1/ $OSTK - interesting to see Piper call it out as the most mispriced stock in their coverage universe. Front page of note:
They see tZero as worth $500m-740m (vs mkt cap $3.1bn) and see GSA-related revs as contributing 15-25% to total sales over time.
They see tZero as worth $500m-740m (vs mkt cap $3.1bn) and see GSA-related revs as contributing 15-25% to total sales over time.
2/ I didn't know that only $OSTK, $AMZN and $TMO won the GSA RFP process out of 15 applicants with $OSTK's best-in-class security commended by the GSA diligence committee, who went through an extensive 18m diligence process.
3/ Piper think this win could make $OSTK an acquisition target for other large box retailers that did not get selected as part of the GSA process. Contract began with 5 federal agencies to buy up to $6bn in annual purchases over 3 years.
4/ It has since expanded to 8 agencies, went live in Aug 2020 but ramp-up was slower than expected likely due to WFM dynamics across federal agencies (which gives $OSTK a helpful re-opening tailwind to help offset headwind to core business from re-opening).
5/ They note over 50% discount valuation vs Wayfair ($W) and note you are effectively getting upside optionality to tZero and GSA contract for free at this valuation.
Here's their valuation approach for tZero:
Here's their valuation approach for tZero:
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