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No. of Recommendations: 11
Hi Brittlerock

Just coming back to your Magnite question, ok here goes.

Whilst I love the space and was happy to hold Magnite after making a good return and still see it as relatively lower valued than alternative Ad-tech plays with head room to grow and see them becoming the defacto leader of their side of the coin...

1) Their organic growth rate has fallen to the 20-30% range (whilst TTD is accelerating back to 40-50% growth range)

2) I don't see them as well positioned or equipped to deal with disruptions from Google, Apple etc as TTD

3) They are a recurring acquisition vehicle which is starting to feel like a substitute for organic growth and which also holds execution risk

4) There were other companies I wanted to add to that were growing much faster with stronger conviction (Fivrr, Upstart, Zoom info and Snowflake)

So no massive red flags but all in all given I don't have fresh capital to deploy, it had to go.

Hope that helps.

Cheers
Ant
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No. of Recommendations: 1
Hi Ant,
Thanks for your writeup. I particularly like your look at Penetration vs. TAM. I was wondering how to calculated penetration for MELI. I think that the e-commerce vs. retail penetration would be straightforward, but how do you calculate Fintech penetration vs. TAM?

Thanks.

Best,

bulwnkl
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No. of Recommendations: 1
Hi Bulwnkl

The take rate of ecommerce includes fintech payments revenues and so I included that side of MELI within the ecommerce related TAM but to get the TAM for the Mercadolibre online banking/wealth management solutions I estimated the TAM associated with consumer banking in South America (not a very scientific estimate).

Of all the numbers in the table that one is probably the most under-estimated - the TAM could be 2-3x the number I estimated which would put the penetration rate back to low single digits and make sense.

(TTD is possibly the most over-estimated but has the least significance - if you only took 1/10th of the TAM given then it is still only reaches a penetration rate of 1% giving a massive runway ahead).

BTW one additional purchase I made but did not note down at the end of last month was Zoom Info. I will be sure to update this in the next monthly review when I hope to add more colour with the results commentary.

Ant
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No. of Recommendations: 3
Ant,
Curious to understand that you sold MGNI yet hold 8.5% TTD. Seems to me like they're sort of like two sides of the same coin. I would like to understand your thoughts behind the sale of MGNI. What is it that turned you off on this company? I recently watched this interview and feel even more convinced that this is a premier investment opportunity, Laura Martin of Needham w/ Magnite CEO Michael Barret: https://wsw.com/webcast/needham103/mgni/2238594
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No. of Recommendations: 11
Hi Brittlerock

Just coming back to your Magnite question, ok here goes.

Whilst I love the space and was happy to hold Magnite after making a good return and still see it as relatively lower valued than alternative Ad-tech plays with head room to grow and see them becoming the defacto leader of their side of the coin...

1) Their organic growth rate has fallen to the 20-30% range (whilst TTD is accelerating back to 40-50% growth range)

2) I don't see them as well positioned or equipped to deal with disruptions from Google, Apple etc as TTD

3) They are a recurring acquisition vehicle which is starting to feel like a substitute for organic growth and which also holds execution risk

4) There were other companies I wanted to add to that were growing much faster with stronger conviction (Fivrr, Upstart, Zoom info and Snowflake)

So no massive red flags but all in all given I don't have fresh capital to deploy, it had to go.

Hope that helps.

Cheers
Ant
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No. of Recommendations: 20
Whilst I love the space and was happy to hold Magnite (but)...

1) Their organic growth rate has fallen...

4) There were other companies I wanted to add to that were growing much faster with stronger conviction (Fivrr, Upstart, ZoomInfo and Snowflake)

So no massive red flags but all in all given I don't have fresh capital to deploy, it had to go.

Hope that helps. Cheers, Ant



Hi Ant, that is just exactly the kind of decision I have to make on a regular basis. You expressed it wonderfully. I agree completely (although I never had Magnite and am not currently interested in Fivrr). I did that ("it has to go") with a number of companies a couple of weeks ago.

Saul
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No. of Recommendations: 1
Hi,

Thanks for the info and for sharing it.

Quick questions:
- When did you get EXPI for $13 - $14? (giving those amounts based on the return of 50% you mentioned you have gotten thus far).
- Why are you still holding it? It has lost 66% of its value since Feb.

Thanks!
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