2/10/25 - $shop - Just too expensive ST to play ST. prefer <$100

2/10/25 :: VROCKSTAR :: SHOP
Just too expensive ST to play ST... prefer lower entry

- as you guys see from prior comments (on this name and others), i tend to only act on extremes or where valuation is much more "obvious"
- while i let go the stock too soon on the last print, it still wasn't "easy money" as the saying goes
- so here's the logic on this q that keeps me sidelines

1/ we all know consumer, esp the emerging brands have had great 4Q's and this should be v +ve tailwind for SHOP

2/ at the same time, this CEO strikes me as a realistic guy, not the powder-nose-energy as PLTR's, which is to say many consumer brands have been offering "unclear yet what next year brings" sort of speech

3/ guidance usually always matters more than result (bc it's fwd looking and this is what stocks discount), but i think especially in environment where agent orange is still "fighting" tariff wars and there's uncertainty. this is all to say, the smaller brands are probably even less prepared than larger ones, and probably v china-mfg focused and so this disproportionately affects SHOP's customer

4/ it's not like the stock is cheap. it's one of these things where... if runs... i'd probably not want to chase it (if i didn't own it, which i don't) and if i did own it, i'd probably cut it. and if it dips, the question would be "how much" before i'd buy it - even a 10% or 15% dip probably wouldn't be enough to get me in the pool bc it would need to be a small position and at this stage in the "rally" (tape), i just don't like small positions clogging up my PnL. half pregnant.

5/ so if i "loved" the stock and had LT conviction (i'm maybe mostly there, but i like a lot of other stuff at the moment... e.g i've written extensively about NXT, UBER, BTC, tsm...)... i'd be interested say maybe sub $100 to begin toe'ing in. i'd get much bigger on a final tariff sell off that sends the market into any reasonable correction (which we haven't had). again, at that pt i'd probably bite more on UBER and names that are less tariff exposed that have been showing strength at better valuations. just for context, UBER has similar EBITDA mgns as SHOP, grows just as fast and produces nearly 4x as much FCF. so yeah. and i'd consider it an equally strong "platform moat".

so there's that. i'm sidelines. rooting for you guys, but not drinking the market's kool aid. 40% cash and i like what i like. and the opportunity cost needs to be better than stacking more of what i like. this doesn't check that box, just yet.

V