SPAC Deep Dive, subSPAC

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SPAC Deep Dive

Each week we’ll identify and break down for you SPACs that are capturing market share and making an impact.

Equity Capital Markets

<ul><li>PropertyGuru is now the leading property technology platform in Southeast Asia</li><li>The company now serves 37 million buyers across 16 countries and works with 50,000 partner agents across its network</li><li>PropertyGuru is set to go public over the next few months through a SPAC merger with Bridgetown 2 Holdings, in a deal that values the firm at $1.78 billion</li></ul>

PropertyGuru is now the leading property technology platform in Southeast AsiaThe company now serves 37 million buyers across 16 countries and works with 50,000 partner agents across its networkPropertyGuru is set to go public over the next few months through a SPAC merger with Bridgetown 2 Holdings, in a deal that values the firm at $1.78 billion

Will PropertyGuru Face the Same Fate as Zillow

Fundamental Short Selling Research

Eric Fernandez, CFA

TwoRiversAnalytics

Equity Bottom-Up

<ul>
<li>Falling analyst estimates can point to good short candidates.  This is especially true given Wall Street perpetual bias towards buy recommendations.   </li>
<li>The key judgement involves whether the negative sales or estimate revision is temporary or if they are indications of continuing weakness in the business. </li>
<li>These shorts can have very disparate characteristics: they can have high or low beta, be expensive or cheap, be favored or shunned.</li>
</ul>


Falling analyst estimates can point to good short candidates.  This is especially true given Wall Street perpetual bias towards buy recommendations.   
The key judgement involves whether the negative sales or estimate revision is temporary or if they are indications of continuing weakness in the business. 
These shorts can have very disparate characteristics: they can have high or low beta, be expensive or cheap, be favored or shunned.


Breaking Estimates Short Model Flags Beyond Meat, Zillow, Purple & Chegg

TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

Today we want to address Zillow’s decision to exit iBuying and whether or not the 25% share price drop gets us interested in owning Zillow. We will do a followup note later in the week about the overall prospects for iBuying and if we would be buyers of Opendoor or Offerpad. Spoiler alert: We’d buy Opendoor.<div class="content-highlight">Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.</div>

Today we want to address Zillow’s decision to exit iBuying and whether or not the 25% share price drop gets us interested in owning Zillow. We will do a followup note later in the week about the overall prospects for iBuying and if we would be buyers of Opendoor or Offerpad. Spoiler alert: We’d buy Opendoor.Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.

Zillow: What Data Driven Competitive Advantage?

Analysis on GARP with strong economic moats, Moat Investing

Moat Investing

Analysis on GARP with strong economic moats

We are a group of experienced investors that like to dig deeper into stocks to find growth stories at a reasonable price with strong economic moats. We also aim to conduct high-quality analysis by doing deep dive on valuations, key business drivers, risk/reward, and different future scenarios.

GARP with strong economic moats

<ul>
<li>Zillow Homes, their house flipping business, represents approximately 55-60% of revenues as a whole which is difficult to value.</li>
<li>IMT and their Mortgages segment are possible MOAT’s and represent growing margins, however, Zillow Homes may entail some challenges.</li>
<li>Free Cash Flow valuation is very subjective and relying only on multiples-based approaches for valuation reduces our conviction on recommending buying the stock.</li>
<li>Things we are curious about in the future are the impact of the cooling real estate market, improvements in operational efficiency, and the acquisition of ShowingTime.</li>
</ul>


Zillow Homes, their house flipping business, represents approximately 55-60% of revenues as a whole which is difficult to value.
IMT and their Mortgages segment are possible MOAT’s and represent growing margins, however, Zillow Homes may entail some challenges.
Free Cash Flow valuation is very subjective and relying only on multiples-based approaches for valuation reduces our conviction on recommending buying the stock.
Things we are curious about in the future are the impact of the cooling real estate market, improvements in operational efficiency, and the acquisition of ShowingTime.


Zillow: A Tricky Valuation For The Zillow Homes Segment

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Event-Driven

PropertyGuru and Bridgetown 2 announced, on 23rd Jul 2021, that they have entered into a business combination agreement which will see PropertyGuru go public in the US. The transaction will value PropertyGuru at an EV of US$1.35bn and equity value of US$1.78bn.We have looked at the company’s prior listing attempt when it tried to list in Australia in 2019. In this note, we will comment on the current listing arrangement.Link to our previous notes:<ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/propertyguru-ipo-powered-by-singapore-recharged-by-vietnam-but-dragged-down-by-others" target="_blank" rel="noopener">PropertyGuru IPO - Powered by Singapore, Recharged by Vietnam but Dragged Down by Others</a></li>
<li><a href="https://www.smartkarma.com/insights/propertyguru-ipo-sotp-leaves-one-well-short-of-the-low-end" target="_blank" rel="noopener">PropertyGuru IPO - SOTP Leaves One Well Short of the Low-End</a></li>
<li><a href="https://www.smartkarma.com/insights/propertyguru-ipo-agents-q-a-shows-its-stranglehold-in-s-pore-throws-up-some-interesting-nuggets" target="_blank" rel="noopener">PropertyGuru IPO - Agents Q&amp;A Shows Its Stranglehold in S’pore; Throws up Some Interesting Nuggets</a></li>
</ul>

PropertyGuru and Bridgetown 2 announced, on 23rd Jul 2021, that they have entered into a business combination agreement which will see PropertyGuru go public in the US. The transaction will value PropertyGuru at an EV of US$1.35bn and equity value of US$1.78bn.We have looked at the company’s prior listing attempt when it tried to list in Australia in 2019. In this note, we will comment on the current listing arrangement.Link to our previous notes:
PropertyGuru IPO - Powered by Singapore, Recharged by Vietnam but Dragged Down by Others
PropertyGuru IPO - SOTP Leaves One Well Short of the Low-End
PropertyGuru IPO - Agents Q&amp;A Shows Its Stranglehold in S’pore; Throws up Some Interesting Nuggets


PropertyGuru/Bridgetown 2 SPAC Listing/Merger - Second Time Lucky - Some Food for Thought

United States

Zillow Group, Inc. provides e-commerce services. The Company provides information about homes, real estate listings, and mortgages through their website and mobile applications. Zillow serves homeowners, buyers, sellers, renters, and real estate professionals throughout the United States.

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Zillow Group Inc C (Z US)

Will PropertyGuru Face the Same Fate as Zillow

PropertyGuru is now the leading property technology platform in Southeast Asia. The company now serves 37 million buyers across 16 countries and...

subSPAC

Breaking Estimates Short Model Flags Beyond Meat, Zillow, Purple & Chegg

Our Breaking Estimates Short Model Calls out Beyond Meat, Zillow, Purple & Chegg as short candidate. Presented here with commentary and the...

Eric Fernandez, CFA

Zillow: What Data Driven Competitive Advantage?

We are puzzled by Zillow's sudden exit from iBuying given its supposed data driven competitive advantages. While the remaining IMT biz is...

Aaron Gabin

Zillow: A Tricky Valuation For The Zillow Homes Segment

Zillow Homes, their house flipping business, represents approximately 55-60% of revenues as a whole which is difficult to value. IMT and their...

Moat Investing

PropertyGuru/Bridgetown 2 SPAC Listing/Merger - Second Time Lucky - Some Food for Thought

PropertyGuru and Bridgetown 2 announced, that they have merge to take PropertyGuru go public in the US. The transaction will value PropertyGuru at...

Sumeet Singh

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