Investment Pitches

Pitch Summary:
Former senior executives filed suits alleging accounting fraud, inflated projections, and retaliation for raising concerns; founders sold 10,000 shares daily after IPO lockup; shareholders diluted by ~80%; software/R&D over-capitalization, inflated cash-flow forecasts;

BSD Analysis:
Backblaze markets itself as a low-cost cloud storage provider with a focus on simplicity. The short thesis centers on scale disadvantages versus hyperscalers (AWS, Azure, GCP), which compress margins and make it difficult to compete on both price and features. Customer acquisition costs are rising as competition intensifies, while churn is often understated given the ease of switching in cloud storage. Gross margin expansion is unlikely without scale, and persistent cash burn suggests recurring capital raises. For sophisticated investors, BLZE represents a case study in subscale SaaS infrastructure struggling to carve out a durable niche.

Pitch Summary:
Watches of Switzerland is a retailer and partner to Rolex and other luxury watch brands. We believe most of the company's value lies in its relationship with Rolex, which only sells through authorized retailers like WOSG who act as gatekeepers to the Rolex universe. That relationship gives WOSG far superior economics to a typical retailer, a result of lengthy customer waiting lists, no online competition, and no inventory risk. WOSG's management are competent, experienced, and well incentivized, with CEO Brian Duffy owning nearly £30mm worth of stock. We first bought shares around £3.5 last year, it peaked at £6.0 late last year and now trades around £3.5 again and on 9x this year's FCF. We think intrinsic value in three years will be more than double today's price and you can view our 35-page report on the company here. When we initially invested in WOSG the stock had sold down heavily after Rolex acquired another retailer and the prices of watches on the secondhand market began declining after the luxury watch bubble burst in early 2022. Our thesis was that WOSG's relationship with Rolex would continue to strengthen and that declines in the secondhand market had very little effect as WOSG primarily sold new watches. We believe the market eventually agreed with our thesis as the stock appreciated from £3.5 to £6.0 late last year. The stock has declined heavily since then on fears that declining demand for luxury watches will hurt WOSG sales. These concerns were then exacerbated by the US placing a surprisingly high 31% tariff on Swiss imports, despite Switzerland having almost no tariffs on the US. We believe that these new fears are also overdone. While declining demand and a now reduced 10% tariff will undoubtedly hurt WOSG's earnings, we think the impact will be far less than what the stock is pricing in. Around 75% of WOSG's profits by our estimates come from Rolex and Patek Philippe sales. Sales in those brands are mostly driven by supply rather than demand because customers often have to register their interest in a watch months or even years before they are offered a chance to buy it. That means Rolex and Patek effectively sell as many watches as they want to make. The effect of lower demand is likely to be a reduced wait time rather than fewer sales. Our customer data suggests that waitlists in the US in particular remain strong and WOSG's trading update in February (before tariffs were announced) reiterated guidance for continued momentum in the US and stabilization in the UK. We attended the industry's biggest trade show, held in Switzerland, shortly after tariffs were announced to better understand the impact on brands and WOSG. Our conclusion is that Rolex has substantial pricing power and that a 31% tariff reduces WOSG's US profits by around 30% and a 10% tariff reduces it by around 10%. Since the US is half of the company's business that translates to a reduction at the group level of 15% and 5% respectively. While these reductions are certainly a headwind, we believe Rolex and WOSG will manage through them effectively and that the long-term growth of the companies remains largely unchanged. Any downturn would likely also result in WOSG acquiring mom & pop competitors and therefore gaining market share permanently. We continue to believe that WOSG's economics are closer to a subsidiary of Rolex than a retailer and that the company is a structural winner trading at a very attractive price. We added to our position recently and after tariffs were announced.

BSD Analysis:
Plural Investing views Watches of Switzerland as a unique luxury retail play with economics more akin to a Rolex subsidiary than a traditional retailer. The investment thesis centers on WOSG's exclusive authorized dealer relationship with Rolex and Patek Philippe, which generates 75% of profits through supply-constrained brands with lengthy waiting lists and no inventory risk. The manager believes recent tariff concerns are overblown, estimating a 10% tariff reduces group profits by only 5% given Rolex's substantial pricing power and supply-driven sales model. Trading at 9x free cash flow with CEO Brian Duffy owning £30 million in stock, the company offers compelling alignment and valuation. The manager conducted primary research at Switzerland's largest trade show to validate the tariff impact and believes any downturn will enable WOSG to acquire smaller competitors and gain permanent market share. With strong US waitlists persisting and UK operations stabilizing, the structural advantages of the Rolex partnership should drive long-term outperformance despite near-term headwinds.

Pitch Summary:
Seaport Entertainment was spun out of Howard Hughes in July 2024 and is a complex group of loss-making properties primarily in Lower Manhattan that Howard Hughes invested $1.5bn into. Seaport trades for a market cap of $230mm and has net cash. Our thesis is that a couple of the stabilized properties are worth the market cap, while the new and aligned management team will be able to turn around several of the other key buildings. We first bought shares in the company at $27, the stock trades at $18 today having declined 31% this year, and we believe intrinsic value in three years will be around $50. We published our 35-page thesis on the company in November here and discussed our latest thesis on a podcast here. Seaport published Q4 results in March that showed the company continued to be heavily loss making. The stock sold off because of that and then declined with the broader market on the announcement of tariffs despite tariffs having no material impact in our view. We thought significant losses in Q4 were unsurprising given the substantial changes new management have made took place after the quarter ended and this was a seasonally slow period for the company. We think investors are missing the big picture by focusing on short term losses. Seaport owns prime real estate in New York that suffered from a misplaced strategy by its former owner Howard Hughes, and its future success will depend on how well new management are able to turn key buildings in the neighborhood into consumer concepts with mass market appeal. We have been very impressed with how quickly new management have made major changes at those key buildings. At Pier 17, in our opinion by far Seaport's most valuable asset, management announced at results that it had signed a 20-year lease for most of the previously unused office space. The lease is with Meow Wolf, an immersive art installation that has been a success at all five other locations in the US. The locations of a similar size to the New York space have each attracted over one million visitors annually. We wrote in our initial investment thesis that the most important factor to a turnaround at Seaport succeeding was whether management could put a consumer concept in the empty space at Pier 17 that attracts over one million visitors per year, and it seems like they have successfully done so. These visitors will likely spend at the surrounding restaurants, retail stores, and entertainment venues that Seaport owns, thereby improving the company's economics far beyond Meow Wolf's lease payments. Management have also made other changes that are yet to kick in, such as: • Expanding rooftop concerts at Pier 17 throughout the year • Leasing out the unproductive restaurant space at Pier 17 to a new concept • Substantially cutting costs and shutting unsuccessful concepts at the Tin Building • Putting 250 Water St up for sale • Provisionally winning a bid to take over a successful restaurant in Bryant Park None of the benefits from these changes were felt during Q4 and most will take several quarters to become clear. But our confidence that management will successfully realize the value in Seaport's properties has significantly increased and so we added to our position in the quarter.

BSD Analysis:
Plural Investing presents a compelling turnaround thesis for Seaport Entertainment, a Manhattan real estate company spun out of Howard Hughes in July 2024. The manager believes the market is overly focused on near-term losses while missing the transformational changes new management is implementing. The key catalyst is the 20-year lease signed with Meow Wolf for Pier 17's previously vacant office space, an immersive art installation that attracts over one million visitors annually at similar locations. This visitor traffic should drive meaningful spillover revenue to Seaport's surrounding restaurants, retail, and entertainment venues. Management is also expanding rooftop concerts, optimizing restaurant concepts, cutting costs at the Tin Building, and monetizing non-core assets like 250 Water Street. Trading at a $230 million market cap with net cash, the manager sees intrinsic value reaching $50 per share within three years versus the current $18 price. The investment represents a classic value play on prime Manhattan real estate with new management executing a consumer-focused repositioning strategy.

Pitch Summary:
Glass House has come to an interesting crossroads. The company will soon determine whether to not only to expand their cannabis flower production, but also to expand into hemp flower production. Hemp flower, if it follows 2018 Farm Bill guidelines, is federally legal and can be shipped across state lines. The whole potential of Glass House is that one day they may be able to ship product across state lines and utilize the full capacity of their Ferrari of greenhouses. I recently had the chance to interview the management team and talk to them about the future. We are staying laser focused to see what happens as it could be a major unlock in value for the company and shareholders.

BSD Analysis:
The manager views Glass House as positioned at a critical inflection point with significant optionality through potential hemp flower expansion. The key investment thesis centers on the company's ability to leverage its high-quality greenhouse infrastructure, described as a "Ferrari of greenhouses," for interstate commerce opportunities. Hemp flower production under 2018 Farm Bill guidelines would enable federal legality and cross-state shipping capabilities, dramatically expanding the addressable market beyond current state-limited operations. This strategic pivot could unlock substantial value by allowing Glass House to utilize full greenhouse capacity rather than being constrained by single-state demand. The manager's direct engagement with management through recent interviews demonstrates active monitoring of this strategic decision. The investment represents a call option on regulatory arbitrage and operational leverage, where successful hemp expansion could transform the company's economics. The manager maintains a bullish outlook contingent on management's strategic execution of this expansion opportunity.

Pitch Summary:
Driving some of our recent downside performance was Grown Rogue, which previously had been wildly outperforming other cannabis stocks. The stock sold off after their Q4 earnings confused some investors and, in an environment where most cannabis stocks are down 40-50% for the year, the reaction from some investors was to shoot first and ask questions later. We think all of this was a big misunderstanding as to the long-term value of Grown Rogue and are still quite bullish. We took advantage of the selloff and bought more shares. You can read more about our thoughts about what happened and watch our interview with the CEO, Obie Strickler as well. In summary, we continue to believe in Grown Rogue's unit level economics and its business model. And I believe this model can be replicated in many new states for phenomenal ROIC for investors to enjoy. Part of growing up is realizing that not all investors may understand your story. Sometimes quarters are noisy and there are a lot of moving parts that create confusion. And it's important to tell your story and tell it in a way that investors will understand. Luckily for investors, Grown Rogue is starting to flex its growth muscles and start to really grow, and there should be tangible evidence of this when they report Q1 in about a month. With the company poised to double its cash flow this year, the stock after its recent decline trades at about 4 times my estimate of EBITDA. The company, when it hosts its first conference call is about to get its awkward teenage braces off and the company's growth should shine for all to see.

BSD Analysis:
The manager maintains a bullish stance on Grown Rogue despite recent underperformance, viewing the selloff as a misunderstanding of the company's long-term value proposition. The fund took advantage of weakness to add to their position, demonstrating conviction in the investment thesis. The manager emphasizes Grown Rogue's superior unit economics and low-cost production model, which provides competitive advantages during market downturns and positions the company to gain market share as competitors struggle. The business model's replicability across new states offers significant return on invested capital potential for future expansion. At current levels, the stock trades at approximately 4x estimated EBITDA despite expectations for doubled cash flow this year, suggesting attractive valuation metrics. The upcoming Q1 earnings and first conference call are viewed as catalysts that will provide tangible evidence of the company's growth trajectory. The manager's confidence stems from the belief that Grown Rogue's competitive positioning as a low-cost producer will drive market share gains and profitability expansion.

Pitch Summary:
In January, we exited our position in Berkshire Hathaway on success. The shares were trading significantly above our estimated intrinsic value, and we needed to create capacity for a new investment in Royalty Pharma (RPRX), as the portfolio was at its 20-position limit. Royalty Pharma funds promising drug candidates in early clinical stages by purchasing royalties, which represent a percentage of future sales once these drugs reach the market. RPRX holds a unique position as the only publicly traded pharmaceutical royalty company. It went public in 2020 during the pandemic and has been largely overlooked, likely because its business model contrasts sharply with other pharmaceutical peers. This neglect is surprising, as royalty businesses are generally favored in other industries due to their high margins and stable recurring revenue streams. What makes RPRX even more attractive is its dominant position within the drug royalty industry. Holding a significant 56% market share, it is the leading acquirer of biopharmaceutical royalties. RPRX is often the first call for pharmaceutical companies seeking funding. For larger royalty transactions exceeding $500 million, the company faces virtually no competition, establishing it as the primary partner for drug companies looking to monetize their drugs to alleviate the financial burden of expensive Phase 2 and 3 clinical trials. This "first call" status grants RPRX access to the most promising and lucrative opportunities, further strengthening its already robust portfolio. Notably, RPRX has funded 15 royalties that ultimately became blockbuster drugs, each generating over $1 billion in annual sales. RPRX Management has a 28-year track record of selecting winning drug candidates that has generated returns in the low teens and compounded royalty revenues by 13% annually. They possess a keen eye for identifying therapies with strong market potential. This proven track record instills confidence in the company's ability to grow their royalty stream well into the future. Despite its strong market position and history of delivering attractive investor returns, the stock had been trading around $30 per share, representing a price-to-earnings ratio of just 5-7.5x based on our estimated normal earnings power of $4 to $6 per share. Our analysis suggests that the existing royalty stream from drugs currently on the market is worth between $35 and $41 per share alone, offering a significant margin of safety. When factoring in their pipeline of royalties on drugs still in clinical trials and future growth prospects, we believe the intrinsic value of RPRX lies within a range of $40 to $78 per share. This indicates substantial upside potential from our initial purchase price of $30 per share.

BSD Analysis:
Pelican Bay Capital Management initiated a position in Royalty Pharma (RPRX) after exiting Berkshire Hathaway, viewing RPRX as an undervalued opportunity in the pharmaceutical royalty space. The manager highlights RPRX's dominant 56% market share and unique position as the only publicly traded pharmaceutical royalty company, making it the "first call" for drug companies seeking funding for expensive clinical trials. The investment thesis centers on RPRX's proven 28-year track record of selecting winning drug candidates, having funded 15 blockbuster drugs generating over $1 billion annually each, with management compounding royalty revenues at 13% annually. The valuation appears compelling at the $30 purchase price, trading at just 5-7.5x estimated normal earnings of $4-6 per share. The manager's analysis suggests the existing royalty stream alone is worth $35-41 per share, providing significant downside protection. Including pipeline royalties and future growth prospects, intrinsic value is estimated at $40-78 per share, indicating substantial upside potential from the entry point.

Pitch Summary:
Redcare is the leading player in a two-firm duopoly benefiting from Germany’s mandated digital e-prescription (eRx) rollout. With paper prescriptions phased out in 2024 and NFC/CardLink verification launched, eRx adoption has rapidly accelerated — Redcare’s share grew from 27bps pre-launch to 82bps by early 2025. This digitization opens a €55–60B prescription market where even 10–15% online penetration equates to €10B+ in new sales potential. Redcare’s profitable international and OTC businesses (together >€2.5B sales) provide a financial cushion as eRx scales. Its main rival, DocMorris, is hampered by liquidity issues, giving Redcare a clear leadership advantage as patient cohorts show higher lifetime values and repeat order frequency. At just €2.6B EV, Redcare trades below the future earning power implied by even moderate eRx penetration. Management targets >8–10% EBITDA margins at scale; if achieved, 15% eRx penetration could generate ~€1B EBITDA — implying a €600/share valuation at 12× multiple (~5× upside). Structural tailwinds include chronic-medication refills, pharmacy closures, and digital health integration (ePa). Competitive and regulatory barriers — strict licensing, fixed Rx pricing, and Gematik integration — limit new entrants and protect incumbents. With mandated digital adoption, Redcare is positioned as the de facto platform for prescription delivery in Europe’s largest healthcare market.

BSD Analysis:
Largest online pharmacy in Germany and the EU, focused on OTC and Rx prescriptions via e-commerce; benefits from eRx digital transition. Thesis: Government-mandated digitization turns a niche mail-order pharmacy into a €10B+ addressable Rx market; Redcare’s early mover status, logistics scale, and brand recall make it the structural winner. Valuation: EV €2.6B vs. potential €1B EBITDA in 2029 at 12× = €600/share fair value; consensus severely underestimates penetration/margin expansion. Moat: Fixed-price Rx regime, regulatory protection, logistics know-how, and Gematik certification form high entry barriers. Risks: Slower eRx adoption (<5%), higher logistics or marketing costs, Amazon/DM entry attempts, or regulatory rollback. Catalysts: Sequential eRx market-share gains, digital health adoption (ePa), chronic repeat-script rollout, and DOCM share loss.

Pitch Summary:
We continue to hold a large position in Wise, our cross-border money transfer business. Like Medley, Wise is the cheapest, fastest, and most user-friendly service in its category – offering unmatched transparency in a market long plagued by hidden fees and poor UX. It is attacking a massive addressable market with durable competitive advantages yet has captured only low-single-digit share to date. At its April 3rd Investor Day, Wise laid out a bold vision to scale from £145 billion in FY25 cross-border volume to trillions of pounds over the next decade – positioning itself as the global infrastructure layer for moving money. As a reminder from our investment thesis (link), Wise serves three customer groups – individuals, SMBs, and corporations – while delivering the same core value proposition: speed, cost, and transparency. Among individuals, Wise now has 8.8 million active users (+18% y/y), moving £106 billion (+21%) and generating £1.2 billion in revenue (+16%). The service is incredibly efficient at new customer acquisition, given that two-thirds of new customers arrive via word of mouth. Furthermore, most customers begin with simple money transfer but then tend to quickly adopt additional services such as multi-currency accounts and debit cards, which add another layer of growth at minimal incremental cost to acquire or serve. This £3 trillion market remains deeply underpenetrated, with Wise holding just 5% share, a proportion that is growing capital efficiently with each passing year. Among SMBs, 453,000 customers (+15%) moved £38.9 billion LTM (+24%), generating £435 million in revenue (+11%). Once Wise Business was only a secondary FX solution, but it is now evolving to become many SMBs primary banking solution – handling payments, invoicing, payroll, and interest-earning balances. With integrations across accounting tools and local payment rails, Wise Business is the low-cost solution for global SMBs. This £14 trillion market remains largely untapped, with Wise under 1% share. Wise Platform – the enterprise segment – is the biggest long-term lever. It offers white-label FX infrastructure to large digital banks (e.g. Monzo, Nu Bank, N26), online platforms (e.g. Interactive Brokers, Brex, Ramp), and increasingly, global banks (e.g. Standard Chartered, Morgan Stanley, Itaú). This segment represents ~£15 trillion in annual cross-border volume. After years of investment in enterprise-grade capabilities, Wise has finally begun gaining meaningful traction. As larger institutions continue to migrate towards Wise Platform, the pressure mounts on others to follow suit, lest they fall behind on cost and UX. Importantly, Wise doesn't need to win every large bank in the world – its current partners already represent significant volume potential – but each additional win has the potential to expand its future volumes and revenues by many multiples of its existing size. To close the Investor Day, CEO Kristo Käärmann said the following: "We have every reason to be enthusiastic about this relentless expansion… But we are not in this position by accident, it is a result of over a decade of taking the hard options over the easy ones. It's building infrastructure over gimmicks. It's avoiding distractions, embracing local laws and regulations, financial prudence and steady prioritization of customer outcomes. And the success that we talked about today, it didn't really come overnight. It came over a long term. And it comes through us maintaining our focus on this mission. I think the next 10 years are not going to be easier than the last 14, and they will demand no less discipline in adhering to our principles. But you are in a company like no other in recent history, one that has set the foundations to eventually fix how money works across borders, across national borders for people and for businesses. And it's your support as owners we will keep our focus on becoming the network for the world's money. And this is the point at which both customer and shareholder value are at the greatest and the most aligned." Kristo and the team laid out a vision for a more than 10x increase in volume, yet the tone was anything but promotional. Words like "discipline," "financial prudence," and "shareholder value" were used deliberately. From transcripts, third-party research, and conversations with former employees, this appears to be a genuine part of the company's DNA – not just window dressing for the investment community. At ~30x underlying PBT, 15–17x reported PBT and with ~100% conversion of reported PBT to free cash flow, we're not betting on a binary outcome around Wise's long-term vision. Rather, we're buying a high-quality business with durable advantages, a long reinvestment runway, and attractive returns on incremental capital at a modest multiple relative to its growth. The upside is substantial and the downside appears limited: the company has no debt, and any valuation risk stems from fundamentals and market-assigned multiples. In the event of a global downturn and/or a shift towards global isolationism, Wise's cross-border volumes could be adversely affected, however they should continue to gain market share at a high clip thanks to its low-cost, customer-aligned model.

BSD Analysis:
The manager maintains a strong bull thesis on Wise, emphasizing its position as the lowest-cost, fastest, and most transparent cross-border money transfer service in a market historically plagued by hidden fees and poor user experience. The investment case rests on Wise's massive addressable market opportunity across three customer segments totaling over £30 trillion in annual volume, while currently holding minimal market share. The individual segment shows strong momentum with 8.8 million active users growing 18% annually, moving £106 billion and generating £1.2 billion revenue, with efficient viral customer acquisition and expanding service adoption. The SMB segment represents significant untapped potential in a £14 trillion market where Wise holds under 1% share, evolving from secondary FX solution to primary banking infrastructure. The enterprise Wise Platform segment offers the greatest long-term leverage, providing white-label infrastructure to major financial institutions in a £15 trillion market with accelerating adoption creating competitive pressure. At 15-17x reported PBT with 100% free cash flow conversion, the manager views the valuation as modest relative to growth potential and reinvestment runway. The combination of durable competitive advantages, disciplined management, debt-free balance sheet, and substantial market share gains opportunity creates an attractive risk-reward profile despite potential macro headwinds.

Pitch Summary:
Medley is our largest position at cost. The company operates two high-quality businesses in Japan: a dominant online healthcare jobs marketplace (HR PF) and a growing software segment (Medical PF) that provides mission-critical software to hospitals, clinics, pharmacies, and dental offices. The HR PF segment generated ¥21 billion (~$150 million) of revenue last year at a 42% EBITDA margin. Thus far, HR PF has proven to be very difficult to compete with: the product is cheaper, easier to use, and more effective than alternatives, consistently delivering a higher volume of qualified candidates per listing. While Medley has just 5% market share of total healthcare job transitions, its high customer retention with increasingly larger customer cohorts suggests a long runway for continued industry consolidation. Medical PF operates in a more competitive landscape but offers similar potential. Medley's EMR software, in particular, has high switching costs, and the company is expanding both organically and via low-multiple acquisitions. Win rates are high, and earnings are beginning to inflect upward. The company is on pace to hit its 2029 mid-term targets of ¥100 billion in revenue and ¥20 billion in EBITDA, implying a 30% revenue CAGR and 36% EBITDA CAGR. Nearly all of EBITDA has historically converted to free cash flow. At ~17x NTM cash earnings, the current valuation is too low given the growth and profitability profile. If Medley reaches ¥20 billion of FCF and trades at 20x, it could be worth ¥400 billion (¥12,315 per share) – around 4x today's price – with further upside, as that would still reflect only 10–15% market share in its core verticals. Importantly, Medley is insulated from many of the macroeconomic risks facing global markets. Its services are mission-critical within a non-cyclical, domestically focused industry, positioning it to remain resilient across a wide range of global scenarios. Furthermore, Medley is led by its Founder, Kohei Takiguchi, who retains 18% ownership of the company and who, according to multiple calls with former Medley employees, is maniacally cost conscious, tracking every penny of expenses and requiring a high IRR to greenlight new initiatives; a rare trait among Japanese Executives.

BSD Analysis:
The manager presents a compelling bull case for Medley, positioning it as the largest holding at cost with a clear path to significant value creation. The investment thesis centers on two complementary business segments: a dominant healthcare jobs marketplace (HR PF) generating ¥21 billion revenue at 42% EBITDA margins, and a growing medical software platform (Medical PF) with high switching costs. The manager highlights Medley's competitive moat through superior product quality, cost advantage, and effectiveness in delivering qualified candidates, despite holding only 5% market share in healthcare job transitions. The company's ambitious 2029 targets of ¥100 billion revenue and ¥20 billion EBITDA imply exceptional growth rates of 30% and 36% respectively, with strong free cash flow conversion. At 17x NTM cash earnings, the manager sees significant undervaluation, projecting potential 4x upside to ¥12,315 per share if the company achieves 20x FCF multiple. The defensive characteristics include mission-critical services in non-cyclical healthcare, domestic focus insulating from global trade tensions, and founder-led management with 18% ownership and disciplined capital allocation. The combination of growth, profitability, competitive positioning, and valuation discount creates an attractive risk-adjusted opportunity.

Pitch Summary:
First Advantage is the leading provider of employment background checks. In 2024, it acquired Sterling Check, the second-largest player, creating a market leader with ~25% share—twice the size of the next competitor. We believe this is a good business in a steady-growth industry, with three compelling idiosyncratic drivers which make it an unusually attractive investment: 1. Cyclical Recovery Ahead The industry has been in a downturn tied to reduced hiring volumes for 2 years. As hiring trends normalize and eventually return to growth, First Advantage will begin to experience multi-year tailwinds. We believe we're near a cyclical trough meaning we have minimal downside and disproportionate upside. 2. Underappreciated Synergies Management initially guided to $50M in synergies from the Sterling deal, which has since been revised upward to $60–70M. We believe the cost synergy opportunity exceeds $100M, representing an incremental 10%+ EPS uplift. The logic of combining both businesses to unlock material synergies is sound and we believe will drive more shareholder value than the market currently expects. 3. Material EPS Growth via Deleveraging FA funded the acquisition with $2.2B of debt (current leverage: ~5x net debt to EBITDA) and 27M new shares. With roughly half the debt floating at 7.5%, deleveraging to 3x over the next few years will significantly increase EPS. Today, First Advantage trades at just 10x our estimate of 2026 EPS. We believe the business can grow earnings over 20% annually without any incremental M&A or share buybacks, which should lead to multiple expansion. Our 5-year target of ~$75 implies a ~400% return from current levels and is based on a 25x multiple on 2030 EPS of $3.00.

BSD Analysis:
The manager presents a compelling multi-factor thesis for First Advantage centered on the transformational Sterling Check acquisition creating a dominant market leader with 25% share. The investment case rests on three key drivers: cyclical recovery from a two-year hiring downturn, underappreciated cost synergies exceeding $100 million, and significant EPS growth through deleveraging from 5x to 3x debt-to-EBITDA. The manager believes the market underestimates synergy potential, with management guidance already revised upward from $50 million to $60-70 million. The deleveraging story provides additional EPS uplift as floating rate debt at 7.5% gets paid down. At 10x estimated 2026 EPS, the valuation appears attractive for a market-leading business in a steady-growth industry. The 5-year price target of $75 implies a 400% return based on 25x 2030 EPS of $3.00, suggesting significant multiple expansion potential as the integration story unfolds.

Pitch Summary:
Wayfair – Wayfair's Q4 revenue was flat year-over-year, and its Q1 outlook called for modest improvement, which was slightly below expectations, reflecting continued softness in the home goods market. Despite near-term headwinds, we remain confident in Wayfair's long-term potential and see significant upside as the category gradually normalizes.

BSD Analysis:
The manager maintains a bullish long-term view on Wayfair despite acknowledging current challenges in the home goods market. Flat Q4 revenue and modest Q1 improvement guidance reflect broader category weakness rather than company-specific issues. The manager's confidence stems from Wayfair's market-leading position in online home goods retail and expectation of category normalization. The thesis appears to be based on cyclical recovery potential as the home goods market eventually rebounds from current softness. While near-term performance may remain challenged, the manager sees significant upside once market conditions improve. This represents a contrarian bet on Wayfair's ability to benefit disproportionately from category recovery given its scale and market position. The investment appears predicated on timing the cyclical bottom in home goods demand.

Pitch Summary:
Revolve – Revolve Group delivered a strong Q4 2024, with net sales up 14% year-over-year to $293.7 million and net income more than tripling to $11.8 million, driven by improved marketing and logistics efficiency, lower return rates, and expanded gross margins. While Q1 guidance was slightly below expectations due to a temporary marketing pause related to wildfires in its core LA market, our long-term thesis remains intact.

BSD Analysis:
The manager maintains confidence in Revolve despite short-term headwinds, emphasizing strong Q4 2024 fundamentals with 14% net sales growth to $293.7 million. The tripling of net income to $11.8 million demonstrates significant operational improvements and margin expansion. Key operational metrics including improved marketing efficiency, logistics optimization, lower return rates, and expanded gross margins indicate a maturing business model. The temporary marketing pause due to LA wildfires is viewed as a one-time event rather than a structural issue. The manager's emphasis on the intact long-term thesis suggests confidence in Revolve's competitive positioning in online fashion retail. The combination of revenue growth and dramatic profit improvement validates the company's operational leverage. This represents a conviction hold through temporary market volatility based on strong underlying business fundamentals.

Pitch Summary:
HelloFresh – HelloFresh reported FY 2024 adjusted EBITDA of €399 million on €7.7 billion in revenue, highlighting the strong early results of its strategic pivot toward efficiency, higher-value customers, and disciplined marketing. In Q4, revenue grew modestly in constant currency (+0.9%) as the company intentionally moved away from low-quality volume growth, leading to notable Adjusted EBITDA margin expansion—especially in the Meal Kit segment. For 2025, HelloFresh is guiding to a ~65% increase in adjusted EBIT, even as revenue is expected to decline by 5%, reflecting a continued focus on long-term profitability over top-line growth. The increased revenue decline was not taken positively by the market, but we believe this disciplined approach is positioning HelloFresh for sustained value creation and makes it a compelling long-term investment.

BSD Analysis:
The manager views HelloFresh's strategic pivot toward profitability over growth as a positive long-term development, despite market skepticism. The company's FY 2024 performance with €399 million adjusted EBITDA on €7.7 billion revenue demonstrates improving unit economics. Management's intentional shift away from low-quality volume growth toward higher-value customers is driving notable EBITDA margin expansion. The guidance for 65% adjusted EBIT growth in 2025, despite a 5% revenue decline, showcases the company's operational leverage and margin improvement potential. While the market reacted negatively to revenue guidance, the manager believes this disciplined approach positions HelloFresh for sustainable value creation. The focus on efficiency and customer quality over pure growth metrics aligns with long-term shareholder value maximization. This represents a contrarian bet on HelloFresh's transformation into a more profitable, sustainable business model.

Pitch Summary:
Uber – Uber posted its strongest quarter yet, with gross bookings rising 18% year-over-year to $44.2 billion and revenue growing 20% to $12.0 billion. Adjusted EBITDA jumped 44% to $1.8 billion, fueled by record demand across both Mobility and Delivery, while free cash flow reached $1.7 billion. Exceeding its three-year financial targets, the company heads into 2025 with accelerating momentum and emerging upside from autonomous vehicles. Uber's growing free cash flow profile is attracting broader investor attention—including a recent investment from renowned value investor Bill Ackman. Our investment thesis remains intact.

BSD Analysis:
The manager maintains strong conviction in Uber, citing the company's strongest quarterly performance with impressive scale metrics including $44.2 billion in gross bookings and $12.0 billion in revenue. The 44% jump in adjusted EBITDA to $1.8 billion demonstrates significant operational leverage and margin expansion. Strong free cash flow generation of $1.7 billion validates the business model's cash conversion capabilities. The company's ability to exceed three-year financial targets ahead of schedule indicates management's execution prowess and conservative guidance approach. Emerging autonomous vehicle opportunities provide additional upside optionality beyond the core business. The recent investment from Bill Ackman serves as third-party validation of the investment thesis. The manager views Uber's transformation into a profitable, cash-generative platform as attracting broader institutional interest and supporting multiple expansion.

Pitch Summary:
Carvana – Carvana posted an outstanding fourth quarter, with retail cars sold up 50% year-over-year and revenue rising 46%, making it the company's second-best quarter ever for sales. Profitability reached record levels, with net income of $159 million and an adjusted EBITDA (Earnings before interest, taxes, depreciation and amortization) margin of 10.1%—capping off 2024 as Carvana's first year of consistent quarterly net income. While some investors remain cautious due to its leveraged balance sheet, we believe those concerns will diminish as profitability continues to scale. In our view, Carvana is well on its way to becoming a widely recognized, high-quality business with meaningful long-term upside.

BSD Analysis:
The manager presents a compelling turnaround story for Carvana, highlighting exceptional Q4 performance with 50% growth in retail cars sold and 46% revenue growth. The achievement of consistent quarterly profitability throughout 2024 marks a significant inflection point for the company. Record net income of $159 million and 10.1% adjusted EBITDA margin demonstrate operational leverage and improving unit economics. While acknowledging balance sheet concerns from cautious investors, the manager believes scaling profitability will alleviate these worries over time. The thesis centers on Carvana's transformation from a growth-at-all-costs model to a profitable, sustainable business. The manager views current skepticism as an opportunity, expecting broader market recognition as the company continues to demonstrate consistent profitability. This represents a high-conviction bet on the online used car market's long-term potential.

Pitch Summary:
ThredUp – As highlighted in our Q4 letter, ThredUp preannounced strong results in January, pointing to a meaningful acceleration in both revenue growth and margin expansion. In March, the company issued conservative 2025 guidance, which we believe positions it well to continue to outperform market expectations. Due to having a market cap of just $400 million, ThredUp remains largely under the radar—but we expect that to change over the next 12–18 months as its improving fundamentals attract broader investor attention. It's currently a top three position in the portfolio, and we believe its best days remain ahead.

BSD Analysis:
The manager maintains a strong bullish stance on ThredUp, emphasizing the company's accelerating revenue growth and margin expansion as key drivers. With a modest $400 million market cap, the fund views ThredUp as an undervalued opportunity that remains under institutional radar. The conservative 2025 guidance is seen as a strategic positioning that allows for consistent outperformance of expectations. The manager expects broader investor recognition over the next 12-18 months as fundamentals continue to improve. As a top three portfolio position, this represents a high-conviction bet on the online resale market's growth potential. The thesis centers on ThredUp's operational improvements translating into sustained financial outperformance. The manager's confidence is reinforced by the company's recent strong preannouncement and improving operational metrics.

Pitch Summary:
We have been shareholders of Amazon for quite a few years now. In fact, it is the only mega cap tech business that we own. Not that companies like Microsoft, Google or Meta aren't remarkable businesses with loads of market power and high incremental returns, but in none of them we have been able to find the distinct set of behaviors that we here at Zeno came to call Founders Mindset. Back in 2017, one of us wrote an email to the rest of the team postulating a hypothesis of why Amazon was different. A few paragraphs from that email are worth highlighting today: "Amazon is coming from a much "harder" low margin, low return business and has amassed a huge audience to whom it is adding incredible value. Everyone who experiences Amazon loves it and saves money from using it, both consumers and businesses. Which other of these companies can claim that? One final comment is that Bezos seems a much stronger founder than Zuckerberg or Page and Brin. Maybe Amazon ends up buying Facebook. Can you imagine what it could do with WhatsApp? I think ultimately, all these guys will prosper and eat the cake of the old generation incumbents or provide the tools for the long tail to do that. But Amazon seems to be one that stands taller." It's been 8 years since this email was written and for the most part, it still rings true to us even if some of the "predictions" haven't turned out to be true. While we didn't know Amazon all that well back then, we could see certain traits that resonated deeply with us in terms of how they approached business. Mr. Jassy's letter brings these traits to the surface in a very effective way. In our letter about the Discontinuities of Capitalism we describe a Founders Mindset as an obsession with enhancing long-term value, even if at the expense of short-term profits and margins. Amazon has consistently demonstrated their willingness to not engage in profit maximization in the short term, particularly if it comes at the expense of customers. This in turn, has allowed it to continue to find new opportunities to deploy capital at very high incremental returns. We believe this behavior is unique among its peers. From the day Amazon was founded 30 years ago, an obsessive focus on customers has been a priority over anything else. In 2002, Amazon introduced free shipping on orders over $99 long before it was cheap to do so. Amazon lowered the threshold to $49 and $25 within months, cutting shipping revenue and margin in the process, but removing a large online-shopping pain point. AWS has reduced prices at least 151 times since it started in 2006. Amazon cannibalized its own profitable book business with Kindle, as it thought digital reading was easier, more instant and cheaper for customers. The company has always shown the good and the bad reviews, while other scaled e-commerce players only showed glowing testimonials or no reviews at all. Why is this customer obsession relevant for us as shareholders? Because consistently forgoing short-term gains for long-term loyalty and trust earned is very hard to do, but they are investments whose return is deferred in the form of greater future free cash flow or an insurance against future competitive assault. It also turns size into an asset instead of a liability, as scale can be used to further reduce prices, adding more value to customers and further benefitting the long-term. Andy Jassy famously started AWS from a 6-page memo. He was allocated 57 engineers and access to Amazon's existing data resources to run AWS as a start-up inside Amazon. It was difficult to foresee this $115bn run-rate revenue business when Amazon started as an online book retailer. In our experience, companies with Founders Mindset often give you positive rather than negative surprises. Collaboration and frequently questioning the status quo fosters such optionality, creating value for the long-term. Like everything else in life, Amazon is subject to the laws of entropy and the world may one day conspire against it, but with a culture like this, at the very least, the probabilities of success remain very much in our favor as shareholders.

BSD Analysis:
Zeno presents a compelling long-term bull case for Amazon centered on the company's "Founders Mindset" - a culture of prioritizing customer value over short-term profits. The fund highlights Amazon's consistent willingness to sacrifice margins for customer benefit, citing examples like progressive shipping threshold reductions and AWS's 151 price cuts since 2006. This customer obsession has enabled Amazon to maintain high incremental returns on capital while building competitive moats through scale advantages. The manager emphasizes Amazon's collaborative innovation process and anti-bureaucratic culture as key differentiators from other mega-cap tech peers. AWS's evolution from a 6-page memo to a $115 billion revenue business exemplifies the optionality created by this approach. Zeno views Amazon's ownership mentality and speed-focused decision-making as sustainable competitive advantages. The fund positions Amazon as their only mega-cap tech holding, suggesting high conviction in the investment thesis despite acknowledging entropy risks.

Pitch Summary:
During the quarter we initiated two new investments: Amphenol (described above) and a small position in Ashtead, the second largest operator in the equipment rental sector via its Sunbelt Rentals brand. Ashtead's business model is simple: "we purchase an asset, we rent it to customers through our platform and generate a revenue stream each year we own it (on average, seven years) and then we sell it in the second-hand market and receive a proportion of the original purchase price in disposal proceeds. Assuming we purchase an asset for $100, generate revenue of $60 each year (equivalent to 60% dollar utilization) and receive 35% of the original purchase price as disposal proceeds, we generate a return of $455 on an initial outlay of $100 over a seven-year useful life. We incur costs in providing this service, principally employee, maintenance, property and transportation costs and fleet depreciation." For an end user, choosing to rent equipment not only shifts fixed costs to variable ones, it simplifies day-to-day operations. Instead of financing, purchasing, maintaining, storing, transporting, and eventually reselling an in-house fleet, the rental company bears this cost—typically for about 2% of a project's total cost. If the equipment breaks or is no longer needed Sunbelt is a click or call away from solving the issue. Sunbelt and its largest competitor United Rentals comprise 11% and 15% of the U.S. market, respectively, while nearly half of the industry is served by small players with one to five rental locations. Scale allows for materially better fleet economics—across new purchases, maintenance, and the resale of used equipment. Both Sunbelt and United Rentals have pressed this advantage to grow store counts materially over the past handful of years, via both new greenfield sites and M&A. We see a long runway for market share to consistently tick higher as incremental capital is invested behind a proven playbook. We are drawn to the entrepreneurial culture at Sunbelt and believe recent investments will scale with future growth. As such, we expect margins and returns on capital, which are attractive today, to improve as more nodes are added to the company's densifying network. Given the economic sensitivity of the business we've opted to move slowly in building our position, particularly as it's considered in the context of the broader portfolio.

BSD Analysis:
Ironvine's investment in Ashtead represents a play on equipment rental market consolidation and the secular shift from ownership to rental models. The manager highlights the attractive unit economics of the business model, generating $455 in returns over seven years on a $100 asset investment through rental income and residual value recovery. The value proposition for customers is compelling, converting fixed costs to variable while outsourcing equipment management for approximately 2% of total project costs. Ashtead's Sunbelt Rentals brand holds an 11% U.S. market share in a highly fragmented industry where nearly half the market consists of small operators with 1-5 locations. The manager emphasizes scale advantages in purchasing, maintenance, and resale that enable market share gains through both organic growth and M&A. Ironvine expects improving margins and returns on capital as the company's network densifies and recent investments scale. However, the manager acknowledges the cyclical nature of the business and is building the position gradually given current economic uncertainties and portfolio construction considerations.

Pitch Summary:
These included Amphenol, described in detail above, as well as Honeywell International. Trapped inside Honeywell is a jewel of an aerospace business that is arguably worth as much as Honeywell's total market cap today ($124 billion). The aerospace aftermarket sector is one we've spent considerable time studying over the past two decades. Like HEICO (our third largest investment), Honeywell's aerospace business sells a range of products to airplane manufacturers and owners that are specified into designs with stringent Federal Aviation Administration controls. This lock in has resulted in just a few players with the engineering and regulatory know-how necessary to supply equipment across several key aircraft components. The multi-decade nature of the design, build, and operation of an airplane creates one of the longest product life cycles in industry generally, resulting in predictable demand patterns. The mission critical nature of these components results in pricing power which has enabled strong margins and returns on invested capital. In short, the handful of businesses that fit this description are among the best we know of. Not surprisingly, it's rare to find a high-quality aerospace business trading at a discounted price. Last November, Elliott Investment Management sent a letter to Honeywell's board of directors urging it to separate its aerospace and automation businesses into two standalone companies. The letter lays out a compelling case for the quality of Honeywell's assets and makes a convincing argument that, as independent entities, Honeywell's Aerospace and Automation businesses would benefit from focused management, improved capital allocation, better operational performance, and enhanced oversight. Elliot's letter goes on to argue that Honeywell's shares are woefully undervalued due to complexities endemic to the conglomerate operating model and that by liberating the companies, the conglomerate discount would be remedied. Since then, Honeywell has announced it will follow Elliott's recommendations and is set to spin off its advanced materials business later this year, followed by separating Aero and Automation into two publicly traded companies in 2026. Surprised by Honeywell's willingness to listen to a major shareholder and embrace change, we dove into research to verify the quality of the underlying assets with an emphasis on the opportunity set for the separated aerospace business. After applying conservative estimates to a range of operating and valuation scenarios, we concluded that Honeywell shares carried relatively low risk, leaving a call option on improved performance from the standalone businesses post-spin. On that score, from our research to date, all the evidence suggests that there are several opportunities for just that.

BSD Analysis:
Ironvine's investment in Honeywell is driven by an activist-driven value unlock opportunity centered on the company's high-quality aerospace business. The manager believes HON's aerospace division alone is worth the company's entire $124 billion market cap, representing significant embedded value. The aerospace aftermarket benefits from exceptional competitive dynamics including FAA regulatory barriers, multi-decade product lifecycles, and mission-critical component specifications that create substantial pricing power and predictable demand patterns. Following Elliott Management's activist campaign, Honeywell committed to spinning off its advanced materials business in 2025 and separating aerospace and automation into standalone entities in 2026. Ironvine views this corporate restructuring as a catalyst to eliminate the conglomerate discount and unlock focused management benefits including improved capital allocation and operational performance. The manager's conservative valuation analysis suggests limited downside risk while providing significant upside optionality from the spin-off execution. This represents a classic sum-of-the-parts value play where the market is undervaluing high-quality industrial assets due to conglomerate complexity.

Pitch Summary:
Amphenol has demonstrated a unique ability to adapt and thrive over multiple decades amidst significant shifts in technology, establishing itself as one of the largest and most trusted suppliers of interconnect solutions to the global electronics industry. The interconnect market is a great example of a "picks and shovels" beneficiary of technological innovation. What makes Amphenol a great business, however, is not just the market it sits in but the unique way in which it serves that market through a strategy predicated on diversification and decentralization. If semiconductors are the brain of an electronic system, and power supply the heart, then Amphenol's products are the veins and nerves carrying the signals / power from the brain and heart to the rest of the body. These are typically forgettable products with low selling prices but are mission critical to the performance of systems ranging from laptops, smartphones, and datacenters to aircraft, industrial equipment, cars, and cell towers. While competitors often attempt to align themselves with specific trends in any of these given end markets, Amphenol has positioned itself to benefit from electronics adoption generally, selling hundreds of thousands of different products to tens of thousands of customers across the globe, with no single end market making up more than 25% of its revenue. This diversification results in steadier overall growth, allowing the company to remain focused on the long-term and allocate capital opportunistically during a downturn in any individual segment. Organizationally, Amphenol's structure flies in the face of generally accepted business logic which states that the optimal way to run a manufacturing company is to pursue economies of scale through integration that minimizes footprint and maximizes synergies across corporate functions. Instead, Amphenol is organized around over 130 different business units, each operating independently under a General Manager that has complete authority and accountability over his individual operation. It operates nearly three times the number of factories compared to its largest, more integrated peer, and is present in 15 more countries. This structure comes with short-term costs that are easily identifiable and all too tempting to cut for most managers. On the other hand, the benefits are harder to measure, which makes them less likely to be pursued. Increased agility from localized decision making is difficult to put in a spreadsheet. One cannot calculate the return on investments that were not made due to management's constrained bandwidth for capital allocation. Over the long term though, it is clear the benefits of decentralization have far outweighed the costs. Amphenol has handily outgrown the interconnect market organically and further accelerated that growth with intelligent acquisitions. The result is profit margins that have consistently exceeded the peak rates of its largest peer, even during downturns. One of the few predictions we are comfortable making in the technology sector is that over time humans will use more of it. To accomplish this, the world will need an increasing quantity and complexity of interconnect solutions. In the meantime, we happily rely on Amphenol's General Managers to navigate near-term uncertainty as they always have—at the individual market, product, and customer level—to shareholders' long-term benefit.

BSD Analysis:
Ironvine presents a compelling bull case for Amphenol based on its unique market positioning and organizational structure. The manager views APH as a "picks and shovels" play on technological innovation, benefiting from the secular trend of increasing electronics adoption across diverse end markets. The company's diversification strategy is particularly attractive, with no single end market exceeding 25% of revenue and exposure to tens of thousands of customers globally. Ironvine highlights Amphenol's contrarian decentralized structure of 130+ independent business units as a key competitive advantage, despite higher short-term costs. This organizational model enables superior agility and localized decision-making that has historically driven outperformance versus more integrated peers. The manager notes that APH has consistently achieved profit margins exceeding competitors' peak rates, even during downturns, while maintaining organic growth above market rates supplemented by intelligent acquisitions. The investment thesis centers on the inevitable increase in electronics usage driving demand for more complex interconnect solutions, positioning Amphenol to benefit from this long-term secular tailwind.