Wise plc
Thesis
Wise is evolving from a consumer-facing company to a platform business, which is promising for its future growth. The company is already profitable and has significant cash balances, making it well-positioned to capitalize on the challenges faced by unprofitable competitors. Additionally, rising interest rates have created an unrecognized earnings stream from customer balances, enhancing its investment appeal.
Did it work?
The stock price has declined by 98.2% since the pitch, indicating a significant failure in the investment thesis. Despite the initial promise of Wise evolving into a platform business and being profitable, the drastic drop in price suggests that the anticipated growth and benefits from rising interest rates did not materialize as expected. This performance is inconsistent with the long position taken in the pitch.
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