Internet leader at a bargain price

15 August 2024

The company featured in this report has pulled off what most other Internet companies can only dream of:

• Its name has literally defined its own category.
• Over 80% of its web traffic is organic or direct.
• Its revenue per employee is nearly 3x that of its peer average.

However, it has hit a weak patch lately:

• After growing 100% in two years, its recent growth has been 0%.
• Corporate behemoths from around the world have tried to take market share.
• Management had gotten a bit carried away with expensive acquisitions, and these had to be wound down.

As a result, its stock is currently down 85%.

Still, there is a lot of inherent strength to the company:

• Highly cash-generative, with 90% of its EBITDA converting to free cash flow.
• Tremendous loyalty among its most important user group.
• The brand remains category-defining.

Right now, the market has lost interest, and barely anyone even pays attention – except one particular investor who has a golden track record in contrarian technology investing. The investor in question recently mopped up shares to become the single-largest shareholder – and bought even more in the days before this report came out!

If you missed buying Meta or Spotify in 2022, this is a similar case to look at.

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