Thread by @pbcinc

$CDON FY 2020 thread.

1) TL:DR: Extremely early days. The budding 3P marketplace is growing like weed > 80%. Management understands the opportunity and, more importantly, what needs to be done to make it. The selloff was a great entry opportunity for those who paid attention.

2) 3P marketplace growth >80% is a very strong performance, doubling the market growth rates. What is even more important at this stage is to answer the question, does management understand the opportunity and can be trusted in its capital allocation. With a high-quality business

3) Such as a Marketplace, the true value of the asset will reveal itself further down the line, making the residual the true source of valuation but only IF management can allocate capital into opportunities that will generate future growth.

4) Investors are very early to $CDON (luckily). Management is still actually building the engines of this Boeing 777X, while flying 10K feet high, at .8 Mach. This Q the company launched a renewed platform and has yet to build some of the basic services other marketplaces earn

5) significant earning stream off. Despite that, 3P GMV soared 86%, and adjusted EBITDA exploded 125% higher. Active merchants ⬆️ 46% and active customers ⬆️ 27%, even in the face of covid supply line merchants difficulties and mid-Q platform change. Extremely strong results.

6) Remember take rate should raise to ~15% and in the Nordic regions, Marketplaces share is about half that of Europe. Very long backwinds with this one.

7) 10% of ALL Nordic population used the marketplace, so discovery is not an issue. The REAL issue is will $CDON management make the marketplace experience such a delightful experience to the end-user or not. Management convos and the call confirm that

8) Management is laser-focused on investing resources into building all the capabilities necessary to develop a powerhouse Nordic leading Marketplace, an irreplaceable part of any retail faced business marketing plan, as occurs elsewhere.

9) Amazon launch has been a boon, with more and more merchants now having to think about using a marketplace for the first time. $CDON is not only a cheaper option, it's not competing against its merchants, provides data, support, and locality (not a german business).

10) The volatility in share price seems to stem from some analysts modeling 100%+ growth rate they (not the company) issued. Intelligent investors stepped into the breach and used the great prices. It is still rather undervalued, we think.

11) This is the beginning of a very long journey. Marketplaces are some of the very best assets to own out there, and when bought early enough will reward you with untold riches. It will be a very bumpy ride, though, so be forewarned.

12) There is still risk. We need to see management complete the "build" phase, and make sure they use gross profit well to increase the value of the business. When this risk is gone, we will be looking at 2 or 3 times the current valuation.

13) We are long and getting longer. This is not a rec.

Good luck.