Asset Manager Investing in Global Technology Sector

We're an asset management firm allocating our capital into asset classes benefiting from technological innovation and applications globally. We serve as a family office of a tech professional who has spent over a decade as an entrepreneur, operator, and venture investor across Asia and the US.

Our small team is made up of diverse investment professionals who research, identify, and execute relevant opportunities. We occasionally share some of our investment memos, insights, and analysis here.

Friday, June 26, 2020

Q2.2020 - Eventbrite: Tough Outlook Even After Financing Boost

  • Having been severely hit by COVID-19, Eventbrite should expect very little to no growth in 2020, even after the recent shift to online events.
  • The $225 million financing from Francisco Partners will allow Eventbrite to test the monetization strength of its online event program.
  • However, we remain skeptical of the overall Eventbrite's long-term growth prospect.

Towards the end of last year, we discussed how Eventbrite (EB) would need to have a more attractive risk/reward profile for investment consideration. As the COVID-19 pandemic has significantly weakened the company's fundamentals and also threatened its long-term prospects, we found it hard to justify a bullish position on the stock. Upon the pandemic, Eventbrite laid off ~45% of its employees to save $100 million for the year. As it entered a distressed situation, it also received a $225 million funding from a PE firm, Francisco Partners. The shares are currently down ~40% from December when we published our first coverage on the stock. In our view, Eventbrite will be in a distressed situation for some time, even beyond 2020. Given the tough outlook, we think the price needs to drop a lot more to justify the risk/reward. We will maintain our neutral stance, leaning more towards underweight.

Read the original article here

No comments:

Post a Comment