$60K $YY yolo with short puts
This is a Singapore company with Chinese workers. Just bought back over $200 million of stock in 2 months. Market cap is $1.8 billion with $2.8 billion of net cash (!!!!). Has authorization for another $900 million. CEO and Xiaomi founder owns 33% of the company. It was rumored to be taken private at $75-$100. Which explains why management is buying back so much stock.
Company operates BIGO, imagine Twitch tipping on steroids + EMEA beta males. Started to prints boatloads of cash. Based on Q4 they are going to do at least $400 million of operating profit every year on BIGO. That's a PE of like 5x growing at at least 10%. They are also investing in a bunch of venture stuff like an SEA Shopify (Shopline).
The stock sold off on Chinese bullshit because CEO is Chinese, but the company is in Singapore. Muddywater thought the cash was fake, but obviously he was wrong, unless you can buy back $200 million of shares with air. They also offloaded almost all of their China business to Baidu, they got most of the cash but deal hasn't technically closed yet.
A base case is $92 if we value BIGO at 10x PE plus cash. Bull case $147 if we value BIGO at 20x PE. I think margin will continue to expand so there is a super bull case of like $200.
Even if China invade Taiwan this is a Singaporean company so they would be clean. Bear case is short term momentum downward, which is why I bought LEAPs and June 2022.
Quick background on CEO. He is really the father of live streaming. He started live streaming in China and pioneered tipping way before Twitch was a thing. In many ways Twitch is still behind them in terms of monetization since they are focused more on ads. The CEO really perfected the gamification of live streaming.
My past wins. Invested in ROKU at IPO in the $20s because of autistic but smart founder. Buying NMRK after COVID (see 100K yolo https://www.reddit.com/r/wallstreetbets/comments/lkrzqp/100k_nmrk_real_estate_yolo). Now some of my money is in $YY. The only reason I'm not putting 100% of my portfolio is to buy more dips, if any. The opportunity is too good to pass up even if people think they are Chinese.
Posititions: https://ibb.co/ByJhQxW