14 Trusted Websites to Make Money – $100 a Day Online ( 2020 )

This is my first DD post on any company, be gentle.
Disclaimer: I am long RKT. This is not financial advice, and I am not receiving any compensation whatsoever from anyone for this post. I’m not a professional, I’m not even an amateur, this is a Wendy’s.
Sources used: RKT investor relations website and company website, RKT earnings transcripts, SEC fillings, the SEC EDGAR database, sea king al pha, whalewisdom, finbox, yahoo finance, stockcharts, openinsider, Zacks, google sheets.

Summary
Rocket Companies (RKT) is a fintech company that operates several brands including the flagship Rocket Mortgage. I think RKT presents an opportunity to buy serious value at a cheap price, because the market has not priced in the underlying fact that RKT is a tech company akin to Square, Paypal, etc.

RKT has disrupted the lending industry and has embraced a fully digital ecosystem, which will continue to drive customer acquisition and retention in the future
RKT spends considerable money and resources on UX/UI development, client experience, and marketing. This will also help drive their continued expansion into the lending market.
The RKT “ecosystem” provides a “full cycle” solution for everything related to real estate transactions and insurance. They serve real estate professionals looking to generate leads, develop those leads, better serve their clients, and make every stage of real estate transactions smoother. From the client side, they similarly just make everything easier - it’s an app, it’s online, it’s doable from home and it’s not complicated. There’s an inherent advantage in what they’re doing here because closing on real estate transactions has always been something that’s complex, unpleasant, expensive, and not well understood. You need lawyers, you need agents, there’s a ton of paperwork, it sucks. RKT is changing all of that.
RKTs balance sheet, income, and liabilities support a stock price several times higher than the current one in my opinion.
RKT is currently stagnant in price, and the market appears to be pricing it like a traditional mortgage company, not a rapidly growing tech company (which they are).
RKT has been around for decades (skips the startup costs that will provide barrier to entry for newer companies looking to do what they’re doing), but somehow seems to still be leading the tech charge in the industry. That’s a unique and potent combination in my opinion.
RKT needs a catalyst to get the market to value it as a tech company instead of a lending company. Once that happens, and I expect it to sometime within the next year, RKT should approach an appropriate valuation such as 20x earnings. That’s an estimate I pulled out of nowhere, but is commensurate with the low end of P/E ratios for companies I see as similar to RKT.

Key Point - RKT is Priced Like a Legacy Mortgage Company
The average estimate for 2020 year end revenue is $15 billion, and the yearly earnings estimate average is $3.85 per share.
This estimate gives a ttm P/E ratio of just over 5.5. The sector median is something like 8-12, which makes RKT cheaply valued relative to the earnings it produces, even compared to the financial/mortgage sector. What’s key here is, I don’t think that’s really an appropriate comparison. I would place them more in line with companies like Square (ttm P/E ratio of 325x lol), PayPal (ttm P/E ratio of 69x, nice), or Fiserv (ttm P/E ratio of 24x). I used Zacks for all of these P/E ratio lookups.
Let’s assume RKT is conservatively worth 15x earnings, and that it hits the estimate of $3.85 eps. That would put its fair value right now at $57.75 per share. I think it’s worth more than that but, we all should do well to remember that it’s really only worth whatever the market will pay for it.
Key Point - Catalysts
This thing needs a catalyst. Right now I am loading up. I’m buying shares, I’m selling SHORT TERM covered calls to reduce basis on those shares, but I will be stopping the sale of those covered calls within a couple weeks most likely. The Q4 earnings announcement will be on 2/25. I am not sure that the actual earnings numbers will be enough to wake this thing up, although I expect them to be good. But if that announcement comes with discussion of their focus for 2021 and beyond, and gets the market thinking about them as a tech company first and mortgage lending company second, things will start to heat up. I don’t know when the real catalyst will hit that triggers the run-up, but I think it could start with the Q4 earnings call. I am looking at $21 as the floor for this stock, and I expect the price to double within a year. I will be acquiring OTM LEAPs, expiring next spring.
Supporting information and background follows.
The Business
RKT is in the business of providing solutions to financial transactions, including mortgage origination and refinancing, auto lending, and more. Specific subsidiaries and my simplistic view of how they interact:
Home Financing

Rocket Mortgage - The mortgage company. This is a prominent “public facing” part of the Rocket ecosystem.
Amrock - Amrock provides title insurance, property valuations, and other solutions. I see this as “supporting infrastructure” to keep clients within the rocket ecosystem where they would otherwise need to go elsewhere and is part of what makes RKT a one-stop-shop.
Amrock Title Insurance (ATI) Company - basically does underwriting for Amrock. The “business end” in my simple understanding of the world.
Nexsys - provides a streamlined approach to the closing process with their Clear Sign and Clear HOI technologies - taking care of closing day authentications and sharing of homeowners insurance information.
Lendesk - Lendesk specifically provides solutions for the mortgage market in Canada
Edison Financial - Basically the “front end” of Lendesk that Canadian clients would interact with.

Home Sale and Search

Rocket Homes - Rocket Homes is a proprietary home search platform and real estate agent referral network. Basically this matches buyers, sellers, and agents, and is a key aspect of keeping clients completely working within RKT for all aspects of real estate buying/selling/financing.
For Sale By Owner - A digital marketplace designed to let clients buy and sell real estate on their own. I think it’s absolutely brilliant that RKT owns this, but more on that later.

Auto & Personal Financing

Rocket Auto - Supports rental and online car purchasing platforms.
Rocket Loans - online personal loan solutions for clients.

Media

Core Digital Media - a major advertiser in the mortgage, financial, insurance, and education sectors.
Lower My Bills - this company is basically a “portal” business model that connects people with providers of various loan and insurance products.

Services & Technology Development

Rock Connections - Basically a sales and support platform that handles appointments, prequalifications, generating leads, and data analysis among other things.
Rock Central - I will generalize this as “business support”. HR, administration, etc.
Rocket Innovation Studio - A tech incubator to gather and engage top talent and ideas.

Recent Acquisitions
RKT, through Lendesk, acquired Finmo back in October of 2020 (https://finance.yahoo.com/news/rocket-companies-subsidiary-acquires-fast-182042594.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAALnvnNBoglSnmMP0O61AqgXBJokNS53LjJYuG3NvYKhayp4I6ZH2RpfmFUbSsCAU4xmnBNGMTwiEG-Ly29EabVy1-OjPIGfkYoQ3389gn3Edebs9sIwWOy1tPzqjRwOwwGA_PWg0cNzEFCe7HBTilMwADUT_y0QxWw8vizWecGcv) Finmo is a rapidly growing Canadian digital mortgage platform and this acquisition I think was perfect - it shows RKTs dedication to embracing a fully digital experience, and making sure they’re the ones leading that charge.
Management
I do not have much to say here, aside from this. The RKT team is not the new kids on the block, they have decades of industry experience. Also, I value leaders that make people feel valued. And on that note, under CEO Jay Farner Quicken Loans has been in the top 30 of Fortune’s “100 Best Companies to Work For” list for 17 consecutive years.
Financials and Growth
When it comes to the numbers, RKT is killing it. I don’t want to just spout a bunch of numbers that anyone can easily go look up so here’s a couple that stood out to me from the Q3 earnings announcement and related data:
$4.63 billion in revenue, which is 163% YoY growth.
From that revenue, they beat EPS estimates with $1.21 for the quarter vs $1.09 expected.
Net income was $2.4 billion which represents a YoY growth of 365%.
Closed loan volume YoY growth was 122% to $89B.
Net rate lock volume was $94.7 Billion (101% growth).
RKT has brought in $13.1 billion in revenue in the first 3 quarters and seems to be on track to close out Q4 with yearly revs above $15 billion.
That’s awesome but what I really like is that they pair this amazing growth with $3.5B cash on hand. That’s great because I want them to be able to scale as they grow, and make acquisitions as needed (see Finmo) to ensure they can keep that growth going without getting overextended and failing to capitalize.
RKTs ability to recapture clients is one of the keys to their future success in my uneducated opinion. Their recapture rate is 4.6x the industry average. The Q3 earnings transcript includes a statement by the CEO on how when interest rates fall, retention rate falls, refinance activity is larger. The high recapture rate RKT has serves as a natural hedge to their retention of existing clients because their recapture is so much higher than average in the industry.
Quick aside - RKT announced a $1 billion share buyback program. They’ll be able to repurchase shares from time to time starting Nov10 2020, ending in two years. I don’t love the idea of share buybacks because I think this can be detrimental to actual business growth for the sake of shareholder value. However, with the large cash position RKT has (and it doubled from December 2019 to September 2020) I think this is a reasonable way to deploy some of that cash for now.
Ok so what about valuation using DCF, free cash flow analysis, something like that? Honestly I’m not convinced this is as useful as some people make it out to be. It’s nice to know what the numbers indicate, but I don’t spend a lot of time worrying about an exact price target based on anything like this. That said, you can crunch the numbers yourself or check out something like the Finbox resources:
https://finbox.com/NYSE:RKT/models/dcf-growth-exit-5yr
I don’t believe that fair value estimate for an instant, but it's a part of the puzzle to consider. Finbox has various models you can check out, but it’s also just a nice place to view aggregate data other than directly from the SEC filings.
Product Channels
RKTs direct-to-consumer channel is their main source of revenue right now, but I think they will be successful in their efforts to grow their partner channels as well. Why do I say that? Numbers don’t lie:

Direct-to-consumer Q3 growth: 131% YoY ($53.5B closed loan volume)
Partner Network growth 127% YoY ($29.6B closed volume)
- Adjusted Revenue for Partner Network is up 502% YTD vs 2019 ( see Q3 earnings transcript)

The partner network volume is a little over half of the direct-to-consumer volume but the growth rate is just so damn juicy. That revenue growth is hellathicc.
Current Market and outlook
Right now, rates are low. The average 30-yr mortgage fixed rate is 2.92% (https://www.cnbc.com/2021/02/03/mortgage-refinancing-surges-but-high-home-prices-stop-buyers.html)
I cannot say how long interest rates will remain low but I believe RKT is positioned to continue to grow regardless of what rates do moving forward. They just cover so much of the space, and they do it with a focus on applied technology.
Here’s some blatant speculation. I think as we move into 2021 and the vaccine becomes more prevalent, millennials will buy, sell, and borrow against real estate with renewed intensity. I think RKT is uniquely positioned to capture that market.
Positions: RKT shares. Cost basis of $21.14.

My expat fatFIRE journey abroad (long)

I am 32/Canadian and had a very high paying career that had a short shelf life. During my high producing years I wanted to move out of Canada to another country where I could save as much as I could for my future because I knew my income would not last forever.
"Abroad" was a weird term form me. Despite being Canadian and having lived most of my adult years in Canada I felt like everywhere was abroad for me.
I was born in one of the poorest countries of Europe and lived there until I was 17 years old. The country has come a long way today but when I go back I never fit in. I definitely feel more connected with Canada than the country I was born in.
I think a big reason why I focused so hard on work was to never get back to the level of poverty I grew up as a child. Think of North Korea and Venezuela in one combo. In 1997 there was a complete lock down due to civil war and my family was lucky enough to survive because we had a vegetable garden and chickens. If you left your home you could be shot/robbed or worse be killed from stepping on a mine. The city was covered in them.
The other reason was that women got treated like second class citizens where I was born and my childhood was a living hell where I wasn't even allowed to walk on the street alone (even after they took out the mines), talk to members of the opposite sex or have any friends. Dating was not a concept and if they know you are "dating" you have to immediately get engaged and then married and have children or else you are a "whore".
I always had a bubbly personality when I was young, I liked to act, dance, and really liked learning. I was also interested in entrepreneurship and got a full scholarship at York University to study business but to my parents a woman is not suited for business and they pushed me to study molecular biology instead. I hated my University years. I battled depression and never really saw a future for myself with biology.
I ran away from home at 19 and asked my local university what help was there for someone like me that wanted to start a business. To my surprise they were very helpful and told me about grants and loans I could apply to get started. My first business was face painting and entertainment for children's birthday parties and events. I remember I got a $5000 loan and it seemed like so much money at the time. It helped me buy my first car and get started. I grew my business from just me to having 10 employees, having permanent booths in theme parks and festivals in Canada. It was hard work but I loved it. During the time I was still in university and most of my work was summeweekends so it worked out ok.
I remember I was growing more and more fed up with my studies and walked out of my last exam with a smile feeling absolute freedom. I never finished my degree and I was so ok with it even if I was one exam away from graduation. I didn't care about the crazy amounts of student loans I had accumulated. All I wanted was to grow my business and make money. It gave me that thrill that sitting in a lab using a microscope never did.
One day I became curious about online streaming and after having a few drinks with a friend I made an application on a popular site (at the time). The site was more like webcamming but you were allowed to do whatever you wanted on cam as long as there was no guys.
I didn't think much of it because I was doing well with my other business. At the time I had a rocky relationship with an ex bf and decided maybe going online and flirting with men would make me feel better about my break up. Then saw this email about the site I had previously applied had accepted my application.
I did my first stream completely clothed, having fun and chatting with people. I made $4.00 usd which was shit but I had so much fun doing it so I started researching the industry more. After a few more streams I decided this had a potential to be something big and I decided to make a business plan and focus on it entirely. I was constantly doing 10-12h on cam and loved to come up with new creative ideas to entertain people.
I went from making $4.00 my first day to making just shy off a million dollars a year. The money was not the focus but being the best at what I did was.
During my high earning years I knew I had to save and plan for my future. Most of the other performers would have one good month making $150,000 then disappear and not be relevant again. I don't know how I managed to last in the industry for over 8 years, but I am greatful that my hard work was combined with luck and being at the right place/right time.
I moved to Mexico when I was 26 years old.
My life in Mexico was great the first two years. I was dating someone that was super supportive with my work schedule. It was the honeymoon phase. We would always eat out and enjoy nice places and expensive travel. I was always frugal with everything else but vacations and experiences. Looking back my mistake was that I paid for everything and my bf at the time felt used to this cushy life that ended up expecting it. He was bad with managing money too and had a lot of debt which stupiditly I ended up paying off.
During this time I had bought various income properties in central Mexico (in a retirement village) and the agreement was that since I was making more money with my online business which required long hours on cam, my ex was supposed to take care of property management. At first he was engaged then ended up not so pationate about it. I felt used and underappreciated.
When I realized all this I was pregnant with our child. He told me he was unhappy living in a retirement village and wanted to move to a bigger city in Mexico. I told him we could try it out because it would offer more opportunities for our child as well. That's where things went downhill. He constantly ignored me and refused to help with chores in the house. I had a high risk pregnacy so I couldn't do much myself either.
After a few months he ended up cheating and experienced a mental break down, trying to commit suicide. I was crushed. I didn't know what happened and despite my efforts to send him to get the best medical help in the country he never was the same. I really wanted to help him get back on his feet again because I thought we were a team for life. I was wrong.
He ended up leaving the country one day when my son was only a few months old and has not been back in over 3 years. I have never heard back from him and I don't know if he's dead or alive.
I was crushed and myself experienced a complete burn out from work/personal loss at the time. Physically I became ill too and dropped down up 42 kg. I knew I had to do something about it because I had a son to take care of.
Looking back at it now it was an amazing opportunity for me to realize there was more to life than work. It helped me realize that I should have not provided everything just because I loved someone but let them provide and create on their own. If they refused I had to know they were using me as a wallet and to not get involved.
RETIREMENT
It's been one full year since I have been completely off work. It happened in 2020 out of all years. Before I tried to work on and off but my love for my job wasn't the same.
I can say I feel much less stressed than I did years ago. My health is better and my sleep schedule is so much better than it was before.
For the first time I now feel more Integrated in Mexico and I don't think I am missing out much not living in Canada.
Where I live it's safe, it has a high quality of life and there's a lot of international business around. Not that I want to open a new business here but I think it's important to be surrounded by other people that have seen more of the world and are also successful.
On top of that I have always felt like a hybrid of many cultures and being surrounded by people that have moved around the world means that we get to be hybrids together and they understand me better than say someone that lived in Canada/USA all their lives and never left the country.
Mexico has many bad things as well but no county is perfect. Choosing the right location to live in Mexico is very important to not be affected a lot by the bad things.
The pace of life is also much more calmer than in Canada and the US. This can be bad if you want to start a business here but it's a good place to be during retirement.
Also people are a lot less "offended" from things and I find it's easier to make friends than it was in Canada. My general perception of Canada was that people in Canada are very helpful to strangers but much colder if you want to have a meaningful friendship. Of course there are exceptions but that was my experience.
One thing I did not like about the western culture is the victim mentality that the youth of today are embracing. If they can't get something they usually blame the government for not doing enough for them.
Some women blame men for "the patriarchy" and some Canadians blame foreigners because 'they took away their cheap homes and they can't afford real estate'
Having lived in a real "shit hole" country where women get treated like crap I want to remind you that Canada and the US are the land of opportunities compared to most of the world.
Success is not guaranteed for anyone but all the information is free in English for you to look up and use it to your advantage. You don't even have to learn a second language to access it.
Being a woman or a minority gives you the same legal rights as everyone else if not more sometimes. I don't think most western feminists know what it's like to live in a muslim country.
My point is: Westerners are not grateful enough for what they have.
Complaining is human nature so of course it happens in Mexico but the majority know that their government won't do shit for them and they focus on what they can do as an individual. This can be bad too wich is reflected in the general sentiment Mexicans have for public property but that's another problem I won't get into.
Overall i am happy where I have come in my journey. I know I haven't got it all figured out despite having a 4.5 million net worth I don't feel complete being 100% retired.
I am currently building real estate in Mexico, investing in stocks and excercising to keep me busy.
After things open up I will travel more but the urge to have everything figured out which I experienced immediately once I stopped working is less.
Also: It's lonely at the top:
I like to think of myself as an easy and approachable person, however I think having a different upbringing and dedicating and reaching high levels of financial success at a very young age, makes relating to most people not as easy. I think humans form stronger bonds when they share and solve similar problems together. That's why I lurk in this forum from time to time. It makes me realize at the end of the day I'm not alone.
A lot of the questions that get asked here on a daily basis are questions that I ask myself all the time.
The funny part is that no one has the answers, I don't either and the more I live the more I realize that the answers don't matter.
The only realisation I have so far is:
The key to being rich is living in the moment, enjoying the company of your loved ones and being greatful for what you have.
Don't let your brain trick you into overthinking and stay away from the compulsion to use fatFIRE calculators all the time.
Just get out for a walk instead and leave your phone at home. We could be hit by a car tomorrow and none of that shit matters as much as you think.
Edit: since many have asked the country was Albania. I responded here how I ended up in Canada:
https://www.reddit.com/fatFIRE/comments/lh30x8/my_expat_fatfire_journey_abroad_long/gmwn401?utm_medium=android_app&utm_source=share&context=3

Rocket Companies (RKT) DD - An Undervalued Gem

Disclaimer: I am long RKT. This is not financial advice, and I am not receiving any compensation whatsoever from anyone for this post. I’m not a professional, I’m not even an amateur, this is a Wendy’s.
Sources used: RKT investor relations website and company website, RKT earnings transcripts, SEC fillings, the SEC EDGAR database, sea king al pha, whalewisdom, finbox, yahoo finance, stockcharts, openinsider, Zacks, google sheets.
Summary
Rocket Companies (RKT) is a fintech company that operates several brands including the flagship Rocket Mortgage. I think RKT presents an opportunity to buy serious value at a cheap price, because the market has not priced in the underlying fact that RKT is a tech company akin to Square, Paypal, etc.

RKT has disrupted the lending industry and has embraced a fully digital ecosystem, which will continue to drive customer acquisition and retention in the future
RKT spends considerable money and resources on UX/UI development, client experience, and marketing. This will also help drive their continued expansion into the lending market.
The RKT “ecosystem” provides a “full cycle” solution for everything related to real estate transactions and insurance. They serve real estate professionals looking to generate leads, develop those leads, better serve their clients, and make every stage of real estate transactions smoother. From the client side, they similarly just make everything easier - it’s an app, it’s online, it’s doable from home and it’s not complicated. There’s an inherent advantage in what they’re doing here because closing on real estate transactions has always been something that’s complex, unpleasant, expensive, and not well understood. You need lawyers, you need agents, there’s a ton of paperwork, it sucks. RKT is changing all of that.
RKTs balance sheet, income, and liabilities support a stock price several times higher than the current one in my opinion.
RKT is currently stagnant in price, and the market appears to be pricing it like a traditional mortgage company, not a rapidly growing tech company (which they are).
RKT has been around for decades (skips the startup costs that will provide barrier to entry for newer companies looking to do what they’re doing), but somehow seems to still be leading the tech charge in the industry. That’s a unique and potent combination in my opinion.
RKT needs a catalyst to get the market to value it as a tech company instead of a lending company. Once that happens, and I expect it to sometime within the next year, RKT should approach an appropriate valuation such as 20x earnings. That’s an estimate I pulled out of nowhere, but is commensurate with the low end of P/E ratios for companies I see as similar to RKT.

Key Point - RKT is Priced Like a Legacy Mortgage Company
The average estimate for 2020 year end revenue is $15 billion, and the yearly earnings estimate average is $3.85 per share.
This estimate gives a forward-looking P/E ratio of just over 5.5. The sector median is something like 8-12, which makes RKT cheaply valued relative to the earnings it produces, even compared to the financial/mortgage sector. What’s key here is, I don’t think that’s really an appropriate comparison. I would place them more in line with companies like Square (ttm P/E ratio of 325x lol), PayPal (ttm P/E ratio of 69x, nice), or Fiserv (ttm P/E ratio of 24x). I used Zacks for all of these P/E ratio lookups.
Let’s assume RKT is conservatively worth 15x earnings, and that it hits the estimate of $3.85 eps. That would put its fair value right now at $57.75 per share. I think it’s worth more than that but, we all should do well to remember that it’s really only worth whatever the market will pay for it.
Key Point - Catalysts
This thing needs a catalyst. Right now I am loading up. I’m buying shares, I’m selling SHORT TERM covered calls to reduce basis on those shares, but I will be stopping the sale of those covered calls within a couple weeks most likely. The Q4 earnings announcement will be on 2/25. I am not sure that the actual earnings numbers will be enough to wake this thing up, although I expect them to be good. But if that announcement comes with discussion of their focus for 2021 and beyond, and gets the market thinking about them as a tech company first and mortgage lending company second, things will start to heat up. I don’t know when the real catalyst will hit that triggers the run-up, but I think it could start with the Q4 earnings call. I am looking at $21 as the floor for this stock, and I expect the price to double within a year. I will be acquiring OTM LEAPs, expiring next spring.
Supporting information and background follows.
The Business
RKT is in the business of providing solutions to financial transactions, including mortgage origination and refinancing, auto lending, and more. Specific subsidiaries and my simplistic view of how they interact:
Home Financing

Rocket Mortgage - The mortgage company. This is a prominent “public facing” part of the Rocket ecosystem.
Amrock - Amrock provides title insurance, property valuations, and other solutions. I see this as “supporting infrastructure” to keep clients within the rocket ecosystem where they would otherwise need to go elsewhere and is part of what makes RKT a one-stop-shop.
Amrock Title Insurance (ATI) Company - basically does underwriting for Amrock. The “business end” in my simple understanding of the world.
Nexsys - provides a streamlined approach to the closing process with their Clear Sign and Clear HOI technologies - taking care of closing day authentications and sharing of homeowners insurance information.
Lendesk - Lendesk specifically provides solutions for the mortgage market in Canada
Edison Financial - Basically the “front end” of Lendesk that Canadian clients would interact with.

Home Sale and Search

Rocket Homes - Rocket Homes is a proprietary home search platform and real estate agent referral network. Basically this matches buyers, sellers, and agents, and is a key aspect of keeping clients completely working within RKT for all aspects of real estate buying/selling/financing.
For Sale By Owner - A digital marketplace designed to let clients buy and sell real estate on their own. I think it’s absolutely brilliant that RKT owns this, but more on that later.

Auto & Personal Financing

Rocket Auto - Supports rental and online car purchasing platforms.
Rocket Loans - online personal loan solutions for clients.

Media

Core Digital Media - a major advertiser in the mortgage, financial, insurance, and education sectors.
Lower My Bills - this company is basically a “portal” business model that connects people with providers of various loan and insurance products.

Services & Technology Development

Rock Connections - Basically a sales and support platform that handles appointments, prequalifications, generating leads, and data analysis among other things.
Rock Central - I will generalize this as “business support”. HR, administration, etc.
Rocket Innovation Studio - A tech incubator to gather and engage top talent and ideas.

Direct-to-consumer Q3 growth: 131% YoY ($53.5B closed loan volume)
Partner Network growth 127% YoY ($29.6B closed volume)
- Adjusted Revenue for Partner Network is up 502% YTD vs 2019 ( see Q3 earnings transcript)

$RKT DD TO THE MOOOOONNNNN🚀🚀🚀🚀🚀🚀🚀🚀🚀

By petriefly42 This is my first DD post on any company, be gentle.
Disclaimer: I am long RKT. This is not financial advice, and I am not receiving any compensation whatsoever from anyone for this post. I’m not a professional, I’m not even an amateur, this is a Wendy’s.
Sources used: RKT investor relations website and company website, RKT earnings transcripts, SEC fillings, the SEC EDGAR database, sea king al pha, whalewisdom, finbox, yahoo finance, stockcharts, openinsider, Zacks, google sheets.

Summary
Rocket Companies (RKT) is a fintech company that operates several brands including the flagship Rocket Mortgage. I think RKT presents an opportunity to buy serious value at a cheap price, because the market has not priced in the underlying fact that RKT is a tech company akin to Square, Paypal, etc.
RKT has disrupted the lending industry and has embraced a fully digital ecosystem, which will continue to drive customer acquisition and retention in the future RKT spends considerable money and resources on UX/UI development, client experience, and marketing. This will also help drive their continued expansion into the lending market. The RKT “ecosystem” provides a “full cycle” solution for everything related to real estate transactions and insurance. They serve real estate professionals looking to generate leads, develop those leads, better serve their clients, and make every stage of real estate transactions smoother. From the client side, they similarly just make everything easier - it’s an app, it’s online, it’s doable from home and it’s not complicated. There’s an inherent advantage in what they’re doing here because closing on real estate transactions has always been something that’s complex, unpleasant, expensive, and not well understood. You need lawyers, you need agents, there’s a ton of paperwork, it sucks. RKT is changing all of that. RKTs balance sheet, income, and liabilities support a stock price several times higher than the current one in my opinion. RKT is currently stagnant in price, and the market appears to be pricing it like a traditional mortgage company, not a rapidly growing tech company (which they are). RKT has been around for decades (skips the startup costs that will provide barrier to entry for newer companies looking to do what they’re doing), but somehow seems to still be leading the tech charge in the industry. That’s a unique and potent combination in my opinion. RKT needs a catalyst to get the market to value it as a tech company instead of a lending company. Once that happens, and I expect it to sometime within the next year, RKT should approach an appropriate valuation such as 20x earnings. That’s an estimate I pulled out of nowhere, but is commensurate with the low end of P/E ratios for companies I see as similar to RKT. Key Point - RKT is Priced Like a Legacy Mortgage Company
The average estimate for 2020 year end revenue is $15 billion, and the yearly earnings estimate average is $3.85 per share.
This estimate gives a ttm P/E ratio of just over 5.5. The sector median is something like 8-12, which makes RKT cheaply valued relative to the earnings it produces, even compared to the financial/mortgage sector. What’s key here is, I don’t think that’s really an appropriate comparison. I would place them more in line with companies like Square (ttm P/E ratio of 325x lol), PayPal (ttm P/E ratio of 69x, nice), or Fiserv (ttm P/E ratio of 24x). I used Zacks for all of these P/E ratio lookups.
Let’s assume RKT is conservatively worth 15x earnings, and that it hits the estimate of $3.85 eps. That would put its fair value right now at $57.75 per share. I think it’s worth more than that but, we all should do well to remember that it’s really only worth whatever the market will pay for it.
Key Point - Catalysts
This thing needs a catalyst. Right now I am loading up. I’m buying shares, I’m selling SHORT TERM covered calls to reduce basis on those shares, but I will be stopping the sale of those covered calls within a couple weeks most likely. The Q4 earnings announcement will be on 2/25. I am not sure that the actual earnings numbers will be enough to wake this thing up, although I expect them to be good. But if that announcement comes with discussion of their focus for 2021 and beyond, and gets the market thinking about them as a tech company first and mortgage lending company second, things will start to heat up. I don’t know when the real catalyst will hit that triggers the run-up, but I think it could start with the Q4 earnings call. I am looking at $21 as the floor for this stock, and I expect the price to double within a year. I will be acquiring OTM LEAPs, expiring next spring.
Supporting information and background follows.
The Business
RKT is in the business of providing solutions to financial transactions, including mortgage origination and refinancing, auto lending, and more. Specific subsidiaries and my simplistic view of how they interact:
Home Financing
Rocket Mortgage - The mortgage company. This is a prominent “public facing” part of the Rocket ecosystem. Amrock - Amrock provides title insurance, property valuations, and other solutions. I see this as “supporting infrastructure” to keep clients within the rocket ecosystem where they would otherwise need to go elsewhere and is part of what makes RKT a one-stop-shop. Amrock Title Insurance (ATI) Company - basically does underwriting for Amrock. The “business end” in my simple understanding of the world. Nexsys - provides a streamlined approach to the closing process with their Clear Sign and Clear HOI technologies - taking care of closing day authentications and sharing of homeowners insurance information. Lendesk - Lendesk specifically provides solutions for the mortgage market in Canada Edison Financial - Basically the “front end” of Lendesk that Canadian clients would interact with. Home Sale and Search
Rocket Homes - Rocket Homes is a proprietary home search platform and real estate agent referral network. Basically this matches buyers, sellers, and agents, and is a key aspect of keeping clients completely working within RKT for all aspects of real estate buying/selling/financing. For Sale By Owner - A digital marketplace designed to let clients buy and sell real estate on their own. I think it’s absolutely brilliant that RKT owns this, but more on that later. Auto & Personal Financing
Rocket Auto - Supports rental and online car purchasing platforms. Rocket Loans - online personal loan solutions for clients. Media
Core Digital Media - a major advertiser in the mortgage, financial, insurance, and education sectors. Lower My Bills - this company is basically a “portal” business model that connects people with providers of various loan and insurance products. Services & Technology Development
Rock Connections - Basically a sales and support platform that handles appointments, prequalifications, generating leads, and data analysis among other things. Rock Central - I will generalize this as “business support”. HR, administration, etc. Rocket Innovation Studio - A tech incubator to gather and engage top talent and ideas. Recent Acquisitions
RKT, through Lendesk, acquired Finmo back in October of 2020 (https://finance.yahoo.com/news/rocket-companies-subsidiary-acquires-fast-182042594.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAALnvnNBoglSnmMP0O61AqgXBJokNS53LjJYuG3NvYKhayp4I6ZH2RpfmFUbSsCAU4xmnBNGMTwiEG-Ly29EabVy1-OjPIGfkYoQ3389gn3Edebs9sIwWOy1tPzqjRwOwwGA_PWg0cNzEFCe7HBTilMwADUT_y0QxWw8vizWecGcv) Finmo is a rapidly growing Canadian digital mortgage platform and this acquisition I think was perfect - it shows RKTs dedication to embracing a fully digital experience, and making sure they’re the ones leading that charge.
Management
I do not have much to say here, aside from this. The RKT team is not the new kids on the block, they have decades of industry experience. Also, I value leaders that make people feel valued. And on that note, under CEO Jay Farner Quicken Loans has been in the top 30 of Fortune’s “100 Best Companies to Work For” list for 17 consecutive years.
Financials and Growth
When it comes to the numbers, RKT is killing it. I don’t want to just spout a bunch of numbers that anyone can easily go look up so here’s a couple that stood out to me from the Q3 earnings announcement and related data:
$4.63 billion in revenue, which is 163% YoY growth.
From that revenue, they beat EPS estimates with $1.21 for the quarter vs $1.09 expected.
Net income was $2.4 billion which represents a YoY growth of 365%.
Closed loan volume YoY growth was 122% to $89B.
Net rate lock volume was $94.7 Billion (101% growth).
RKT has brought in $13.1 billion in revenue in the first 3 quarters and seems to be on track to close out Q4 with yearly revs above $15 billion.
That’s awesome but what I really like is that they pair this amazing growth with $3.5B cash on hand. That’s great because I want them to be able to scale as they grow, and make acquisitions as needed (see Finmo) to ensure they can keep that growth going without getting overextended and failing to capitalize.
RKTs ability to recapture clients is one of the keys to their future success in my uneducated opinion. Their recapture rate is 4.6x the industry average. The Q3 earnings transcript includes a statement by the CEO on how when interest rates fall, retention rate falls, refinance activity is larger. The high recapture rate RKT has serves as a natural hedge to their retention of existing clients because their recapture is so much higher than average in the industry.
Quick aside - RKT announced a $1 billion share buyback program. They’ll be able to repurchase shares from time to time starting Nov10 2020, ending in two years. I don’t love the idea of share buybacks because I think this can be detrimental to actual business growth for the sake of shareholder value. However, with the large cash position RKT has (and it doubled from December 2019 to September 2020) I think this is a reasonable way to deploy some of that cash for now.
Ok so what about valuation using DCF, free cash flow analysis, something like that? Honestly I’m not convinced this is as useful as some people make it out to be. It’s nice to know what the numbers indicate, but I don’t spend a lot of time worrying about an exact price target based on anything like this. That said, you can crunch the numbers yourself or check out something like the Finbox resources:
https://finbox.com/NYSE:RKT/models/dcf-growth-exit-5yr
I don’t believe that fair value estimate for an instant, but it's a part of the puzzle to consider. Finbox has various models you can check out, but it’s also just a nice place to view aggregate data other than directly from the SEC filings.
Product Channels
RKTs direct-to-consumer channel is their main source of revenue right now, but I think they will be successful in their efforts to grow their partner channels as well. Why do I say that? Numbers don’t lie:
Direct-to-consumer Q3 growth: 131% YoY ($53.5B closed loan volume) Partner Network growth 127% YoY ($29.6B closed volume) Adjusted Revenue for Partner Network is up 502% YTD vs 2019 ( see Q3 earnings transcript) The partner network volume is a little over half of the direct-to-consumer volume but the growth rate is just so damn juicy. That revenue growth is hellathicc.
Current Market and outlook
Right now, rates are low. The average 30-yr mortgage fixed rate is 2.92% (https://www.cnbc.com/2021/02/03/mortgage-refinancing-surges-but-high-home-prices-stop-buyers.html)
I cannot say how long interest rates will remain low but I believe RKT is positioned to continue to grow regardless of what rates do moving forward. They just cover so much of the space, and they do it with a focus on applied technology.
Here’s some blatant speculation. I think as we move into 2021 and the vaccine becomes more prevalent, millennials will buy, sell, and borrow against real estate with renewed intensity. I think RKT is uniquely positioned to capture that market.
Positions: RKT shares. Cost basis of $21.14.

Schwab DD - The company who stands to gain the most out of the restriction/collusion fiasco - $SCHW

Puts on Chinese EVs $NIO, $XPEV, Wish Me Luckin

I did some boring 20 page DD on $KSMT SPAC. Spoiler: I expect it to go up 70-100%

Disclaimer: This article my article. You are reading it first, as I didn't post it anywhere else.
Summary

Game developer with $450 million in revenue with $110M net profit valued at Price to Sales (P/S) ~4.2.
Company seems reasonably valued, operating in growing mobile games market.
Risk-reward ratio at current price is outstanding due to SPAC-merger rules with the cash NAV set at $10.

Kismet Acquisition One (KSMT) to Combine with Nexters Global in $1.9Bn Deal

Not much information about this company, so I started writing my own research on the company. Here is the investor presentation:
https://nexters.com/images/inv_info/Nexters_Investor_Presentation.pdf
If want to understand the valuation of the company, the risk/reward, and the potential I need to answer the following questions:

What is Nexters Global?
SPAC is a safe bet?
Comparison with its competitors?
$1.9B is cheap or expensive?

Let's begin!

1. What is Nexters Global?

Nexters Global is a fast-growing mobile game development company with $450 million gross revenue* (2020), 85 million total game installs, 5.4 Million monthly active users, with 10x growth of revenue in the last 2 years. Already profitable with $110 million net profit in 2020.
The management has more than 10 years of experience in creating games. Located in Cyprus (Europe) with roots in Russia (a very strong IT region). They are well known for being in Game Development since early 2005 in the epicenter of the web, social and mobile game development.
https://preview.redd.it/juhbhhuwhmg61.png?width=640&format=png&auto=webp&s=529a0e927aa3bc3205430d97204d3d625f36fc8d
Since the launch, the company has proven that it can develop, publish and use marketing to scale its games. With 37% of its revenue coming from the US/Canada, 23% from Europe, 19% from Asia it is already an international company.
\In the investor presentation Nexters Global states 310 million net revenue, as at the* sec.gov reports it is more common (example) to use the gross revenue for gaming companies as their base metrics. That's why here and below I’m using gross revenue. Please see the spreadsheet below with a comparison to other companies.
Further plans are:

https://preview.redd.it/t9kdphd0img61.png?width=994&format=png&auto=webp&s=b70e92455e253033e99a91b17b0a1f85012e1e5b

To increase the revenue of existing games (basically, double the revenue in 3 years).
Launch new titles in 2021: 3 new games announced
Working on the sequel of their best selling game "Hero Wars 2".
Use cash to acquire other game developers with great games to amplify revenues using their expertise and marketing/production capabilities to make global hits.

2. SPAC is a safe bet?

There are so many SPACs, that we should be very selective on what we choose to buy. To do that we need to check if the business is real.
There are different kind of risky SPAC’s on the market:

Without product
Without revenue
Without an addressable market
Without proof that they can scale

We need to verify that Nexters Global is not on that list. Let’s have a look at the company:
The product? Web, Social, Mobile Games.
To check if their numbers are real simply open the game page in App Store and Google Play store.
Android Apps by NEXTERS GLOBAL LTD on Google Play
‎Nexters Global LTD Apps on the App Store
The top game has more than 50,000,000 installs with more than a million positive reviews and an average rating of 4.6. With other games/stores combined, it correlates with the company's stated 85 million installs.

https://preview.redd.it/jwh51gm2img61.png?width=735&format=png&auto=webp&s=428ec2dc85a4a6c1d51c67aa8fa1f7876edd3dab
I like that I can see the numbers myself, and also can "touch" the product and how it works. it increases my confidence in owning the stock.
Actually, I have been playing their top-grossing game Hero Wars for several months last year. And I loved it... loved it so much that I’ve spent around ~1000 dollars within 3 months. And I’ve seen players that spent much much more than me (higher ranked, had much more power and ranks). And there were so many players that they had to add new servers each week, or even daily.
The first impression is that I really like the product. I see how it works.
The revenue. It's huge.
In the SPAC world, there are companies that can’t make revenue but predict that their revenue will go up 10-20-50x times in 3-5 years. Usually, such companies are SCAM as they mislead investors with revenue that will never happen.
On another side, Nexters Global has already $450 million in revenue with a $110M profit. And the growth rate is +177% YoY. And even the slowdown in growth means the actual increase in revenue substantially, just by the magic of the compound growth.
I like the numbers very much here.
The addressable market
How big is the addressable market? The World’s 2.7 Billion Gamers Spent $175 Billion on Games in 2020; The Market Will Surpass $200 Billion by 2023. So Nexters Global is well-positioned in expanding market.

https://preview.redd.it/tf41au04img61.png?width=888&format=png&auto=webp&s=7547a1d3c2c8da43554a655d9b32bb4aaf4f2d97
Revenue geography shows that it is also diversified well. The company has proven that it can generate revenue all around the world, not just in its local market. That is very important in order to calculate the valuation of the company.

https://preview.redd.it/sxq08qg5img61.png?width=362&format=png&auto=webp&s=ed9b771d632268efb31d96d57c831d61d8caf12f
But how long Nexters can generate revenue?
Unlike the traditional PC gaming, where the peak of sales occurs after the launch of the game and then shrinks a lot, in the online mobile game market - games get updates each month/quarter to engage customers and make them stay in the game longer.
Games with great engagement + marketing resources can stay on top charts for many years.
You just reinvest part of your revenue into marketing to earn even more. It works for games with high revenue per player (ARPPU).
Nexters Presentation: $106 - Average net bookings per paying user(2) (Q4’20)

https://preview.redd.it/jsqcmby6img61.png?width=666&format=png&auto=webp&s=f96f6ef490ee2b16cf6ca01e8508df578bfdd302
Percentage of paying users increases. Average net booking increases.
With the 6% of paying users and $106 net payment - it is quite easy to calculate that you earn $6.36 from any user that downloads the app, so you can spend on advertisement a lot of money and you will earn even more.
When you have 277% revenue growth in 2019, 177% in 2020 it won’t just stop growing. Next year double-digit growth of revenue is highly probable.
From a statistical behavior the growth slowdown to zero is very unlikely. If we take examples of other super-hit games from Supercell (Clash of Clans) and Playrix (Gardenscapes).
Example: Playrix did continue to grow since 2016 explosive revenue withadding +41% YoY growth in 2018 +35% in 2019.

https://preview.redd.it/so9ijp08img61.png?width=667&format=png&auto=webp&s=6f6acbdf41374f89c045bb07c4b4e5f7dc235bf9
Another example: Supercell's revenue continued to grow at least 2 years after the revenue explosion before slowing down.

https://preview.redd.it/tjjuf159img61.png?width=855&format=png&auto=webp&s=01116616d83bbeeb34bbe98da012d22c3964f5d5
The growth
Great games could continue to grow. Nexters Global estimates their net revenue to reach $562 million dollars. That equals to ~$802 million gross revenue in 2023. And the company is valued at just 1.9B now. Re-think that.📷
This chart also shows that they project only +10.5% YoY growth in revenue in its current games after this year's gain. Which I think is too conservative considering the examples above. I understand that they’ve chosen the strategy not to mislead investors and should stay conservative, but I think they will easily beat their own estimates and 20-25% growth is much more realistic.
The good thing is that we can track their performance in terms of downloads and revenue in stores. We can stay ahead and know the data earlier than official numbers come out, which brings another level of transparency for investors.

Kismet Acquisition One Corp company

The company is led by CEO and Director Ivan Tavrin, the founder and Principal of investment firm Kismet Capital Group. Tavrin previously served as the CEO of PJSC MegaFon, Russia's second largest telecommunications operator, and before that, he founded UTH Russia, one of the largest independent media broadcasting groups in Russia.
Kismet Acquisition Two plans to target the internet and technology sectors operating in Europe, including Russia, as well as businesses established by founders with Russian origins.
Credit Suisse, BofA Securities and LionTree Advisors served as financial and capital markets advisors to Kismet Acquisition One Corp.
Advisors look good to me. The CEO's background and experience too. Additionally, he was one of the shareholders in the recently launched Russian IPO "OZON" marketplace. Which is now +120% up.
The only thing that sounds scary here is the word “Russia” everywhere. Is there an unwanted geopolitical risk? From the legal point of view, every entity is registered under British Law jurisdictions (Cyprus, BVI). So, basically, there shouldn't be any problems.
Well... they would better be in the US as many investors don’t like foreign companies. But there are great examples of super successful Supercell and Rovio that were NON-US too. And we know that the Russian Tech-sector is high qualified (Google Founder - Sergey Brin, Pavel Durov - Telegram, Vitalik Buterin - Etherium, and even Russian Hackers is a “meme”).
And as I said before their business looks crystal clear, anybody can check their metrics so they can’t fraud the data, unlike, for example, Luckin Coffee did in China. Therefore, this kind of risk is eliminated.

3. Comparison with its competitors?

Let's talk about numbers. I’ve tried to compare the game developer to its direct competitors. I've selected only companies with major mobile game-driven revenue.
Here is the full spreadsheet access: Nexters Global Comparison
I’ve marked the concerning metric with yellow and red, Good metric with green, Superb one with dark-green color.

https://preview.redd.it/tmsosbtaimg61.png?width=1079&format=png&auto=webp&s=2b50cd7a1a54115bb496849c43b3611094fc6309
Please take time to read the numbers and come back after.
Update! With the latest news that Electronic Arts buys GLU Mobile with +39% premium from the market - the sector is officially undervalued.
Thoughts on Nexters Global

Nexters is big enough in terms of revenue
The MAU (Monthly Average Users) is not very big. While you can consider that as a “minus” that's actually the sign of a young company, with the opportunity to attract more users “cheaper” (with high efficiency). When you already big and you have hundreds of million players, you have to spend more and more money on user acquisition.
No diversification. That’s a red flag. Hearing of 3 titles coming next year + Hero Wars 2 to be developed. And the idea of acquisition of small developers with excellent games to amplify their revenue 10-100 times promoting it around the World is the Next goal for Nexters. This will bring diversification.
Remember that Supercell (also a European company, HQ in Finland) with its only best selling game was sold to Tencent at a $10.5 billion valuation. This "Hero Wars" game is currently following its path (in terms of growth numbers & revenue).
Games are high gross margin projects. I assume this gross margin from the cost of revenue is: AppStore/Google Play 30% commission + spending on maintaining the Servers. That brings me to the industry average of 65%
Marketing spending numbers are rational (20-40% zone), in order to stay profitable and to maintain modest growth.
It's already a large scalable company. No “company growth issues” seen through this data. Sign of good management here.
Unusually high net income seeing here. Assumption: Research & Development costs /Administrative spending / Sales and Marketing is much lower compared to other US companies. Probably they benefit from HQ being outside of the US. That should affect the company multiplicators (P/E) positive.
With not very high US Market penetration - the opportunity still there.
Game reviews/rating is essential in mobile games: The higher-rated games = the cheaper is the cost of user acquisition. The longer players stay in-game. The “4.5” rating tells me that customers of this company are very satisfied.
Fascinating growth. Very young company. The slowdown in growth is expected but compound growth is still very probable.
Estimated Compound Annual Growth (CAGR) is 25%. Which would bring the company ~$802 million revenue in 2023.
Is the company valued right? It's more profitable in comparison to its competitors, its double-triple digit growth company with all signs of the trend to continue.
The company is honest with its estimates and setting very realistic numbers. Other SPACs prefer to predict 10,20,50x revenue in the future even without proving they can scale. This company is doubling-tripling every year and shows estimates of 25% annual growth each year.

I ended up with numbers: P/S = 4.19, P/E = 17.27. This valuation seems just right with current earnings and the sector, but not with the future growth. As there is a Hot trend in gaming and with outstanding YoY growth could be worth much much more.

4. $1.9B is cheap or expensive?

The current price of $KSMT (“GDEV”) is $10.15 which represents a $1.9B valuation. Before the deal is completed the price cannot be valued less than $10 due to SPAC rules. So there is simply no downside risk at this point..
But can it go up? What is fair valuation? Is there a risk of a selloff from shareholders? How rich the valuation can be in terms of P/E (Price to Sales ratio)?
First, let's find out the risk of insider selling:
Here is the sec report: https://www.sec.gov/Archives/edgadata/1814824/000121390021005589/ea134294ex99-1_kismet.htm
The Transaction is expected to deliver up to $150 million in cash to the Company’s balance sheet before advisor fees and/or redemptions by Kismet Acquisition One Corp. current shareholders, with proceeds expected to be used for general working capital purposes and potential acquisitions. Existing shareholders of Nexters will receive a cash payment of up to $150 million pro-rata to their pre-money shareholdings, and will roll approximately 92% of their holdings into the combined company while agreeing to a 12 month lock-up (subject to certain exceptions). In addition, the founders and the management will receive 20.0 million Earn-Out shares over 3 years (with 50% of the Earn-Out released at $13.50 VWAP and 50% released at $17.00 VWAP), also subject to a 12 month lock-up. The Transaction will be funded by approximately $250 million held in trust by Kismet Acquisition One Corp., subject to any redemptions, as well as the additional $50 million investment by the SPAC Sponsor, Kismet Capital Group, via an affiliate.
The investors will have a 12-month lock-up on selling + they get benefits on reaching the valuation 35% and 70% higher from the current price. This means that there will be no insider selling in the near term, which is very positive signal.
Acquisitions
Nexters Global plans to use proceeds in M&A (buying small game development studios with great projects that just don’t have enough cash, expertise, or right developer team) to benefit from its situation in order to launch great games worldwide.

https://preview.redd.it/xhypgzqfimg61.png?width=1000&format=png&auto=webp&s=642c03fecbb851984527c46774beb0ecc44eba0a
It is a common mistake to assume that great games can be run by small studios or individuals, as in 2020 you need at least a couple of million dollars spent on marketing to understand if the project is worth it, or not. Small developers can’t afford it. On the other side, Nexters can benefit from it really well.
If they are successful in that, we could see 10+ new titles in the future. That could diversify its game portfolio, making this company a safe bet for Hedge funds and other market players, driving future growth.
“Hero Wars 2” game announcement.
Hero Wars is the top-grossing game, which generates most of the revenue. With “Hero Wars 2” announcement the company can benefit a lot..
Usually, game sequels can do very well, as they are easier to promote, finding their “fan base” from the beginning. This could create a new source of income, work as a diversification, launch the new cycle of the revenue stream for many years ahead.
Partnership with Playrix founders
Here is another thing that I want to focus on:
Bukhman brothers acquired a 43% stake in Nexters in 2018
They are founders of “Playrix” - a private mobile game developer company, currently valued at $7B(valued in Q1 2020). Now more likely ~11B as their revenue increased 1.5 times during 2020.
Please read these articles in Bloomberg and Forbes first:

Summary from the articles:
Cashing out (selling out to Tencent or Activision Blizzard) is not interesting right now. We are growing every year. Game industry multiplicators of public companies were priced wrong . This year has changed it. And this trend will continue as top games can grow for many many years, reengaging users with updates.
Playrix is not interested in IPO's at this valuation. They want to wait until the market changes and start pricing gaming companies at different valuations, not the 4-5 year revenues, but maybe more like Tech companies are valued now (P/S 20-30 instead of 4-5)?
I can assume that Playrix founders are interested in the long-term success of Nexters Global SPAC-merger in order to change how markets price the gaming companies as they want to bring Playrix to an IPO in the future. They want to wait until the market starts pricing gaming companies at different valuations, not the 4-5 year revenues, but maybe more like Tech companies are valued now (P/S 20-30 instead of 4-5)?
So, for the Bukhman brothers who own 43% shares, Nexters Global is a long-term play company. They don’t want/need to cash out.
I also think that at some point, Tencent could just buy 20-30% of the company through the open market (buying shares). Why? Because it is common for Tencent to buy a stake in gaming companies that earn a lot of cash and priced at these valuations.

https://preview.redd.it/uphpbubcimg61.png?width=804&format=png&auto=webp&s=4f35889049fa9302786bf65d1b83f02a92d71eef

Summary

In my personal opinion, this is a great company with a bright future.
Valuation seems reasonable and there is a big upside if any of those happens:

Company starts to actively search for acquisition targets (we will see from press-releases)
Company launches "Hero Wars 2" title
The company beats its own low guidance estimates (which I think the most probable)
Company launches more titles which enter “Top ranks” in AppStore/Google Play store.
Aggressive Tencent/Other major Gaming Holdings buying.

At this exact moment, the fair valuation of the company will move to $3-4 billion dollar. (+100% upside).
At this right moment of the time as the price is near $10 there is literally no risk in a pre-merger state, as SPAC can’t go below $10 price by its concept.
Disclosure: At the moment of writing this article I do have a position in $KSMT, that is not more than 10% of my entire portfolio. I do not plan to sell at any nearest time in future. Stocks are risk assets and this is not investment advice.

This Week At Bungie 12/10/2020

Source: https://www.bungie.net/en/News/Article/49971
This week at Bungie, Hawkmoon, next-gen, and the Dawning, oh my!
OK, so it’s been another action-packed week with updates to the game and news about the future, so let’s just get into it. We started off on Tuesday with an early morning dev update on the state of rewards in the game. We wanted to share some of the plans to improve rewards as well as a few other exciting things coming up. The whole update is definitely worth a read, but I stole some bullets:

In Season 13, we’re adding six new Legendary weapons to our ritual activities, two each for strikes, Gambit, and Crucible.
In addition to the weapons above, Nightfall strikes are getting three unique weapons, with The Palindrome, The Swarm, and Shadow Price all making their Destiny 2 debuts. If you’re brave enough to take on Grandmaster Nightfalls, you will be also able to earn Adept versions of these weapons.
Transmog will be coming with Season 14. More details to come. (See work-in-progress mock-ups!)
DDoS protection for Destiny 2 players on all consoles will be coming in Season 13.
The Vault of Glass raid returns in Year 4.
Crossplay is coming in 2021.
Two strikes (Fallen S.A.B.E.R. and Devil’s Lair) are coming to Destiny 2 in Season 13.
Legendary and Master Lost Sector rotation will be expanded to include the Lost Sectors on the Moon in Season 13, and there will be new three new pieces of Exotic armor to chase.

That very same day, Update 3.0.1 went live with several important fixes as well as next-gen enhancements for consoles so you can experience the beauty of Destiny 2 with moar frames and moar FOV! We wrote up an article that covers these new enhancements in detail as well as the new ability to pick up bounties from the Companion App and the return of the Prophecy dungeon.
This week also saw the return of Hawkmoon. The highly sought-after Exotic Hand Cannon makes its debut into Destiny 2 with a reworked perk that no longer relies on RNG but still packs a punch. Season Pass owners can now visit Spider to set off on the quest to claim their Hawkmoon.
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The Dawning

This very merry morning we shared a peek at this year’s Dawning event that kicks off next week!
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Eva Levante is coming to town! She has new cookie recipes and new gifts for all the good Guardians... even if they did adopt Darkness powers.
But I digress. Check out our Dawning page for a quick look at what the event has to offer this year. The Tower is going to be all dressed up again, and we’re putting the Griswold touch on the decorations.
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Everyone knows the best gifts vaporize your enemies. Glacioclasm is a new Legendary Fusion Rifle being introduced during this event with random rolls available so each one you open is special. Plus - Glacioclasm is just fun to say. Try saying it without smiling, I dare you! I double-dog dare you. Anyway, here is a preview of the weapon.
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As you are flying around delivering baked goods you will need a new ship to spread cheer in style. Eva has a new Exotic ship that you will be able to upgrade throughout the event to change its look. You will be able to customize the engine streams, different spawn effects, and unlock a new animated shader unique to the ship!
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Eva has also set up a fun new celebration for this year's Dawning that involves even more gifts... for you! As the community generates Dawning Spirit by completing activities you will be able to progress a special community pursuit with your cookie skills and then find new gifts waiting for you under the tree. The big glowy one, you can’t miss it. We don’t want to spoil all the surprises but you may find some upgrade materials in these gifts.
There will also be some fun stuff at the Eververse store as well. All of the new items added to the store will be available at some point for Bright Dust with the exception of the Glee Barrage and Merry Maker weapon ornaments and Happy Trails finisher which will be available for Silver. Here is a preview of a few of the Sparrows, Ghost Shells, and a ship that are sure to get you in the spirit.
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Super Smash Warlock Melee

Shortly after launch, we put out a hotfix to reel in Stasis a bit. When we made these changes we wanted them to have as much efficacy as possible and that meant using broad strokes to cover a lot of ground. This led to us hitting Penumbral Blast's range harder than many players felt was necessary. Upon review and hearing the feedback we felt that while Penumbral Blast's range needed to come in - there is room to push it back out and have it feel more consistent when hitting targets at range. Here is a preview of patch notes coming in a hotfix next week.

Penumbral Blast:

Projectile range increased by 37%
Minimum distance to cast ranged melee reduced by 32%.
- This allows you to throw the ranged melee closer to targets.

One... Million... Dollars

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You have been absolutely crushing it raising money to support the Bungie Foundation and Children’s Miracle Network Hospitals. As of this writing you have raised 1,036,555 so far and you still have until December 13 to donate to a cause that benefits sick kids across the country. If you haven’t donated yet, there are some great prize incentives listed here for donating.
Speaking of incentives, now that we have hit $1 million we are going to start releasing Destiny lore readings by the following special guests for every $50,000 donation milestone we hit!

Giacomo Gianniotti: Dr. Andrew DeLuca, Grey’s Anatomy
Morla Gorrondona: Eris Morn, Destiny 2
Erika Ishii: Ana Bray, Destiny 2
Peter Jessop: Guardian/Exo Male, Destiny 2
Neil Kaplan: Dominus Ghaul, Destiny 2
Nyambi Nyambi: Jay Dipersia, The Good Fight
Brandon O'Neill: Uldren Sov, Destiny 2
Moira Quirk: Emissary/The Exo StrangeOrin, Destiny 2
Zehra Fazal: Guardian, Destiny 2

Thank you to everyone who has donated or volunteered to help raise money through streams and other incentives. It’s always amazing what this community can do when it comes together. Finish strong!

Spreading Update Cheer

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We had another deployment this week which means our player support specialists were watching closely and tracking any issues that popped up.
This is their report.

CONNECTION AND SERVER ISSUES
Since Update 3.0.1.1 on December 8, we’ve been investigating various connection issues, including the following error codes: PRUNE, and WEASEL. The BEE, CACAO, CENTIPEDE, and CHICKEN error codes have since been resolved.

TRIALS OF OSIRIS REWARD SCHEDULE
Trials of Osiris is expected to return on December 18. Due to the delay of launching Trials, a few changes were made to the reward schedule: During the first four weeks, the Flawless chest will drop an Adept Weapon. The fifth week will drop an armor piece, with subsequent weeks switching the rewards back and forth between Adept weapons and armor as previously mentioned here. Adept weapon mods will drop each week.

PS4 FRIENDS LIST UPDATE
Since the launch of Beyond Light, we’ve been investigating an issue for PlayStation 4 players who could only see a small number of their friends online in their Roster. We discovered this issue only affected those with more than 100 friends in their Roster. This issue has been resolved, but after further testing we discovered another issue affecting how online friends are displayed. That issue will be fixed on December 14 in Hotfix 3.0.1.2.

XBOX SERIES X|S FREEZING ISSUE
While unlikely, it’s possible that Destiny 2 may freeze up when signing out of an Xbox Live profile while inside the game. We recommend quitting out of the Destiny 2 app first before signing out. If the game does freeze, players can press the Xbox Guide button on their controller, select Destiny 2, and then select Quit. This issue will be fixed on December 14 in Hotfix 3.0.1.2.

VESPER OF RADIUS UPDATE
Last Friday, we disabled Vesper of Radius due to it being possible to cast a Rift while falling off a ledge which, when combined with Stasis, could result in a quick lethal combo to opposing players in Crucible. Rift energy wasn’t being used, so it was possible to repeat again right after execution. This issue will be fixed on December 17 in Hotfix 3.0.1.3.

SPOILS OF CONQUEST
We’re investigating an issue where players can put their Spoils of Conquest raid currency in their vault, resulting in it disappearing. While we continue our investigation, players should refrain from putting Spoils of Conquest in their vault.

NEXT-GEN UPDATES
Xbox Series X|S and PlayStation 5 players who are migrating from Xbox One and PlayStation 4, respectively, will need to download the full-size version of Destiny 2 to get all of the benefits of our next-gen update. For more information, please read our TWAB from December 3.
PlayStation 4 players upgrading to PlayStation 5 may need to highlight Destiny 2 on the PlayStation 5 home screen or PlayStation 5 Store, click the three dots menu, and select the PlayStation 5 Upgrade download. Click here for more information.

Along with our next-gen updates, we discovered that some player settings on PC were transferred to players’ console accounts if they are Cross Saved. Until we can implement a fix, console players experiencing FPS or screen-tearing issues can go into their game’s Settings > Video, and choose “Reset to Default” to resolve these issues.

KNOWN ISSUES
While we continue investigating various known issues, here is a list of the latest issues that were reported to us in our #Help Forum:

We’re investigating reports that cross-gen matchmaking sometimes doesn’t work.

FPS issues on PC. Please help us determine the cause by posting your information in this thread.

PlayStation Remote Play reverts controller remapping and may not function at all.

Deafening Whisper doesn’t trigger the Abyssal Extractors perk on Nezarec’s Sin Exotic helmet.

Nezarec’s Sin Exotic helmet no longer triggers for five seconds after the second kill and all buff kills are now 2.5 seconds. This is intentional, but we failed to call it out in the patch notes for Update 3.0.0.1. The “original” functionality was a bug that applied 2.5 seconds twice for each subsequent kill.

Necrotic Grip doesn’t give melee energy on corrupted combatant kills. This is intentional, and the Exotic will be updated to remove the text mentioning this.

Necrotic Grip doesn’t poison combatants when a ranged melee attack breaks their shield from full.

Honed for Speed and Ascendant Champion Triumphs don't unlock when completing the Keep of Honed Edges Ascendant Challenge.

Toland doesn’t appear in the Shattered Ruins Ascendant Challenge.

Surrounded perk buff does not linger when using Surrounded Spec mod.

True Prophecy has been removed from world loot pool. This is intentional.

The Shotgun Dexterity arm mod shown in legs category in Collections.

The Line in the Sand weapon model has random protrusion when held.

The Unrelenting weapon perk isn’t functional.

Lost Lament quest sometimes needs to be abandoned and reacquired to continue.

Thunderlord is currently missing its scope.

The Ahamkara Bones may not spawn in the Agonarch Abyss Ascendant Challenge.

For a full list of emergent issues in Destiny 2, players can review our Known Issues article. Players who observe other issues should report them to our #Help forum.

On Demand

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Welcome to yet another exciting edition of Movie of the Week. This is your time to shine as we share a few of our favorite community created videos we come across during the week. Here are picks for this week.
Movie of the Week: Turtles in their Teens.
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Movie of the Week: We can build bridges...
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As always, our winners are taking home a special emblem. If you won, congrats! Just please make sure you put a link to your Bungie.net profile in the description of your video.

It Belongs in a Museum

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Moving pictures aren’t the only thing we like to highlight in the community. All forms of stationary art are welcome too, and we have a special emblem to give to every artist we highlight. Here are the pieces that caught our eye this week.
Art of the Week: Titan’s Best Friend

friendship ended with guillotine now lament is my titan's best friend #Destiny2 #DestinyArt pic.twitter.com/1dwhxcJBeb
— MOREBIRD (@morebirb) December 9, 2020

Art of the Week: Crow and Glint

Crow and Glint (now in color!) from #Destiny2 #destinythegame #DestinyArt pic.twitter.com/PbraDiCLYl
— ilayas (@ilayas_11) December 7, 2020

Art of the Week: Yin & Yang

[
View this post on Instagram
](https://www.instagram.com/p/CIOVx7Sl111/?utm_source=ig_embed&utm_campaign=loading)
A post shared by 3D Art / Gameart 🎨 (@ohlac3d)

Tag your creation with #DestinyArt on whatever platform you like to post your art on to help us find it easier. Twitter, Instagram, and our Creations page are our favorite spots to scroll through the community's talent. If you win, please reply to your winning post with your Bungie.net profile link so we can get you your emblem!
This is going to be the last TWAB of the year. Don’t worry, we’re not all going on a big hiatus at once. We will still be around. This is the time of year where many of us like to take some time away from work to be recharged and enjoy the cold wet darkness of the PNW at home with the fam. I mean, we were at home already, but now we’re not talking to our computers all day. We’ve made sure that the feedback is still flowing, and that you have the latest info on ongoing issues and anything new that pops up. The Dawning isn’t the only thing starting next week, we also have raid challenges going live for Deep Stone Crypt so keep an eye out for that.
It’s been a wild year. It’s almost hard to remember what it was like to be in the studio at this point. Depending on how everything shakes out it will be nice to get back there sometime next year. Until then, we will keep plugging away from our offices, living rooms, garages, patios, and other random rooms around our homes. We still have a lot of work to do. We shared some of our short-term plans with you this week, and there is a whole lot more coming in 2021 as well. See you next year!
<3 Cozmo

Corsair Thoughts

Alright gents, gather around for my adderall infused dissertation on why im JACKED-TO-THE-TITS on this beaut. Now I know there are many valuable DDs on CRSR over there on wallstreetbets, but I decided to give my own opinion for the fuck of it.
Lets get some of the boring stuff out of the way first: (taken from their quarterly report ending sept 30 2020 which can be found on under "SEC filing" on the investor relations page of CRSRs website)

Net revenue was $457.1 million, an increase of 60.7% year-over-year. Gamer and creator peripherals segment net revenue was $161.6 million, an increase of 128.8% year-over-year. Gaming components and systems segment net revenue was $295.5 million, an increase of 38.3% year-over-year
Gross profit was $127.9 million, an increase of 112.4% year-over-year, with gross margin of 28.0%, an improvement of 680 basis points year-over-year. Gamer and creator peripherals segment gross profit was $60.0 million, an increase of 200.8% year-over-year. Gaming components and systems segment gross profit was $67.9 million, an increase of 68.7% year-over-year.
Operating income was $49.7 million, an increase of 353.6% year-over-year, Adjusted operating income was $61.4 million, an increase of 193.7% year-over-year.
Adjusted EBITDA was $63.7 million, an increase of 184.9% year-over-year, with adjusted EBITDA margin of 13.9%
Adjusted net income was $48.5 million, or $0.54 per diluted share, an increase of 384.0% year-over-year compared to adjusted net income of $10.0 million, or $0.13 per diluted share.
As of September 30, 2020, we had cash and restricted cash of $120.1 million, $48.0 million capacity under our revolving credit facility and total long-term debt of $370.1 million
Cash flow from operations was $24.7 million, compared to a use of cash in operations of $2.1 million in the same period a year ago, bringing the 2020 nine month cash flow from operations to $100.3 million.

These numbers make me fucking wet. COVID was a huge accelerator for this company but I believe there are other catalysts that contributed and will continue to contribute to their growth in the future. REMEMBER these numbers are from June - September. They dont include the 4th quarter of 2020, nor do they include the numbers from the initial lockdown where we saw a lot of people really settling in to the new life of quarantine (and upgrading or buying their first computers) YES they do have some debt, but they recently did a public offering which raised 118.6m of which 86.6m was used to pay off debt. A statement from the quarterly filing :"We plan to continue to utilize our strong cash flow to further reduce our debt"
CRSR also announced the release of new products that will be for sale in OCTOBER of 2020. We will see how well they did in this upcoming earnings on the 9th. BUT, I am an amazon seller and can help get a general idea of how well they sold in Q4 through amazon. For other retailors I did my normal ground DD and traveled to a couple best buys and microcenters in my area to see the stock.
Before I get started I feel I need to explain some things: When an item is listed on amazon, it is given a "rank" which shows where the product is relative to other products in the same category. For example a rank of "1" means that product FLIES off the shelf, were as a ranked of 5m MIGHT sell 1 a month. Its used as a general guideline for amazon sellers to determine how products are doing. You can gather this information by scrolling down on an amazon page till you see the "sales rank #" or if you participate in retail arbitrage and that whole monster you can use a paid software called keepa.
SOME OF THE NEW PRODUCTS RELEASED

Cooling systems: e H100i ELITE CAPELLIX, H115i ELITE CAPELLIX, and H150i ELITE CAPELLIX. These bad bois were sold out fucking everywhere. Great reviews checking multiple sites. Sales rank of 43 under cooling systems on amazon. They're moving this product FAST AND IN QUANITIES. Plus we all know how much we love our color changing shit.
VENGEANCE i7200 Series: Pretty beast computer, it isn't sold on amazon and I actually didn't check the stocks of this guy in retail stores. So I cant really comment on this one.
Corsair K100 RGB Keyboard: Low stock in retail stores, this thing is moving on amazon and seems to be doing pretty well on other online retailors.
KATAR PRO WIRELESS Gaming Mouse: This one was interesting. There were more on the shelves than their other mice, but I attribute this to it not being a MMO mouse (lack of side buttons for those non gamers) but never the less showed strong competition on amazon with its Logitech counterparts ( it hovered around 1k sales rank from late October to current)
Corsair MP400 Gen3 PCIe x4 NVMe M.2 Solid State Drive: New SSD, almost all of their SSDs have done well in the past. Mainly positive reviews with an extremely high review count.
K60 RGB PRO Keyboard: Another keyboard, following the same trend line as the previous keyboard states (#3) sales for this keyboard however were decent (22k sales rank) until December hit, then it exploded (1k sales rank)
HS60 HAPTIC Headset: I can personally attest to the quality of corsair headsets and cooling equipment, this shit is fantastic. They're durable for when you throw them and give far better audio and mic quality then their Logitech counterparts.
CORSAIR HS75 XB WIRELESS: I bolded this one for a reason. This one wasn't very well received. Although there are a lot of youtube videos and other promoters saying how good it was, customers seemed to have encountered a lot of problems with it. (wouldn't work after a certain amount of time, weird functionality, etc.) BUT THIS IS A POSITIVE in my eyes. Things dont make sense when every product a company releases is fire, and this one sure seems that it wasn't. It does show however that a predominantly computer focused company is expanding into the console market. With talks of future consoles being able to be "upgraded", I believe they are making the move to further their growth within the console space at the perfect time. Of course there are gonna be a few road bumps.

That is quite of bit of products to release in such a short time span, but a perfect amount to release before the most profitable time of the year. They also announced their acquisition of EPCOM (5million downloads on the apple app store), Game sensei, the leading gaming coaching platform. They also announced a partnership deal with PIPELINE a leading streamer mentorship platform (I didn't even know this existed but did some digging and I like it). This leads me to my next point.
GAMING ISN'T GOING ANYWHERE EVEN AFTER THE PANDEMIC IS OVER.
Pro esports and streaming was already gaining a lot of steam pre pandemic, after the pandemic I still see a lot of growth for esports and gaming as a whole. To add, a lot of people try to emulate their favorite streamer or pro players (just like in traditional sports) people WILL BUY the gear that they are using just like people buy whatever it is that traditional sports players wear.
Streamers they sponsor
Teams they sponsor
I like these, a lot. They're biggest team the ROX tigers competes in multiple esports and has a huge fan following (20m). They also sponsor some pretty famous streamers (summit1g - the guy who basically started streaming, Voyboy - a ex pro league streamer that is still very involved with the community and Bajheera - big World of Warcraft player). What I LOVE about this that its not so focused on just NA alone. Example : ROX is a Korean team, showing that they are not only trying to grow their brand within the Americas, but worldwide as well.
THEY'RE GOING TO SMOKE THEIR EARNINGS
Corsair has a 41.9% share of the PC component market with an addressable market of 36B, they report a peripheriral market share of 18.9%. This is the smoke. This company has a LOT of room to grow and new areas to expand into. As shown above they keep producing new products within their main sector that are doing very well, while also expanding into other markets (consoles) Corsairs market cap sits at a steady 4B, while its primary competitor (LOGI) sits at a nice 19B market cap. Corsair can easily hit a 10B marketcap at its current growth. I firmly believe this company is far undervalued, but we will see just how undervalued after their earnings on the 8th.
If we take a look at estimates they are low (which does make me believe there might be a after earnings sell off because the estimates are so weak - everyone could be predicting a earnings beat). Last quarter they reported a EPS of 0.54 when 0.32 was estimated, yet for this quarter -including q4 of last year- the estimate sits at 0.46. Rev estimates sit at 555.27m on the high side for this quarter, they did 457m last quarter. Do they really expect me to believe that they are only gonna make an extra 100m compared to their last quarter which didn't have the Christmas in it?
With all the new product launches and lingering sales from previous products, I think they're gonna murder every estimate.
Now this is just my extremely bullish position and that im very fond of this company, love and use their products. I think they:

Clear 600m Rev for the quarter
Substantially decrease debt
Provide great guidance

Last thoughts before I get to how im playing this. There's some other DDs (I'll have to find them and add them to this post) that touches on how good their streaming gear and software is that also shares the same bullish standpoint that I do (I didn't include this in the DD because I personally haven't looked into as the others DDs are sufficient for my confirmation bias).
Anyways, currently im running a covered strangle. Im more of a thetagang player so you'll see a lot of that aspect if I ever post again.
Positions: Sold 5 x 35p 2/19 Sold 5 x 50c 3/19 500 commons at 43$.
BuT WhY ThE PuTs If Ur So BuLlIsH
Obviously for the freemium. I LOVE this stock at 35-40 and would buy as much as I could afford. I really like this stock at 40-45, and I kinda like it above 50. But to me this isn't a earnings play, I see substantial growth for this company over the current year. I plan to easily 2-3x my money over the next 2-3 years.
Sadly, this is my first DD, so rip away.
Edit: this isn’t financial advice, just my opinion on why I like it. Also if your going to buy calls make sure you have a strong understanding of IV

Fundamental analysis of GME and an argument for why the speculation is perfectly reasonable

Hello to all you special, fabulous, and unsophisticated retail traders. I believe people should view GME how they view startups and tech companies, with a focus on their future potential and how their fundamentals will enable or hinder growth, instead of focusing on their current price to earnings and short term volatility. I'm long on Gamestop because of changes in leadership, their new business strategy, and because their fundamentals are ACTUALLY PERFECT for company beginning to restructure and transform.

Considering the pandemic and overall state of electronic retailers, let's compare Gamestop and Best Buy fundamentals using their October 2020 10-Qs. BBY is much bigger than GME, isn't currently losing money, and no analysts are concerned about them going bankrupt, so how do their fundamentals compare? They both have relatively strong balance sheets for retailers in 2020, and both companies have almost identical quick ratios and networking capital ratios (.5 and 1.0). Their current distribution of their current assets is similar, but one huge positive for GME is that their current assets are 37.5% cash and about 50% inventory, which is great for companies beginning to restructure. A large cash balance grants the means to launch new company strategies, inventory obviously/hopefully means future revenue for retailers, and a conservative net AR balance in 2020 is likely for the best (not overestimating how much outstanding revenue can be collected). The majority of the current liabilities for GME are AP and accrued expenses, which is standard for commercial retail companies. However, it's more important to note relatively low levels of actual current debt, long term debt, and why the effect of operating leases on total liabilities is bullshit and stupid. ASC 842 changed how leases are accounted for effective January 2019, so operating leases are now shown as current and long term liabilities. So while GMEs debt to equity ratio looks significantly worse than Best Buys, I'd argue that its actually better. Getting out of an operating lease for a small store like Gamestop is pretty easy to negotiate or buy out, not easy to get out of a lease for the massive stores Best Buy leases. Also being F500 and having a huge market cap skewers D/E considerably. GME has a ton of cash, limited debt, and operating leases that that can be exited with some relative ease if needed, so Gamestop can restructure with plenty of breathing room.
Looking at the income statement and cash flows, GME earnings are not awful given the conditions of brick and mortar stores during a pandemic. While Gamestop has a net income loss, they have good gross profits, and their gross margin is better than Best Buy. Gross margin indicates their core sales and costs of goods sold (costs directly related to revenue) are solid are fundamentally good. They just have too many general and administrative (non-revenue producing) expenses. I wonder what they could do to reduce overhead expenses of supplying and maintaining retail stores? Also, net income loss and loss in cash flows from operating activity in October 2020 was less than 2019. So while it's definitely not ideal to see they losses, they made significant progress towards having a positive net income IN A PANDEMIC/RECESSION, and this was still before the PS5 or Xbox Series X was released in November. GME had a positive total cash flow, but it was driven primarily from the sale of property and equipment. Sale of property and equipment is typically not a good sign for companies (think of a McDonalds not selling enough burgers so it starts selling off fryers for positive cash flow) but I believe it will be good for them. This is one of the first steps in their transformation to an online retailer, which I believe will ultimately make them profitable again. If you don't believe me, you can read exactly what their plan is.
Ryan Cohen and other Chewy executives did not invest and join the Gamestonk board for the lulz. They liked GMEs plan and the unique opportunity that Gamestop presents, kind of like all of us shitheads here. I think their involvement in the company will provide the necessary knowledge and experience needed to grow improve e-commerce sales. The business strategy from their October 2020 10-Q:

BUSINESS STRATEGY
In May of 2019, we announced our multi-year transformation initiative, which we refer to as GameStop Reboot to position GameStop on the correct strategic path and fully leverage our unique position and brand in the video game industry. Our strategic plan is anchored on the following tenets.
Optimize the core business. Improve the efficiency and effectiveness of operations across the organization, including cost restructuring, inventory management optimization, adding and growing high margin product categories, and rationalizing the global store base. Prioritizing efforts to optimize the store base and improve the fundamental operations of the business yielded the net closure of 321 stores in fiscal 2019, 461 stores year-to-date in fiscal 2020, and included both the divestiture of the Simply Mac business and wind down of underperforming operations in Denmark, Finland, Norway and Sweden. Improved inventory management drove a significant increase in inventory turns and as a result, in working capital, while an intense focus on organization structure and expense reductions yielded a $315.9 reduction in reported Selling, General and Administrative costs year-to-date in fiscal 2020.
Build a frictionless digital ecosystem. Develop and deploy a frictionless consumer facing digital first omni-channel environment, including the recent relaunch and customer experience enhancements within GameStop.com, the launch of a completely new GameStop App, as well as the optimization of our retail store footprint to maximize our customer reach more broadly across all channels and provide them the full spectrum of content and access to products they desire, however, wherever and whenever they want to shop. Enhancements to the user shopping experience and improved omni-channel capabilities, including expanded delivery and payment options, yielded an increase in e-commerce sales of over 430% through the third fiscal quarter of 2020.
Become the social / cultural hub for gaming. Create the social and cultural hub for games and entertainment and expand GameStop’s addressable market through category and product expansion to offer the most comprehensive product offering across the GameStop omni-channel platform. Our customers are increasing their engagement across the spectrum of games, entertainment and technology and our focus remains to meet those expanding needs.
Transform vendor partnerships. Transform our vendor and partner relationships to unlock additional high-margin revenue streams through an expanded suite of product and service offerings to optimize the lifetime value of every customer.
Connected to our transformation efforts, we have incurred and continue to incur severance, store closure costs and expenses for consultants and advisors. See "Consolidated Results from Operations—Selling, General and Administrative Expenses" for further information.
We continually review and prioritize our capital needs and are committed to making investments in our infrastructure to drive our business plans and realize on our transformation initiatives. Key areas of investment include improving the presentation and content as well as the functionality, general search and navigation across our customer facing digital channels; improving customer data integration and customer relations management capabilities; continuing to enhance service offerings to our customers; continuing to strengthen and deepen our information technology, analytics, marketing and e-commerce groups; and creating more flexible fulfillment options designed to improve our delivery capabilities and reduce our shipping costs. These and other investments are expected to, among other things, provide a seamless and compelling customer experience across our omni-channel retail platform.

I still think shorts did not cover, red days are meaningless short ladders, there's probably counterfeit shares floating around, and media fuckery trying to stop a huge squeeze. But totally forgetting all that for a second, when the fuck did every single analyst on wall street start believing that fundamentals are the only thing that matters looking at stock price? A ton of startups and tech companies that IPO trade wildly higher than their fundamentals. A big reason for this is the emerging potential of their industry and investor belief in executive leadership, look at Elon and renewable energy or Portnoy and mobile sports betting. Why should people treat a restructuring company with good liquidity, great executive leadership, and in an emerging industry any differently than we treat exciting startups or tech companies that aren't profitable? What's the difference between a company going through a significant and well calculated transformation vs a young new company IPOing?
Based on all of my fundamental analysis, I feel comfortable setting a price target and sell limit of $69,420.69, cause stonk. I'm so behind on my work from today because I can't stop thinking about gamestonk and watching the price and volume on Think or Swim. Diamond hands forever but I need a break for a few days. Let me know if my DD is shit, and someone please message me if we hit my PT this week and/or if Steve Cohen gets sent to Rikers, ty and power to the playerzzz

\*I AM IN NO WAY SHAPE OR FORM RECOMMENDING THAT YOU BUY, HOLD, OR SELL ANY SECURITY. I'M UNDER THE INFLUENCE OF SEVERAL LEGAL SUBSTANCES, DON'T ANY OF THIS SERIOUSLY. I AM USING PUBLICLY AVAILABLE INFORMATION TO EXPLAIN MY UNDERSTANDING OF A CORPORATIONS FINANCIAL PERFORMANCE AND OPENING A DISCUSSION FOR FUNDAMENTAL VS SPECULATIVE STONK PRICING.\*\

Moderator applies to college this year and hopes he can get in somewhere on his list

I've frequented this sub a lot over the past three years and love it as a repository alternative to stuff like AdmitSee out there. Great to add another to the database (that I will also update more as decisions roll in)
Demographics

Gender: M
Race/Ethnicity: AA ORM
Residence: SoCA
Income Bracket: 200k+
Type of School: Large, Public
Hooks (Recruited Athlete, URM, First-Gen, Geographic, Legacy, etc.): None

Intended Major(s): Anthropology, Economics, Business (for those with programs)
Academics

GPA (UW/W): 4.0/4.76
Rank (or percentile): 2
# of Honors/AP/IB/Dual Enrollment/etc.: 15
Senior Year Course Load: AP Calc BC, AP Lit, AP Stats, AP Physics C, Sociology (College), Political Science (College)

Standardized Testing
List the highest scores earned and all scores that were reported.

SAT I: 1540 (740RW, 800M)
ACT: N/A
SAT II: Bio E (800), Mathématique Deux (800)
AP/IB: APUSH (5), AP Calc AB (4), AP Bio (5), AP Euro (5), AP Chinese (self-studied) (4), AP Macro (self-studied) (4), AP Lang (5),
Other (ex. IELTS, TOEFL, etc.): N/A

Extracurriculars/Activities
List all extracurricular involvements, including leadership roles, time commitments, major achievements, etc.

Founder of Online Media Publication: Founded youth media org, grew to 100+ global team (10 countries) incl. web journalism, podcasts, videos; partnered w/youth advocacies (purposely vague) (3yrs)
National Clubs Executive for a chain of entrepreneurship clubs attached to a nonprofit entrepreneurship incubator: Selected at nonprofit's 2019 Summer Incubator (10% accept), pitched 2 biz, won $7K seed; joined org, manage 22 int’l clubs/ competitions, help student entrepreneurs pitch and find mentors (2yrs)
Co-founding Managing Partner of small consulting LLC providing GenZ branding, marketing and user experience services to improve client businesses; secured six contracts during 2020; founded with seed funding from (#2) (2yrs)
Director of Student Programs at a small international startup platform; Work w/founders to coordinate student ambassador program and enhance community interactions; founded coalition program connecting student NPOs on site to foster int’l collaboration and drive recruiting/publicity resources into verified site organizations. Paid position (in company shares, not salary), worked my way up from an online internship (2yrs)
Published Author and Misc. Freelance Writing/History Research Co-wrote book on loan surveying volunteer experiences published Jan 2020 over 3 years; research/wrote articles for various youth economics magazines and sites; submitted to Concord Review (hear back soon in time for RD apps hopefully); (4 yrs)
Podcast Host Co-host [redacted] podcast: interview students and admissions officers to discuss [redacted]; 50K views total (2 yrs)
Volunteer / Organizer for Economic Opportunity Initiative for Rural Farmers and small shopkeepers; Led teams to interview farmers and craft financial statements to successfully obtain agricultural loans; 200+ service hours (1yr)
Corporate Culture / Economics Research Intern with local university prof, Contributed to economics research on entrepreneurship, corruption and business politics; also conducted statistical analysis of insider trading rates by gender; acknowledgements in prof's published research (no co-author)(3 yrs)
FoundePresident of SciFair Club Started club to engage peers in research/competition; recruited professional mentors; cancelled mostly due to COVID but I was the top SciFair performer from my school 2yrs
FoundePresident of FBLA club (Formerly LaunchX in 10th grade) Founded schl’s first-ever club to explore entrepreneurship and career dev; grew to 30 members; mentored peers; achieved FBLA state qualifier 2020 (but then COVID) 2yrs

This was CA verbatim with some redactions.
Awards/Honors
List all awards and honors submitted on your application.

2nd Place in Entrepreneurship Incubator Competition (technically international?? just national), 5K seed money for my startup
President's Volunteer Service Award-Gold for 200+ hrs from volunteer work and being a mock juror for local law grad students
2nd Pl–Social Science State Science Fair; 2nd Pl- City Psychological Association for same Research; Monetary Award from Sigma Xi Research Honors Society
3rd Pl, City Asian-American association: Essay contest where I wrote & presented economic consequences of CA bill
One 1 (of 6) to represent school at Rotary Youth Leadership Award Conference (but then COVID)

Letters of Recommendation
I won't numerically rate my LoRs because... just how would I do that?
Entrepreneurship Mentor (CEO): Had a very strong relationship with him, he provided and advanced a lot of my extracurricular opportunities and he was from the entrepreneurship incubator (gave me a scholarship to attend). He wrote letters for a few other students a year above me at the incubator and they were admitted to Harvard, JHU, Purdue, NYU Stern. Those other students say I was his favorite.
AP Phys Teacher: Well enough, I've known him for 4 years and he's well aware of my entrepreneurial activities and podcasting (actually had him on the podcast once). Generally on amicable terms, been good and ambitious student.
APUSH Teacher: Only takes 10 LOR requests a year, I requested mine a year in advance. Very good terms, probably one of best students in our APUSH class. Had out of class conversations that espoused my personality. Aware of my writing and my authorship.
Peer (for Darty): Co-founder in firm, went through a lot together at entrepreneurship incubator and later reconnected as mentors in same incubator. Read it myself and its quite professional for a peer rec.
Interviews
UPenn: Not great, really didn't click. She was a doctor who was really questioning my want to go to big city Philly and asked me verbatim what I did for fun again (after my initial response of fall into Wikipedia rabbit holes and podcast) with a straight face. Never making that mistake again.
Duke: Pretty good, was able to make them laugh at end, had an engaging conversation about Duke entrepreneurship and leadership programs.
Princeton: Recent grad who was probably the best so far, she described me as a "gift to the world" (flattered) and she said she was impressed by my responses compared to other applicants. She said to update her on my decision in April.
Harvard: Would say it was good. Really stoic guy who was in President Clinton's cabinet, had an engaging conversation about journalism and the new media forces (Vox, ProPublica) and my ambition to do the same. Ended with a bit about him talking about imposter syndrome as his biggest dislike with his Harvard experience.
Stanford: Short (~40 min) where halfway through interview I became the interviewer. Talked a lot about her daughter who was a Stanford senior and the easily accessible small research grants. Apparently she welcomes the ~60-70 Stanford admitted students every year with a reception at her home.
Dartmouth: Really down to earth conversation with a guy, standard interview questions, he still sends me material and updates from Dartmouth here and there now based on things I said in our interview (like swim team changes, pitching opportunities). I also update him in April.
MIT: Fairly standard interview. Nothing really to note here, talked about my journalism and my view on media for the most part.
Essays
After being rejected by Penn, I think I went through maybe like 15 CA drafts in total but only the last two mattered. I applied to half my colleges with one CA draft (that I thought showed how I thought, albeit maybe not as personal as I wanted it). I ended up applying to all the colleges with deadlines 1/3/20 and after using my Harvard supp as my CA since a friend and a college counselor both read it, suggested no changes, and said it was my best work. All sups went through 2-4 drafts and were reviewed by either my friend or college counselor. I had half of them coming into Winter break then I crammed out the rest during break. I'm proud of my CA essays and most of my sups and have realized throughout all my revising and editing, that I lost a great deal of my own voice in the essays that I initially sent to Penn. Which is why I resolved to keep editing minimal and my original voice a priority in my later essays (and rewrote my CA).
Decisions (indicate ED/EA/REA/SCEA/RD)
Acceptances:

None yet

Waiting On:

UCI
UCSD
UCLA
UCB GMP (no interview yet)
NYU
USC Merit
Ivies
Northwestern
UChicago
Duke
MIT
Vandy

Rejections:

ED Penn Wharton

Additional Information:
There was quite a bit of new info in additional info on CA and stuff that I plan on updating my colleges with soon:
In March, I was selected for a 12-person cohort in a career development program following my entrepreneurial activities where I was selected to participate in funded projects ranging from Harvard case studies and startups. This was discontinued owing to the COVID pandemic but will be resuming the latter half of my senior year.
I was interviewed by major news networks (November 2020) about the launch of the entrepreneurial incubator clubs chapters in the midst of COVID-19, interview expected to be in outlets like USNews and the like in February (Hopefully in time for RD)
I was invited to join the student council of a social science research program for high school students around the world, hosted by the World Federation of United Nations Associations (WFUNA) on the basis of my journalism and the entrepreneurship incubator clubs program. This just began this February and am currently meeting with the director.
So yeah, this is where I'm at and hopefully I'll get a yes from one of my reaches. This year is super unpredictable though, so if you're reading this in the future, you might want to note that (25-75% app increases at most selective schools). If you're curious about my ECs or whatever, pm me. I'll be active on this sub (as I also have moderating duties lol). I still have a bit of EC work to do regarding my February updates.

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