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| Share Name | Share Symbol | Market | Stock Type |
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| Made.com Group Plc | MADE | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
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| 0.00 | 0.00% | 0.52 | 01:00:00 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
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| 0.52 | 0.52 |
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Posted at 07/10/2023 14:51 by simon gordon Made.com plots comebackBy Aaron Toumazou, Editor at LinkedIn News 5th October, 2023 After entering administration last year, furniture retailer Made.com was acquired by Next in a £3.4m deal comprising its brand, website, intellectual property and customer database. Though Next has sold some Made products since then, the brand’s website has now resurfaced with new stock. Speaking to LinkedIn News UK, Made.com’s head of brand, Hollie Parkinson said: "Next plans to support the Made brand operationally and commercially, leveraging all the efficiencies of a larger business". Made will maintain its own brand identity with dedicated teams across brand, design, product and PR, she says, with plans to grow its presence both online and in stores. As well as a concession in Next’s Sheffield Meadowhall store later this year, Parkinson says Made will also explore external store, brand partnerships and a return to Europe next year. |
Posted at 21/4/2023 10:47 by darrin1471 Made.com auditor EY probed by watchdog following collapse. |
Posted at 26/10/2022 19:20 by tomboyb hxxps://www.msn.com/Made.com comes apart at the seams as inflation drives sofa retailer to the brink Hannah Boland - 50m ago Comments “Sit tight,” a notice plastered across Made.com’s website read on Wednesday morning. MADE.COM Philippe Chainieux CEO - Made.com MADE.COM Philippe Chainieux CEO - Made.com © Provided by The Telegraph The furniture retailer said it had taken down its website to make “some important updates to improve your shopping experience". “We’ll be back soon,” the notice read. It’s now looking increasingly unlikely that Made.com can stick to that promise. On Wednesday, as it teetered on the brink of collapse, the retailer said it would temporarily stop taking orders. Its talks with potential buyers and investors, which had been going on for weeks, had ultimately ended without a deal and the £70m cash injection it had been seeking appeared less likely than ever to materialise. Made.com, which was set up in 2011 by investor Ning Li and Lastminute.com founder Brent Hoberman, said it had no choice but to take "appropriate steps" to preserve value for creditors. “There's a pretty clear indication in all this,” says Paul Zalkin, a restructuring expert at Quantuma. “It seems highly likely that the business is going to have to go through some sort of formal insolvency process.” City sources describe the situation as “disastrous Made.com on Tuesday warned that shares may be suspended after they plunged to 0.5p, valuing the company at just over £2m. In truth, City sources say, “it is just plain f—ked”. Many have been left scratching their heads over how it all went so wrong. In the past year alone, Made.com has lost its chief executive and its chief financial officer, and has warned over profits three times. In its latest set of results, to June 30, it said its cash pile had shrunk by £143m in the space of a year to just £32m, after it started storing more furniture in warehouses to avoid supply turmoil. It also splurged on more warehouse space “in anticipation of strong growth” this year, only to be hit by a downturn in spending among squeezed shoppers. “One has to question if they've really understood the mechanics of the furniture industry,” says Shore Capital analyst Clive Black. “It doesn't look like there's been any slack in their system”. Aside from the operational side of things, Black says there also appears to have been a similarly odd approach to the finance strategy. “It just looks like the bank is empty.” Made.com does not have any pre-arranged credit or overdraft facilities. Its liabilities are made up of “trade”, meaning its suppliers, and leases, where it has taken warehouse sites. At the end of June this year, it owed both of these groups around £72m. In the face of dwindling demand for furniture as shoppers are racked with a cost of living squeeze, and in light of Made.com’s financial situation, analysts say it is unlikely any loan would now be forthcoming from banks. “No one would loan them any money,” says Davy’s David Reynolds. “In their short public history, Made.com has been characterised as moving too slow - to flex the business into a downturn, to remedy mistakes, and in this case to move to a trade sale scenario.” The threat of an imminent collapse is something which is now spreading within Made.com itself. Days earlier, staff had been sending emails to customers offering 15pc off all lighting and “furniture in time for Christmas”. Now, insiders say there is “lots of worry”, with no-one certain whether they will still have a job by the end of the year. Meanwhile, executives “must be terrified of all the public company obligations,” says another source. “Governance has to be extra tight when administration looms,” they say, amid pressure any slip-up could lead to legal action against directors. All this is breeding anxiety within the business. The company had already started making more than a third of its workforce redundant as part of cost-cutting efforts, which also included consolidating its supply chain in Europe and Vietnam. Now, though, those who had thought their jobs were safe are facing the threat that the business could ultimately go under. “It's possible, of course, that it could just cease to trade entirely,” says Zalkin. For customers, there is a clear desire for some clarity on whether orders they have placed will still be coming. “Is it likely that I’ll get my bed on November 9 or shall I just cancel my order?” one customer asked the retailer on Twitter. Another said they had “used our wedding presents to order a sofa from you and we can't even get on your website anymore”. Made.com had not replied to their questions by Wednesday afternoon. While ceasing to trade is one option, there are others which could materialise. For one thing, a rescue funder “could come in and is able to recapitalise the business in order to sort of keep it solvent,” says Zalkin, although he says the recent updates from the company suggest that is unlikely. A pre-pack administration is a more likely outcome, Zalkin says, something which would allow a buyer to come in and essentially leave the creditors behind for the administrator to deal with, portioning out what remaining cash there is after accounting for costs. Such a process might attract more interested parties. Davy’s Reynolds says it might be a similar situation to Eve Sleep, the mattress retailer which last week crashed into administration and that same day was bought out by Benson for Beds. “Like Eve Sleep, buyers will emerge who clearly did not want to pay the equity price but are more prepared to acquire distressed assets,” he says. For now, Made.com only says that its board is “considering its position and a further announcement will be made in due course”. “There can be no certainty that the terms of any offer or investment received will be suitable,” the company told the market. Made.com may be keen to reassure customers that it will be “back soon”, but the reality of the situation is that it is already out of the retailer’s hands. |
Posted at 11/10/2022 11:01 by bingaxu 04/10/22 (Sharecast News) - Online furniture retailer Made.com said on Tuesday that it has entered into non-disclosure agreements and begun discussions with a number of interested parties regarding the potential sale of the company.Interested parties will be provided with additional information on the group and be invited to put forward non-binding indicative proposals in the middle of October.Made said the board will review the proposals and expects to a select number of parties to be invited to participate in a second phase "to conclude as soon as practicable thereafter".Interest |
Posted at 07/10/2022 09:39 by toopoor It was valued at £775m .Online furniture retailer Made.com has priced its IPO at £775.3 million. The London-headquartered company will join the main market of the London Stock Exchange. The price is below the £1 billion target widely reported earlier this month. Co-founded by entrepreneur Brent Hoberman, founder of Lastminute.com, in 2010, the business intends to raise £100 million in an IPO which will see some existing investors sell shares. The firm saw a 30% increase in sales last year to £315m, but made a loss of just over £5m. In the first three months of 2021, sales rose 63%. Made.com has expanded its product offering to include homewares and lifestyle, with more categories in the pipeline. As well as the UK site, it operates in seven markets in mainland Europe including France and Spain. It plans to launch in further territories. “The IPO is an exciting milestone for MADE. I would like to thank everyone who has been a part of our growth journey, especially our employees, as we deliver on our vision of becoming the leading home destination in Europe for digital natives,” said CEO Philippe Chainieux. “Our successful track record in the UK and internationally has been made possible with the foundations that we have built over the last eleven years – a unique combination of a well-recognised brand, a proprietary, data-driven platform, and a bespoke, vertically integrated supply chain connecting our network of designers, artists and collaborators with our customers. “A listing in London, where the business was founded, will enable us to accelerate our growth as we lead the development of the online furniture and homewares market as it moves online, both in the UK and internationally.R |
Posted at 07/10/2022 09:26 by toopoor Am in.The beleaguered online retailer Made.com has begun talks with potential buyers as the furniture company disclosed that it would need up to £70 million in funding to survive the next 18 months. Made.com, whose shares have fallen sharply since it made its debut on the stock market last year with a £775 million value, has set a mid-October deadline for potential suitors to table indicative proposals. After this, the board “will review these proposals and expects a select number of parties will be invited to participate in a second phase to conclude as soon as practicable thereafter,” the company said in a statement yesterday. It also warned that it would need between £45 million and £70 million to continue until the end of next year. Made.com had considered raising funds from investors but said last month that market “conditions are not supportive at the current time”. Made.com was one of many online firms to benefit from the pandemic lockdown but has suffered declining sales as customers returned to the high street or cut back on big-ticket items because of the cost of living squeeze. It was founded in 2010 by Ning Li, Chloe Macintosh and Brent Hoberman, the co-founder of Lastminute.com, to offer stylish furniture at lower prices by working directly with designers. Made.com employs more than 700 staff and has offices in London, Paris, Berlin and Amsterdam. The company has been linked with a list of possible buyers in recent weeks, including the Sports Direct owner Frasers, often tipped as interested in distressed retailers, and private equity firms. Made.com declined to comment further. News of the talks sent Made.com’s share price moved 39.8 per cent, or 1¼p, higher to 4¾p. But that is still a far cry from the 200p at the time of the market flotation 15 months ago. Made.com has issued three profit warnings in less than a year, and has started laying off staff. |
Posted at 23/9/2022 09:35 by tomboyb Made.com puts itself up for saleFurniture group says conditions are ‘not supportive’ to raise rescue funds on the public markets Please use the sharing tools found via the share button at the top or side of articles. Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy. Email licensing@ft.com to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found at Online furniture retailer Made.com has put itself up for sale after concluding that it would be unable to raise fresh equity to help sustain a business hit by a collapse in UK consumer confidence and supply chain disruption. Having gone public last year, Made.com warned on profits in July and last month said it would need to raise more cash. The company on Friday said that it would look at a range of options, including a sale and possible debt financing. “The prevailing conditions are not supportive at the current time of raising sufficient equity from public market investors,” Made said in a statement. It also said that it was withdrawing its full-year financial guidance because of “the unexpected events of the past two weeks in the UK compounding the deterioration of trade”. The shares have collapsed from an IPO price of 200p in June last year to 5.75p on Thursday, giving the group a market capitalisation of £23mn. Recommended News in-depthMade.com Design Ltd Problems pile up at furniture company Made “While the group has had a number of strategic discussions with interested parties, the group is not in receipt of any approaches, nor in discussions with any potential offeror, at the time of this announcement,” Made said. The group said that a fall in consumer spending had left it having to slash prices to shift inventory. At the same time, its freight costs have ballooned from £8.2mn in 2020 to £45.3mn last year — costs it has not been able to pass on to consumers. The group also announced sweeping cost cuts, first reported by the Financial Times on Thursday. “A process has commenced to implement additional cost reductions, including a strategic headcount review, within the next few weeks, whilst retaining appropriate skills and resources to be able to conduct the strategic review process effectively,” Made said. |
Posted at 11/10/2021 21:29 by simmsc You’re welcome 1aconicI didn’t write more earlier as I was at work. Now have finished my dinner, having a (decaf) cappuccino and reading in more detail. I’m happy to share a few more bits. THINGS THAT STOOD OUT TO ME Growth and demand remains eye-wateringly good Positive EBITDA generated despite pressure from sea freight costs Mid-teens EBITDA margins very achievable Chunky upgrades to be had Shares way too cheap and offer deep value Trading at only 0.7x2022 EV/Sales for 34% 5 year revenue CAGR and a very significant margin expansion and FCF generation opportunity, the shares appear extremely cheap. BUY QUESTIONS AROUND LEAD TIMES Aiming to bring down the lead times for furniture to 1-2 weeks. By bringing it down to this level the company could significantly improve its conversion rates. A 1 week improvement in lead time delivers a 5% increase in sales potential, a direct and immediate contribution to EBITDA QUESTIONS AROUND RETENTION RATES: Retention rates attractive and very comparable to Moonpig Homewares are good for improving retention rates Made.com is profitable on first order in UK and Europe Retention rates to improve further via further investment in Homewares (excellent way also to acquire customers – low ticket value). Westwing (EU competitor) shows how average order frequency can be increased via Homewares (Westwing 70% Homewares / Made at the moment only 30% Homewares). WHY SHARE PRICE DECLINE SINCE IPO Mostly due to higher freight costs Made has decided not to pass on higher freight costs to its customers (despite the competition deciding to do so). Reason for doing this is winning market share for the long term. Made did not want to increase prices before it reduces its lead times further (very sensible in my opinion). And Made is able to absorb these higher costs more easily due to higher margins (compared to its peers) and they still knew that they could improve margins significantly despite these costs. (My personal opinion is that we are still partly also paying the price for the poor float jobs that Morgain Stanley and JP Morgan did). Some of this stock went into the wrong hands and poor marketing/roadshow was done). QUESTIONS AROUND MADE’s TARGET TO GET FROM NEGTATIVE EBITDA TO LOW-TEENS EBITDA IN 5 YEARS Massive cost leverage kicking in across all lines in the p&l due to heavy investment before the IPO (peers are behind with these investments) Proof that the leverage is being delivered is, while freight costs resulted in a 3% drop in gross margins in 1H 2021, EBITDA margin still improved from -10% to +0.6% (this is huge in my opinion. If this was the only thing that I knew about Made.com, I would buy the shares). HOW DOES MADE COMPARE TO ITS MAIN COMPETITORS Highest gross margin as it’s the only 100% branded seller (Home24 and Westwing only 50% and 25% respectively) Initially made will continue to have higher marketing costs (compared to its peers) as made is investing in expanding its Homewares market share (which brings huge benefits in repeat orders/retention, etc) and increasing brand awareness in Europe … in the medium term marketing spend will move back towards mid teems level (% of revenue). Made’s competitors are now seeing sharp declines in EBITDA due to them trying to catch up with MADE in terms of investing in own brand (etc). This EBITDA decline comes despite passing freight costs on to customers. This shows MADE in a much better light as MADE is already seeing leverage benefits. A FEW FIGURES Sales expected to grow to 691m by 2023 Gross margin back up at 54% by 2023 EBITDA 44m by 2023 EPS 4p by 2023 Net debt -92.4m by 2023 (as in cash positive!) (PS by the time I had finished writing this post my cat secretly drank my cappuccino). |
Posted at 13/8/2021 18:30 by simon gordon One for the plungers! It's long....Swen Lorenz - 13/8/21 CONCENTRATED BETS – HOW THE WORLD’S BEST VALUE INVESTORS GOT RICH Edwin Dorsey is a present-day wunderkind of the investment world. He publishes an influential newsletter on fraudulent companies, and his Twitter feed is followed by some of the world's most influential investors. Institutional Investor featured him in an in-depth profile on 16 November 2020 when he was just 22 years old! Dorsey is also a value investor who makes concentrated bets. He recently disclosed an investment of 50% (!) of his personal portfolio in a single value stock, Twitter (ISIN US90184L1026). Putting half of your money into a single stock is what you could call a truly concentrated investment strategy. I have been a lifelong believer in concentrated bets and always wanted to share my experiences and observations with my readers. Dorsey's investment in Twitter gave me a reason to finally get on with it. If you are eager to learn about an investing strategy that is not commonly taught elsewhere, this may be one of the most important articles you have ever read. It won't offer you any fixed, iron-clad ideas, but it'll help you get onto a new path that might work for you. A common denominator among many successful outliers Diversify, hedge your bets, spread your portfolio across many stocks. It must be the finance industry's most frequently dished-out advice not to put all your eggs into one basket. This advice is not wrong per se, but it won't apply to everyone. Everything depends on what you aim to achieve and what your circumstances are. For some, diversifying could indeed be the wrong strategy. One of the inconvenient truths of the stock market is that very few people get rich through investing. You have a much higher likelihood of getting rich from starting and building a business. Trying to get rich on the stock market is tempting for all sorts of reasons, but it's insanely difficult to say the least. Some say that spreading your bets and aiming to gradually get rich on the back of the economy's long-term growth is the only way the stock market could ever work in your favour. They aren't wrong, but their theory is up against some serious competition. If you study the world's greatest investors, you will find that many of them completely ignored all advice about diversification. Going the opposite way led to immense riches, and for quite a few of them, it did so rather quickly. Stanley Druckenmiller, the billionaire investor who rose to fame and wealth alongside George Soros, nicely summarised it in his interview with The Hustle on 26 May 2021: "When I've looked at all the investors (that) have very large reputations — Warren Buffett, Carl Icahn, George Soros — they all only have one thing in common. And it's the exact opposite of what they teach in a business school. It is to make large concentrated bets where they have a lot of conviction. They're not buying 35 or 40 names and diversifying. I don't know whether you remember that Icahn a few years ago put $5B into Apple. I don't think he was worth more than $10B when he did that. [In 1992] when I went in to tell Soros that I was going to short a 100% of the fund in the British pound against the Deutschmark, he looked at me with great disdain. He thought the story was good enough that I should be doing 200%, because it was sort of a once-in-a-generation opportunity. So, [these investors] concentrate their holdings. This is very counterintuitive." Pretty clear words from someone who has been around for a long time, and who has walked the talk. Which begs the question, could such a strategy of concentrated bets work for you, too? And if so, what are some of critical factors to make this strategy work? Triggered by Dorsey's bet on Twitter, I've had a look for useful source material on the idea of concentrated investing, so that I could point you its way. It turned out there is one book that contains everything about the subject that you need to know: "Concentrated Investing: Strategies of the World's Greatest Concentrated Value Investors", published in 2016. Today's Weekly Dispatch will look at three key questions: -Who can you learn and take inspiration from? -How to go about concentrated investing in practical terms? -Is it really the right strategy for you? Let's dive right in. Four role models to learn from Needless to say, the world's #1 best-known investor who has made concentrated bets is Warren Buffett. However, it's worth recapping just how concentrated some of the bets were that got him off to a good start during the earlier phase of his career. In 1964, Buffett invested no less than 40% (!) of his investment partnership's portfolio in a single stock – American Express (ISIN US0258161092). The story behind the investment is legendary. Amex had gotten burned by the scandal surrounding the Allied Crude Vegetable Oil company, which was the Enron of its days. Amex took a major financial hit from the scandal and its stock tanked, but the question was, how were customers with American Express credit cards going to react? Staking out restaurants, hotels and banks, Buffett and his partners found out that customers continued to use Amex cards just as before. He saw an opportunity to strike big, and went all in at a time when Amex stock was down and out. The investment quintupled and Buffett's investment partnership made a huge leap forward. In the history of Buffett's investing, he never invested a higher percentage than in the case of Amex. However, taking concentrated bets was not unusual for him. Five years earlier, Buffett had invested 35% of his partnership's assets in Sanborn Map, a business that was shrinking but which sat on a valuable investment portfolio. As Buffett once explained to students: "If you are a professional and have confidence, then I would advocate lots of concentration." His sidekick, Charlie Munger, took the concept of concentrated bets even further. Munger defined a very concentrated portfolio as "no more than three stocks". His approach made his portfolio a lot more volatile, but Munger was willing to accept the valleys because he knew the peaks were even greater. Someone you are less likely to have heard of before is Joe Rosenfield. In 1968, Rosenfield took charge of managing the endowment of Grinnell College in Iowa, when it stood at a paltry USD 11m. By the time he stepped down in 1999, the endowment had grown to over USD 1bn, even though it had to pay 4.75% of its assets to the college every year while he was managing it. Rosenfield's key to success? Concentrated bets AND holding them (almost) forever. In three decades, he bought not even half a dozen major investments and kept most of them for perpetuity. Unusually for a conservative endowment fund, in 1977, Rosenfield made an investment in an unknown fund: no less than one-third of the endowment went into a relatively young fund managed by a largely unknown fund manager – the Sequoia Fund managed by Ruane, Cunniff & Goldfarb in New York. At the time, endowments would have been more likely to invest in US treasuries than tying their fate to an emerging fund manager. Rosenfield's assessment proved spot on and the Sequoia Fund became one of the most successful equity funds in US history. Had you invested USD 10,000 in the Sequoia Fund in 1970, you'd now be sitting on USD 7.8m. The college's investment in the fund at one time became one of the largest individual investments in an American mutual fund. Investment comparison Another highly successful investor you are unlikely to have come across before is Kristian Siem, often dubbed the "Warren Buffett of Norway". Very much in line with his country's strong presence in oil and shipping, Siem focussed on making concentrated bets on undervalued oil and shipping assets. Between 1987 and 2014, he increased his net worth from USD 5m to around USD 2bn, which is equivalent to a compound annual return of 30%. Siem made big bets AND he only ever focussed on assets in oil and shipping. At the peak of his career, he controlled one of the world's largest cruise ship companies. There'd be plenty of other names to add to this list of examples. The message is loud and clear, though: if you want to make it big in investing, highly concentrated bets certainly are *one* possible way. What does it take in practical terms, though? Is any of the approaches described above better than the others? More than one potential path to pursue The bad news first: there is no ready-made formula. The good news: this leaves room for you to carve out your own niche, based on your needs and making use of the opportunities available to your generation of investors. Usually, as soon as one particular approach in investing has become a huge success, the opportunity is gone. Every generation gets a few big opportunities thrown its way, but no one knows in advance what they will be. If you have an idea of what the next big thing could be and tell your friends about it, they are likely to laugh about it. That'd actually be a good sign. As I once wrote in a Weekly Dispatch: "Don't invest in it if they don't call you crazy!". The article refers back to my idea of investing in vegan food-related companies in 2017. How well-timed an idea that has turned out, and how much ridicule I faced back in those days! Druckenmiller and Soros developed an acute sense for trends in the currency markets, and their concentrated bet against the pound sterling literally broke the Bank of England. Their raid on the pound is now part of investment lore, but no one would have thought it possible had you told them in advance. In hindsight, everything looks a lot more obvious and easier. Buffett made heaps of money by buying Coca-Cola (ISIN US1912161007) and riding a long-term consumer trend. However, will sugary drinks remain a growth market now that half the planet is overweight and diabetes-ridden? Probably not. That ship has sailed, too. However, nothing should stop you from emulating a few of the methods applied by the star investors mentioned above. For example: Find an industry that you are extremely familiar with and make your concentrated bets solely in this sector (Kristian Siem). Do the opposite of what the previous point mentions, and instead focus on finding undervalued cash flow in any industry. Develop a deep understanding of accounts and business processes to identify which unfavoured sector currently offers you the chance to buy a future dollar of income for a fraction of its value (Warren Buffett). Bet on an emerging fund manager instead of going with an established one. Emerging fund managers offer you a much higher statistical chance of earning outsized return, not the least because smaller funds are generally more agile (Joe Rosenfield). Dig through small, unknown stocks. Everything else has already been grazed over by bigger investors. It's in exotic niches that you find hidden gems (Charlie Munger). Many roads lead to Rome, but you need to pick one and get walking. Does that sound like a realistic goal for you to pursue? You'll have to honestly answer this question for yourself, but the chaps mentioned above can help you derive at a conclusion. Could this work for you? Further up, I only gave you half of Buffett's quote from his talk with students. The complete version reads: "If you are a professional and have confidence, then I would advocate lots of concentration. For everyone else, if it's not your game, participate in total diversification." Charlie Munger has a fairly stark way of dividing investors into two categories: professional investors who have what it takes to get an edge in the market, and the "know-nothing investors". Indeed, making concentrated bets is not for everyone. Much as concentrated bets become fashionable during good times, most people abandon the strategy again during bad times. Concentrated bets magnify market volatility, which can wipe out investors. However, it's a strategy that is much more open and accessible than you may expect. E.g., you could excel at this strategy even if you have not yet reached world-class analytical skills for understanding companies. Does that surprise you? Another author looked into this question. Tobias Carlisle, the author behind "Quantitative Value" and "Deep Value" analysed whether success was down to finding the right *companies*, or holding them in the right *amounts*. Surprisingly, world-class skills in analysing companies may even stand in the way of success as you can be so stuck in forever weighing the pros and cons of an investment that the big opportunities sail right past you. Someone else may not have the same analytical skills, but the ability to recognise that sometimes in life, you just have to go for it! Just to illustrate this point from my own personal experience: in the early 2000s, a foreign brewery conglomerate made a bid approach to a publicly-listed regional German brewery. While the bid terms were a bit unclear, one of the executives of the target company was quoted with a few likely numbers in a local newspaper. If you believed these figures, there was a huge amount of money to be made by loading up on the stock. But could this executive really have spilled the beans in a local newspaper, and could markets be so inefficient that an article in a local newspaper had not yet made it to everyone else's awareness? Proponents of the efficient market theory would have told you this was never going to work. Everyone would have advised you to assume this was a case of "when it sounds too good to be true, it must be too good to be true". I concluded this was one of those instances of life throwing you an opportunity with an outstandingly good risk/reward ratio, bought as much stock as I could afford, and made a serious bundle of money quickly. This is what Buffett calls "temperament". As he described in 2011: "The good news I can tell you is that to be a great investor you don't have to have a terrific IQ. If you've got a 160 IQ, sell 30 points to somebody else because you won't need it investing. What you do need is the right temperament. You need to be able to detach yourself from the views of others or the opinion of others. You need to be able to look at the facts about a business, about an industry, and evaluate a business unaffected by what other people think. That is very difficult for most people." As a private investor who manages his own money, I was able to defy conventional wisdom and grab the bull by its horn. Actually, there are several areas where private investors have a real edge. Why private investors have a few real advantages As a private investor, it's much easier for you to abstain from group think (at least, as far as your investments are concerned). If you invest your own money, there is no corporate policy forcing you to subscribe to the latest investment craze. No boss disagreeing with your view, no investment guidelines influencing your decisions, and no compliance department slowing down your decisions. You also have the advantage that your savings will (likely) be permanent capital. Why is that relevant and why does it put you ahead? If you are seeking outsized returns, you will have to put up with outsized volatility. If you invest permanent capital, sitting through a period of volatility won't have to bother you. As an employed fund manager, you are likely to get fired for outsized volatility – unless your investors have given you permanent capital, as in the case of Berkshire Hathaway's shareholders. Being able to invest permanent capital is a HUGE advantage, and as a private investor investing their own money you naturally have that advantage on your side. You are also usually much more agile. If you have a few hundred thousand or even a few million to invest, you can access relatively small, obscure, illiquid stocks (and other thinly traded securities, commodities, or alternative assets). The biggest gains are usually made in relatively obscure areas, and if you oversee a portfolio of a few billion, these opportunities will simply not be accessible to you. Obviously, for all of these points, there will be exceptions and limitations. E.g., there are actually some investment funds that make their clients commit capital for lengthier periods to deal with the issue of volatility. Also, I concede not everyone will be in a position to stash away their investments for the long haul. Everyone's circumstances are different. This Weekly Dispatch aims to give you a sense for the key aspects of this issue and where you might have an edge. There might not be one for yourself, in which case you should honestly conclude that your needs and possibilities are simply different – at least for now. Also, circumstances can change over time, just as your investment style can change over time. Rosenfield started as a speculator and became one of the ultimate long-term investors. Buffett famously missed out on the tech stock boom of the late 1990s, only to become one of the largest (and most successful) investors in Apple (ISIN US0378331005) in recent years. The world is in constant flux and you'll have to adapt your investing to changing times and personal circumstances. Without a doubt, though, you've got some extraordinary opportunities. I mentioned one such opportunity at the beginning of this article, and it actually makes for a specific investment idea. Check out Twitter – or regret later Edwin Dorsey isn't just the current go-to genius for spotting securities fraud, he is also an extremely successful content creator and entrepreneur. With little more than a keyboard and his intellect, Dorsey has created a small publishing operation that is earning him oodles of subscription income. One of the keys to his success? Dorsey is really good at using Twitter for building an audience for himself. He "gets" Twitter, and as a result, he has deep insights into the likely future of the platform. In this regard, he is similar to Kristian Siem. Dorsey has made a huge bet in an industry that he is extremely familiar with, because he spends most of his time in the ecosystem of content creators that has sprung up around Twitter. What's more, Twitter is a value investment, and one with outsized potential - as concluded in my November 2020 research report "Twitter: Humanity's brain". Twitter stock was USD 43 back then, and it's USD 65 now. I also believe it has a lot further to run, and it might multiply over the coming years. What makes Twitter the ONE social media stock to own? If you don't know the answer, I urge you to check back to my report. Just don't put 50% of your net worth into that one stock! (Unless you are a content creator with deep knowledge of the company, that is). |
Posted at 11/8/2021 09:52 by simon gordon Brent Hoberman on LinkedIn - 21/6/21:Made.com - a phoenix from the ashes. Today, Made.com officially became a publicly-traded company on the London Stock Exchange. On a momentous day for the team, I wanted to take some time to reflect on Made.com's inception over twelve years ago. Every career has literal pivotal moments - sliding doors where fate can be cruel or kind. Made.com, for me, is a tale of a phoenix rising from the ashes. So today, I wanted to share a few learnings for those founders facing questions of when to quit and when to pivot. Deciding what to do post Lastminute.com After selling lastminute.com, I wanted to keep working in the internet sector. It was 2005, and the eCommerce revolution felt like it was just beginning. I did much pondering about what to do next. I ruled out being a CEO again - I was too obsessive. Working non-stop for eight years as CEO taught me a lot about my CEO type. I am the full-on type - first in, last out, always thinking about how to make the business better. So, at the tender age of 37, I decided that executive chairman was to be my next role. I would start another venture and build a brilliant team. Embarking on furniture I wanted to do furniture for several reasons. Firstly, it reminded me of launching into online travel and leisure in 1998. Secondly, my wife was an interior designer, capable of visualising everything - this was so far from my skill set. Finally, we had just bought a house, and the opacity of buying furniture struck me as a perfect problem for technology to solve - the visualisation, the search, the supply chain inefficiency, price gouging and lack of a visual community around which to share inspiration. As with lastminute.com, the cynics pounced! They said no one would ever buy a sofa online, just as they had told me package holidays were too much of a considered purchase to be purchased over the internet. Was the market potential big enough? I wandered into WHSmith one weekend and counted a whopping 36 interior design magazines. There was an advertising market. And that was how mydeco.com was born. After I left lastminute.com in 2007 (sold in 2005), I launched an ambitious venture to solve the furniture buying and online interior design experience. It was to be a metasearch for furniture, a browser-based 3D design tool to visualise changes to your home, a community with which to discuss it. It had ambitions to be Pinterest and Houzz before they existed. Building mydeco.com So we raised a significant seed round of £5m from Amadeus, New Media Spark (Tom Teichman) and others, which we followed in 2008, and 2011 with more significant raises from Burda, Sofinnova and eVentures. While the mydeco site managed to get to the premier league of interiors websites in the UK, it became clear the business model wasn’t quite right. The buzz and creative chaos of a world-class team humming and breaking barriers we had felt at lastminute.com were lacking this time around. I was founding executive chairman and discovered that this felt more like work than the passion hobby I had created through lastminute.com. The vision was still groundbreaking, but the early days lacked the energy and creative chaos that we had previously. Perhaps we were too early and tried to do too many things at once. But, we executed well on many fronts and built credibility and traffic: we had an advisory co-chaired by legends Sir Terence Conran and Philippe Starck, which included Marc Newson, Thomas Heatherwick, Kelly Hoppen and Kristie Allsop, and we soon had over a million rooms built in 3D. This felt like a serious achievement until a Chinese founder approached me on a visit to Beijing to tell me he’d copied the model and had 10 million rooms built. I was flattered but told him he had chosen the wrong model. An introduction to Ning Li On 7th Feb 2009, I emailed Ning Li after Alexis Bonté, a former colleague and now serial entrepreneur, had met Ning at a Balderton event in Paris. I had failed to connect with Ning for some time. Having just last week hosted our annual Founders Forum after the pandemic-induced hiatus, I'm reminded of the key serendipitous moments at in-person events that lead to new ventures like this. Ning was then CEO of Myfab, a French startup gaining buzz for its unique demand aggregation model for furniture. This meant that if enough people committed in advance to an item, it would get manufactured and shipped. I liked the model; it had minimal wastage, no intermediaries and meant a better deal for the customer, combined with a unique marketing hook. It wasn’t until September that year that we managed to meet up. The timing was perfect. Ning had just left myfab and was free to explore new ventures. We were exchanging business models within a week and discussing launching an improved direct-to-consumer furniture business together. The credibility built for mydeco was critical for what happened next. Incubating Made.com Our team essentially helped incubate made.com with Ning in our offices. We provided the back-up for him to move fast and indeed move to London from Paris. He trusted us to help with Made’s launch. I did my due diligence with the legendary Marc Simoncini (the founder of Meetic), an old friend from my lastminute.com dalliances in online dating. Ning had interned for Marc. He said Ning was exceptional and difficult - but clearly, more of the former as Marc willingly joined the made.com seed round. The mydeco board was very supportive of the deal - Tom Teichman, using his well-known instinct to sense an even bigger opportunity. The disruption of the furniture supply chain had featured in the initial mydeco business plan (just like the TripAdvisor reviews model was in the first draft for lastminute.com), but it was by now evident that the mydeco team was too stretched, and it had become less of a talent magnet. Birthing a new company The best way forward was to give birth to a new company. The mydeco contingent started with fifty per cent of the new vehicle, and Ning had the other half. As we approached seed investors, they stipulated commitments from mydeco. For example, I was to commit to being chairman for at least the first three years to boost traffic and give credibility. During our seed raise, we approached PROFounders Capital - a venture capital firm I had co-founded. I couldn’t vote on the deal, of course, and wasn’t sure the team there would take either the risk or the valuation. But, a combination of the determination and smarts Ning brought, together with some of the mydeco team we seconded to the business, enabled us to pull together a strong seed round of angels and VCs. We launched the business at Newcombe House in Notting Hill, sharing offices with mydeco and driving early synergies between the two. Mydeco continued to grow with a particular focus on the marketplace and affiliate revenues. The community grew but not exponentially enough to get the market excited, and the low commissions hurt the core economics. We managed to keep raising rounds, but eventually, it wasn’t enough, and we had transitioned through three CEOs. The best decision we made was not to close the business but to keep it funded not to dilute or lose our stake in made.com. This meant that I, alongside Yoo and Tom Teichman, had to personally make four loans to the business to protect our smaller shareholders from larger dilutions. Lightning strikes A lighting strike for made.com was the introduction of Steuart Padwick, the upmarket furniture designer who had worked with mydeco. He had designed a beautiful but reassuringly expensive desk that had a small market. We approached him to make a much cheaper version for Made. It became an instant bestseller and set the tone for stylish design at affordable prices. It also became a model for working with other unique designers - get them volume without diminishing their high-end brand. Where we are today Made.com has since flourished and become a pan-European brand and a category leader. Today, Made.com officially became a publicly traded company on the London Stock Exchange and delighted to see that the share price has held since its listing last week. I am humbled to be part of and supported by a national tech scene that continues to boom - it is no coincidence that the UK now boasts a handful of serial entrepreneurs who have founded 2+ unicorn businesses including Alex Chesterman (Cazoo, Zoopla), Sir Charles Dunstone (Carphone Warehouse, TalkTalk), Mike Lynch (Autonomy, DarkTrace), Tom Blomfield (Monzo, GoCardless) and I'm sure many more (would love to be reminded of others!). Summary of key learnings Twelve years on from the initial seeding of made.com, there are many lessons to reflect on that led to this startup rising from the proverbial ashes. To summarise a few key learnings: Pivoting a new synergistic model with a different team. Diluting to attract fresh talent. Raising capital rounds when funds weren’t critical. Founder transition as the business scaled: Ning felt the timing was right to hand over the CEO role to Philippe Chainieux, a world-class manager. Congratulations to all the team (including Susanne Given, Philippe Chainieux, Adrian Evans & Annabel Jack) who make Made.com what it is today, but a particular mention to those very first employees and co-founders who incubated the business in our office in Notting Hill over a decade ago. |
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