Buy or Sell? Some Quick Picks

I had a great conversation recently with some friends about our views on a range of public and private companies. I have written up some quick thoughts below.

Public: Amazon, Apple, Facebook, Google, Netflix,
Snap, Twitter

Private: Airbnb, Allbirds, DoorDash, Harry’s, Juul, Oscar, Uber

Public

Amazon – Buy

Proven ability to expand into adjacencies, growing negotiating power with vendors, runway with B2B physical goods (i.e. restaurant wholesale)

Apple – Sell

Unit ASP feels pushed to its ceiling and ARPU growth is dependent on a cloud services and media content strategy which doesn’t feel particularly compelling vs. other players e.g. Google, Netflix

Facebook – Buy

Recent controversies do not affect everyday users and, if anything, make the price more attractive; remains de facto social network and their ad machine continues cranking

Google – Buy

De facto monopoly on search that doesn’t feel threatened by regulation; gaining traction with hardware (mobile, voice) and associated software services

Netflix – Buy

Impressed by its investment in original content worldwide which I believe will provide long term advantage over studios and other competitors (Apple, Disney); steady subscriber growth at scale

Twitter – Sell

Combination of falling MAU and rising revenue is changing the story, but not convinced that long term value is there in terms of building a differentiated ads platform vs. Instagram vs. WhatsApp

Snap – Sell

Have been bearish ever since IPO due to lack of moat; over this last year, product quality feels like it has been dropping; anecdotally, most friends have shifted over to Instagram stories

Private

Airbnb – Buy

Recent announcement of Year 2 of EBITDA profitability is stellar; see huge room to grow on consumer side with rise of tailored travel experiences ala Sojern and on B2B side with vetted rooms / apartments

Allbirds – Sell

This business will do well, but it would not be my first choice due to 1) relatively low purchase value 2) no recurring aspect 3) popularity of their shoes feels like a trend that will soon pass

DoorDash – Buy

Food delivery is fragmented today, so there will likely be some consolidation (proposed merger with Postmates) but does not seem winner takes all; Uber has the upper hand with driver base but DoorDash owns relationships with several major chains

Harry’s – Buy

Incredibly ambitious founders and proven ability to execute (Jeff at Warby); expanding to adjacent markets feels simpler due to the nature of the shaving / skincare category

Oscar – Buy

Finding its footing after missteps early on (pulling out of NJ and TX in 2016); addition of business insurance is a big plus and believe it will be a better, more certain path to growth for them  

Uber – Buy

Best positioned to own the largest slice of the future of mobility (cars, scooters, bikes, VTOL) if they execute as they should; being on the consumer’s homescreen already is an enormous advantage

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