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Monday, August 31, 2026

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@BrokenMoats 1 click

Broken Moats on X

still feel the rotation from July-current is more about a short squeeze (the opposite end of the Situational Awareness portfolio) and the dispersion of having to unwind the long semi trade portion. But that rubber band is similarly stretched as it was the opposite direction at the end of June. Still feel its in the process of reversing (even the morning action today looks like a top could set in?) $RNG, $IT, $APPN, $TGT, $EXPE, $FDS, $PAYC, $ELF, $MET, $MFC, $GDDY, $V, and many more that were AI losers that have had incredible runs in the past 4-6 weeks seem like good ways to be short against a snap back to AI or a more seasonal unwind from policy risk trying to control rates, midterm/fall seasonal factors, etc. Especially with SaaS earnings taking the stage later this week and next (overshadowed by $NVDA on Wednesday)
@ActAccordingly 2 clicks

PAA Research on X

Yes, you're touching on some of the issues that $Z/$ZG faces in the residential real estate landscape. There are reasons that the stock trades at 8-9x FY27 consensus EBITDA even though the company continues to grow revenues at a mid-teens clip YOY organically while generating huge FCF. We've written HUNDREDS of pages on these issues so this is not the right forum to litigate the relative merits of any of these concerns. Zillow has a lot of organic initiatives that should sustain growth for the next few years. From all my work, the commission structure of the industry is not changing much right now, but of course that seems inevitable at some point. If you really drill down to what $Z/$ZG is doing strategically it's all about becoming more deeply integrated into the transaction. Follow-up Boss was the most important acquisition the company ever made IMO. You don't need to see around corners here, but you have to look through the noise to see what the company's doing.
@BrokenMoats 1 click

Broken Moats on X

The bigger issue I think is if changes in commission structures ongoing in real estate changes Zillows position in the industry and if they need to overhaul their model on the housing side? ZG running straight into https://t.co/xkzar3nuEl with success to increase supply and they'll both likely end up sharing that market (more a negative against csgp as they have the larger share in the rental space currently) but I think they end up shrinking that pie with their competitive attacks against each other. The compass and regional MLS provider lawsuit on exclusives, supply I think is the bigger case hanging over $ZG currently because thats one of the few threats to their dominance in mindhare in shopping/looking at homes online and their ad revenues there
@ActAccordingly

PAA Research on X

$Z/$ZG announces it reached a resolution with the FTC on the commission's anti-trust allegations related to the #zillow/#redfin rentals syndication deal. The partnership will continue going forward but $RKT/Redfin will be required to buildout its own rentals listings syndication platform and Zillow will waive any non-competes. My sense is that $RKT/#Redfin are not hugely interested in the rentals space at this time and Zillow's market share gains will continue at a robust clip. This is a positive for $Z/$ZG and eliminates another litigation overhang. We estimate the size of the rental property advertising landscape at $9-$10B annually. One has to wonder where this lawsuit came from given that it involved a $100MM deal in a massive marketplace. $CSGP?
@BrokenMoats 1 click

Broken Moats on X

$suja dug in on a recent ipo that has collapsed, weirdly saw a bunch of people commenting on it and got curious. On the service it seems cheap, but EBITDA is not FCF. And I struggle to understand how the business scales the way the bulls and the sell side want you to believe it will. Cumulative fcf has been negative for years, and of course they cleaned the books for an ipo year, so numbers elevated td, but still nothing to get excited about and forward numbers already look disappointing right of the gate versus S1 guidance (a very bad look, and terrible way to establish trust with investors and sell side coverage) New mgmt background is uninspiring Debt load is quite high even post ipo, the recently lowered interest rate is nice for delta in income statement benefits next few quarters but still have a cash flow problem but this was a nice development. No idea what the slice business is or how it fits - it would be massively cash consuming if they actually try to compete in that space saturated with deep pocketed players like poppi and many other players with national advertising campaigns and distribution/shelf agreements with players like $KO and $PEP (slice is never going to get any meaningful mind awareness or share without massive marketing investment, and Suja does not have the capital or FCF to pull that off. The 90s nosteliga approach already worn off from the early 2025 launch as its not a relaunch of that heritage brand, it's just the ip wrapped as a prebiotic soda. ---it seems more like a story to dangle to get the ipo out that they can sell a huge TAM in their s1, which is a further strike against the board, the PE sponsor and mgmt (likely it just sits at the range its at and gets slowly unwound in a year or two to stop further cash bleed) PE sponsored and +60% owner -- can be your friend on locking float, but also your enemy when they need liquidity, the lock up period ends, or decide to move on. --- one of their other exits through IPO went a similar way, massively collapsed in value after the ipo, wallowed for a number of years and ultimately the PE firm bought out the remaining shares at pennies on the dollar to the IPO price (agrofresh) --Structure of ownership and tax agreements is highly unfriendly to passive long common equity shareholders (good for sponsor) Ultimately its an uninspired story, that is more expensive than it appears with fully diluted shares, a very difficult consumer space that relies on trends, shelf space staying in front of KO and PEP and BUD in addition to many many others on distribution and shelf space - a concentrated number of distribution points that gives power to their buyers (highly concentrated customer base on their sales (grocery channel) Stock probably bounces along the way especially in fronton or right after the coming lockup and the market loves to squeeze things one last time before their final resting space, and the tighter float here (assuming pe stays in) likely makes that more likely an outcome than not. So a swing trader after a brutal IPO? sure I would likely bet up before it's back in time out likely for good. But as an actual investment? let alone long term investment? I find that argument deeply flawed on both financial and fundamental basis

Investor Letters

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BE 2026-08-29

Bloom Energy: 5 Links That Cannot Break

Bloom Energy’s 80x forward earnings valuation relies on concentrated megaprojects, sustained AI data-center power demand and continued…

BE $70B
Valuation Rewind 3 clicks

NCLH or her grandma Saga?

Norwegian Cruise Line’s $15 billion debt and 2026-27 capex delay deleveraging, despite fuel-efficient new ships and stronger projected 2028…

NCLH $6.8B
The Oak Bloke 13 clicks
COCO · short

Vita Coco Company INC

Vita Coco, COCO, is pitched short after a 45% monthly rally, arguing investors are overextrapolating coconut water category growth.

COCO $3.4B
Value Investors Club 1 click

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