Thread/
What would you pay (market value) for this company? I’ll reveal the company later in the thread.
- Strong network effects, pricing power & a long runway for growth.
- Powerful IP that could be monetised in many different ways…
What would you pay (market value) for this company? I’ll reveal the company later in the thread.
- Strong network effects, pricing power & a long runway for growth.
- Powerful IP that could be monetised in many different ways…
1/
- Loyal user base/fans. High retention rate and improving.
- $1.3 billion in sales, $606 million EBITDA. 47% EBITDA margins in FY21.
- FY21 revenue growth of 42% YoY.
- EBITDA has doubled over the past two years. ~41.5% CAGR….
- Loyal user base/fans. High retention rate and improving.
- $1.3 billion in sales, $606 million EBITDA. 47% EBITDA margins in FY21.
- FY21 revenue growth of 42% YoY.
- EBITDA has doubled over the past two years. ~41.5% CAGR….
2/
I’ll continue the thread after this tweet, but comment your guess below.
With limited information provided, I’d suggest any high quality US company with 47% EBITDA margins and a 41.5% CAGR would earn at least a 20x EBITDA multiple, probably much higher.
Reveal next tweet.
I’ll continue the thread after this tweet, but comment your guess below.
With limited information provided, I’d suggest any high quality US company with 47% EBITDA margins and a 41.5% CAGR would earn at least a 20x EBITDA multiple, probably much higher.
Reveal next tweet.
3/
The business is Wizards of the Coast (WOTC) which is an operating business within $HAS.
Hasbro is typically known as a legacy, slow growth toy/games company. But hidden within is a much more appealing business.
WOTC are known for Magic the Gathering & Dungeons and Dragons
The business is Wizards of the Coast (WOTC) which is an operating business within $HAS.
Hasbro is typically known as a legacy, slow growth toy/games company. But hidden within is a much more appealing business.
WOTC are known for Magic the Gathering & Dungeons and Dragons
4/
After reading the description of WOTC above you may have applied a fair market value.
A 20x multiple would have suggested a $12.1 billion valuation. Which I would argue is about fair, maybe even conservative.
After reading the description of WOTC above you may have applied a fair market value.
A 20x multiple would have suggested a $12.1 billion valuation. Which I would argue is about fair, maybe even conservative.
5/
However, the total market cap for $HAS is $13.5 billion.
That 20x EBITDA multiple for WOTC suggests that the remainco consumer products division that Hasbro is famous for is worth just $1.4 billion.
WOTC contributes ~50% of total EBITDA.
However, the total market cap for $HAS is $13.5 billion.
That 20x EBITDA multiple for WOTC suggests that the remainco consumer products division that Hasbro is famous for is worth just $1.4 billion.
WOTC contributes ~50% of total EBITDA.
6/
$HAS has come onto my radar after @AltaFoxCapital took an activist role trying to replace the board with 5 new candidates.
They even created an entire website dedicated to the cause including a 100-page investor presentation.
‘Free the Wizards’
freethewizards.com
$HAS has come onto my radar after @AltaFoxCapital took an activist role trying to replace the board with 5 new candidates.
They even created an entire website dedicated to the cause including a 100-page investor presentation.
‘Free the Wizards’
freethewizards.com
7/
@AltaFoxCapital believes Hasbro should pursue a tax-free spin-off of WOTC which will maximize shareholder value, lead to improvements in capital allocation at both WOTC and the remaining company.
They expect the spin-off to result in 100% upside over three years.
@AltaFoxCapital believes Hasbro should pursue a tax-free spin-off of WOTC which will maximize shareholder value, lead to improvements in capital allocation at both WOTC and the remaining company.
They expect the spin-off to result in 100% upside over three years.
8/
If you are interested, the entire @AltaFoxCapital thesis for $HAS can be found on the website linked above.
Conor Haley is probably my favourite investor to follow. The research put out by Alta Fox is amazing.
$HAS is now a name I’ll be following closely.
If you are interested, the entire @AltaFoxCapital thesis for $HAS can be found on the website linked above.
Conor Haley is probably my favourite investor to follow. The research put out by Alta Fox is amazing.
$HAS is now a name I’ll be following closely.
• • •
Missing some Tweet in this thread? You can try to
force a refresh
