Author Topic: RBL - Redbubble  (Read 2339 times)

Arski

  • Jr. Member
  • **
  • Posts: 80
RBL - Redbubble
« on: February 19, 2021, 08:28:34 AM »
After someone mentioning Bonsai partners with a 60% conviction in Redbubble, I became interested.

A short overview of the business:
Redbubble is a marketplace for people to upload their designs (on t-shirts, stickers, bags, socks, masks and a whole lot of other things). RBL operates as a  print-on-demand business, which results in low delivery but looks like a lot of people still love it.
I do also like it because of the beautiful designs you get on all sorts of things for a legit price, but haven't ordered something yet.

This platform makes it easier for artists to sell their designs and makes it easier for people to get nice, simple but differentiated products.
RBL gets 30% of a sale, a third party manufacturer gets 40% and the artist get 20%. (If I remembered it correct.)

That's all I know for now. Maybe someone has a thesis or something he wants to share?


spartansaver

  • Sr. Member
  • ****
  • Posts: 283
Re: RBL - Redbubble
« Reply #1 on: February 19, 2021, 08:35:31 AM »
He writes about it several times in his letters. I would say that I think he's had more than 10x on it, so I'm not sure I'd say it's his highest conviction (maybe it is), he's just let it run a lot.

Arski

  • Jr. Member
  • **
  • Posts: 80
Re: RBL - Redbubble
« Reply #2 on: February 19, 2021, 08:38:34 AM »
I forgot about the financials:
Has been growing 25%-40% in sales over the past years and became profitable in 2020 for the first time.

I expect their sales growing into the future at least at 25% per year and widening their from 10.7% in the last half year to 15% in 2021, and 20% in 2022.

So, with those expectations they have 77.5 million AUD operating income and thus a forward EV/EBIT of 18.

Please correct me if you think I'm wrong.

Jurgis

  • Hero Member
  • *****
  • Posts: 5910
    • Porfolio
Re: RBL - Redbubble
« Reply #3 on: February 19, 2021, 02:44:11 PM »
Why doesn't VistaPrint/Cimpress do this and crush the category?

A bit rhetorical question... I know old-cos are slow-cos.  ::)
"Human civilization? It might be a good idea." - Not Gandhi
"Before you can be rich, you must be poor." - Nef Anyo
"Money is an illusion" - Not Karl Marx
-----------------------

cameronfen

  • Hero Member
  • *****
  • Posts: 732
Re: RBL - Redbubble
« Reply #4 on: February 19, 2021, 07:01:48 PM »
IIRC their growth was slowing to around 10-15% and it seemed to me like they acquired teepublic at a decently high multiple which I though was a move to hide their declining growth/generate growth inorganically, which was when I sold (bad decision obviously).  Then COVID happened and growth accelerated again.  This is all based on memory when I last owned it so ymmv. 

Arski

  • Jr. Member
  • **
  • Posts: 80
Re: RBL - Redbubble
« Reply #5 on: February 20, 2021, 05:33:59 AM »
IIRC their growth was slowing to around 10-15% and it seemed to me like they acquired teepublic at a decently high multiple which I though was a move to hide their declining growth/generate growth inorganically, which was when I sold (bad decision obviously).  Then COVID happened and growth accelerated again.  This is all based on memory when I last owned it so ymmv.

Interesting, but I see that their slowest half year of revenue growth over the past 3 years was 25.1%, H2 2019. So how did you get 10-15%?

cameronfen

  • Hero Member
  • *****
  • Posts: 732
Re: RBL - Redbubble
« Reply #6 on: February 20, 2021, 07:30:56 AM »
IIRC their growth was slowing to around 10-15% and it seemed to me like they acquired teepublic at a decently high multiple which I though was a move to hide their declining growth/generate growth inorganically, which was when I sold (bad decision obviously).  Then COVID happened and growth accelerated again.  This is all based on memory when I last owned it so ymmv.

Interesting, but I see that their slowest half year of revenue growth over the past 3 years was 25.1%, H2 2019. So how did you get 10-15%?

You have to back out teerepublic acquisition is my guess. 

ratiman

  • Sr. Member
  • ****
  • Posts: 402
Re: RBL - Redbubble
« Reply #7 on: February 21, 2021, 05:59:45 AM »
You missed your chance when LEAF was at pennies.

Longnose

  • Newbie
  • *
  • Posts: 17
Re: RBL - Redbubble
« Reply #8 on: February 22, 2021, 12:20:12 PM »
He writes about it several times in his letters. I would say that I think he's had more than 10x on it, so I'm not sure I'd say it's his highest conviction (maybe it is), he's just let it run a lot.

I would also recommend looking through his letters. He writes about RedBubble several times. He used to have a sizable position in PushPay (PHPYF) as well. I believe he sold it not to long ago after some news about executive turnover and such. I took a small position in PHPYF based on his analysis after the stock fell. I believe he has some really great insights.

I looked at Redbubble but I have a really hard time buying businesses that are only going up. I feel I may have missed the run on this one.
copy copy copy

Arski

  • Jr. Member
  • **
  • Posts: 80
Re: RBL - Redbubble
« Reply #9 on: February 22, 2021, 01:03:05 PM »
He writes about it several times in his letters. I would say that I think he's had more than 10x on it, so I'm not sure I'd say it's his highest conviction (maybe it is), he's just let it run a lot.

I would also recommend looking through his letters. He writes about RedBubble several times. He used to have a sizable position in PushPay (PHPYF) as well. I believe he sold it not to long ago after some news about executive turnover and such. I took a small position in PHPYF based on his analysis after the stock fell. I believe he has some really great insights.

I looked at Redbubble but I have a really hard time buying businesses that are only going up. I feel I may have missed the run on this one.

I understand that Redbubble seems out of sight because of the 5x since the covid downturn but that's a bias. I would also be happier when I picked the stock up in March. We need to forget the run-up and value the company today and I think it is at least a fair price for the company at the moment.

By the way, I read the letter where Bonsai Partners did a longer write-up about RBL but did get much valuable insights from it, as I remember.