, believe the core business is crumbling into obsolescence, citing competing services, privacy and regulatory perils, and Zuckerberg's perfunctory pivot into "the Metaverse". What's interesting to me, as a biased Meta bull, is that many of the popular drags on Meta continue to be wrong! I'll break it down into a few parts:

As of Q3 '22, the company grew users across the spectrum of their Family of Apps. While the average price per ad has decreased, it is worth highlighting that this can be attributed to the monetization curve in Reels, broader advertising weakness, and recovery from ATT, which I'll get to in a second. It's also worth highlighting that Reels is now incremental to time spent on Instagram and Facebook, and is now operating at a $3B run rate. In '23, management anticipates growing returning to trend, seeing top line growth accelerating to mid-high single digits, with Reels recouping the $500MM headwind seen in '22.

It's also not clear to me that competing social media businesses are managing today's macro environment better than Meta is. TikTok, allegedly the largest existential threat to Meta's business, reported a loss of $7B in '21, and a $4B loss in Q1 '22, despite seeing remarkable top-line growth over the period. Bytedance (TikTok) obviously benefits from the opacity of private ownership and doesn't disclose operating segments. Putting geopolitical risks aside (which are legitimate!) TikTok's cash-burn and foray into the digital ads market likely won't be sustainable as investors scrutinize their $300B private market valuation amidst slowing demand for ads. Advertising is clearly cyclical, and this weakness is expanding beyond just Meta, as seen in the recent results from YouTube, Snap, and a few others.

While I don't believe Meta has totally conquered this obstacle, I'm relieved to see this is still a priority for Meta management as it diminishes "monopoly risk" and explains the company's massive expenditure into machine learning and artificial intelligence. The onset of Apple's privacy policies are almost certainly under-attributing sales to Meta's advertising services, producing underwhelming RoAS for their clients, and thus damaging the company's stature as a potent customer acquisition tool. The chart from Stratechery below reflects this reality, showing a drop-off from advertising following the implementation of iOS 14.5 but also perhaps demonstrating the dilutive effects from adding incremental advertising slots in new and existing products.

That being said, Meta's innovations in internal commerce assets like Paid Messaging in WhatsApp, Facebook marketplace, among other bets, are pushing to insulate the company from these kinds of anti-competitive effects in the future. Not to mention, Meta's enormous expenditure into machine learning should help their attribution return to normal as advertisers get clearer insight on their ad spend.

As a Meta bull, it pains me to say that the company has lost control over their own narrative. Reality Labs commands enormous attention, and perhaps rightfully so! The company was renamed Meta, Zuckerberg spends a considerable amount of time talking about his vision for the Metaverse, and they've committed to even more spending on FRL in 2023. Without taking a directional stance on the Metaverse, this is unbelievably frustrating as an investor. Reality Labs accounts for ~$10-$15B of Meta's $30-$32B in annual capex. The company is literally not putting their money where their mouth is!

By contrast, Meta's investments in artificial intelligence, advanced computing, networking, just to name a few - dwarf the allocated spending towards FRL and, in my opinion, should command larger mindshare from management and investors alike. Even with that being known, the magnitude of Meta's capex is preposterously large, and you could argue that these investments have yet to show any accretion towards the top or bottom line. Without going so far as to accuse Meta of being a science fair project, one has to wonder when (if?) cost discipline will become a priority for management.

To borrow some of Altimeter Capital's proposal, Meta simply needs to reign in costs. With 88K full time employees, Meta's people are its largest cost center and the primary driver of opex growth in '23. A reduction in headcount would be accretive towards FCF generation and margin expansion.

Furthermore, Meta needs to show advertisers that their services can still deliver an attractive RoAS, whether that be through advanced attribution techniques or more insular e-commerce services. I believe the wheels are already turning in this regard, and expect promising results from the advertising business next year.

Finally, Meta needs to emphasize and lean into the success of the core business. Big blue Facebook can and should be a digital utility as they are the only recreational social network that prioritizes real personas and identities, unlike the pseudonymous and anonymous accounts found on competing social networks. Leveraging the social graph of their users should allow the company to provide useful tools and services that complement real life social experiences (Facebook events, Facebook groups, etc.). Instagram, in a similar vein, is and should continue to be the #1 location for content creators and discovery. Instagram can remain a sticky business by providing similar utility-like services to merchants and other brands who leverage the platform for engagement and communication. Last, but not least, WhatsApp has finally to begun to unlock monetization through business applications. The integration of WhatsApp and Messenger into other assets will assist the company in insulating commerce within their Family of Apps.

All in all, I'm still bullish on the long term prospects of Meta. That said, the company has a lot more wood to chop before I feel comfortable buying again.

Acquisitions are hot - in both the corporate and financial world, as battered stocks open the window for enticing M&A scenarios. Technology has been at forefront of this activity, as formerly ambitious startups seek reprieve from the brutality of public markets (and potentially a looming recession). Indeed, management teams have been forced to pivot from a "Growth-at-all-Costs" strategy to a model that scrutinizes capital allocation and shareholder returns. The unfortunate reality, however, is that there is no guarantee that the business will succeed in reaching profitability under a new strategy. Even if successful, the push to profitability may take several quarters, potentially devastating shareholder returns and employee morale.

As of this writing, Twilio is down ~85% from its all time high of $450/share (~$60B market capitalization), trading around ~$70/share on a $12B market capitalization. This latest mark for Twilio values the business at under 2.5x forward sales, or roughly the same forward multiple as 3M or Kraft Heinz. If you're perplexed by these valuation peers - you're not alone. Twilio grew their top line by over 40% last quarter while also guiding sales growth north of +35% for the back half of 2022. 3M & Kraft, by contrast, are forecasting slight declines in sales over the next twelve months. Does this make sense?

For many, this makes perfect sense. Twilio is a terribly unprofitable business - losing +$300MM on over $950MM in sales last quarter. The company has failed to produce free cash flow every quarter since Q2 '21, in which FCF was buttressed by $144MM in share-based compensation. The company's primary source of liquidity comes from secondary issuance, as detailed in the company's latest quarterly filing: "Our principal sources of liquidity have been (i) the net proceeds of $979.0 million, $1.4 billion and $1.8 billion, net of underwriting discounts and offering expenses paid by us, from our public equity offerings in June 2019, August 2020 and February 2021, respectively." Thus, not only is Twilio unprofitable - they are also extremely dilutive to existing shareholders, dragging the company's multiple below technology peers.

There is also concern of Twilio's "technology" categorization. Twilio fails to command any sort of pricing power, as reflected in their most recent quarterly report. In Q2 '22, Twilio saw COGS spike higher than sales growth thanks to an increase in "network service provider" and "cloud infrastructure" costs. As Twilio already runs a relatively unappealing margin profile, it is concerning to see such malleability in their top-line margins.

For others, however, Twilio provides a vital service to the App Economy and consequently the technology sector as a whole. The company's customers include household names like Uber & Lyft, in addition to thousands of other organizations who rely upon Twilio's telephonic APIs to communicate with customers, colleagues, and anyone else. With over 275K active customer accounts, Twilio benefits from an enormous first-mover advantage, not to mention extensive flywheel effects that can be derived from the company's scale. Indeed, Twilio's moat (if there is one!) comes from the company's vast distribution channels. Conceptually speaking, the replacement cost on Twilio's service would almost certainly surpass the company's current market capitalization (around $12B as of this writing).

All of this being said, what does Twilio's future look like? Surely they wouldn't want to issue new shares in this environment, especially if the company isn't anticipating profitability until '23. Rather, I believe Twilio would be a perfect candidate for an activist investor, or potentially a full acquisition, given today's valuation and the business's reach in enterprise software. Twilio's services, particularly messaging, should fold into a larger suite of enterprise software services, with messaging serving as the loss leader.

I'm curious to hear everyone's thoughts: Is TWLO ripe for an acquisition? Or are buyout funds starting to gag on new debt issuance? Similarly, can an activist right Twilio's sinking ship? Or will the company fall victim to the brutality of public markets?

Thanks for reading!

Tom

I have been trimming my position in OppFi ($OPFI) since this summer, given that my shares are now eligible to be written off as a capital loss. The journey as an OppFi shareholder has been treacherous and exhausting - an experience I wouldn't wish upon anyone. Then again, as a young investor, I'm thankful for the lessons that I have been able to take away from this mistake. I thought I'd share some with you all below:

1) If something is "cheap", it doesn't make it a good investment

Last summer, I ran a comparable analysis model on OppFi relative to other fintechs, noticing they traded between 4-6x Forward Sales while peers traded >10x forward. Without taking into account why this dispersion existed, this dynamic drove the crux of my investment thesis. Looking back now, it didn't make sense that names like Upstart ($UPST), SoFi ($SOFI), and Affirm ($AFRM) traded north of 20x forward sales. These names have since fallen from grace, hinting that the FinTech sector en masse was extremely overvalued last summer. Markets can move quickly - and if something is materially "cheaper" relative to its peers, it is not without reason.

2) Do the Work!

In hindsight, it is apparent to me that I did not thoroughly diligence the name as much as I should've. The comparable businesses listed above were barely analogous to OppFi, who had only recently changed its name from OppLoans. Indeed, OppFi was a legacy subprime lender masquerading as a cutting-edge consumer lending app. This was a lapse in my own research process. Instead of reading through merger documents and other SEC filings, I listened to podcasts featuring the SPAC's sponsors, the company's CEO, and others related to the deal. While I enjoyed these podcasts and certainly don't blame the hosts for interviewing these guests, it was clear that I was hearing a biased perspective from management and was perhaps getting too caught up in the promotional element of the SPAC process. Had I gone through the SEC filings, I likely would've identified the company's urgency in completing such a transaction and understood why the redemption price was higher than the issuing price. These ultimately would become harbingers for what turned out to be a horrible de-SPACing process.

3) Doubling Down

The most expensive mistake I made in my OppFi experience was doubling down after the company had shed 30-40% off their share price. Curiously, the company's shares ripped back up to $10 nearly a month or two following the de-SPAC process, giving me (and perhaps other investors) false hope in OppFi's resilience amidst a SPAC downturn. The unfortunate reality is that OppFi was coming off of a record year and was unlikely to repeat the success found in '19-'20. On top of that, the management team was revealed to be unprepared for the reporting cadence of public markets, cycling through two CEOs within 6 months of the de-SPAC process. Regardless, I rationalized my investment, believing that the price of the company was ultimately driving the narrative, as opposed to the other way around. The reality was that OppFi was overvalued and the company failed to meet specific operational targets - a deadly sin in the world of public markets.

All in all, I still own a small sliver of OppFi, but aim to dump those shares as soon as they're eligible for long-term losses. I have no hard feelings towards anyone on the OppFi team, nor anyone from FG Financial Group (the sponsor). To those still invested, or who wish to invest, I bid you luck and hope you can avoid some of the same mistakes that I did. Happy investing!

Hey everyone - I wanted to share some thoughts on Palantir, a name I've been invested in since the IPO. The company was one of the hottest listings in 2020, got caught up in the meme stock frenzy in 2021, and now sits slightly above offering price in 2022. Keep note that I am a Palantir shareholder, am subject to bias, and am not publishing this with any recommendations to buy nor sell.

Palantir $PLTR reported quarterly earnings earlier this month, August 8th, delivering 26% top line YoY growth and EPS of -0.01/share. Shares sold off steeply during the session as investors were clearly disappointed by decelerating growth (Prev. guidance was 30% annually) and an even softer guide into the back end of the year. As I write this, shares are trading just above IPO price, nearly 80% down from highs in 2021. As a shareholder, I am growing concerned about the original thesis on Palantir, which can be dumbed down to a few bullets:

H/T: Christopher Wan

Given that M&A has seemed to dominate most of the private market activity in 2022, I thought I'd posit this question to the broader Commonstock Universe:

If you could orchestrate a merger between two companies, or the acquisition of one company from another, assuming there are no legal, regulatory, or anti-trust constraints - who would you choose and why?

Personally, I'd like to see $HOOD be acquired by another broker or integrated financial services firm, perhaps someone like $PYPL or $SQ. While the retail trading frenzy has simmered from Q1 '21, I see Robinhood's UI/UX as superior to other trading platforms and a complementary offering found in competing fintechs like $SOFI & $MS (Morgan Stanley/Ameritrade overlap). On the other hand, I can see brokers today acquihiring Robinhood's engineers, or even using Robinhood as a go-to market vector for younger demographics, should they purchase the company. I have no stake in Robinhood today, nor am I a user anymore. However, I, and so many people I know, have begun their investing journey on Robinhood thanks to their ease of onboarding and use.

What do you think? $MNA $ARB