In today’s briefing:
- Startek Inc. – SRT US 55% Owner Proposes $5.40 Cash Per Share Squeeze Out
- Bilibili: All Things Point to Slowdown in Earnings Growth
- Upstart Holdings: Fast-Growing, Profitable, Cash Generative with Share Buybacks
- Upstart Holdings: Slowdown In Revenue Growth And Tightening Of Credit Markets
Startek Inc. – SRT US 55% Owner Proposes $5.40 Cash Per Share Squeeze Out
- Singapore-Based private equity firm Capital Square Partners (“CSP”) engineered combination of Aegis Global and “old” Startek in 2018 to create “new” Startek.
- Microcap business process outsourcing (“BPO”) company runs outsourced customer contact centers, has improving sales and profitability, and a declining stock price.
- On 20December2021, CSP disclosed that it had submitted a “preliminary, non-binding proposal” to acquire all outstanding shares of SRT US not already owned by it for $5.40 per share.
Bilibili: All Things Point to Slowdown in Earnings Growth
- Bilibili Inc (BILI US) reported 4Q2021 results last week where revenues increased 50.6% YoY to RMB 5.8bn while operating losses increased to RMB 2bn compared to RMB 903m in 4Q2020.
- This marks the lowest YoY growth in top line since 2Q2019. Though all segments experienced YoY growth in revenue, we have observed that the growth is slowing down.
- The company also has announced a share buyback of up to US$500m of its ADS over the next 24 months
Upstart Holdings: Fast-Growing, Profitable, Cash Generative with Share Buybacks
- Upstart Holdings Inc (UPST US) is both a consumer Internet brand as well an online loan origination platform.
- Upstart is a rare fintech that has established credibility by delivering high growth with profits and cash generation. The healthy 2022 outlook underscores the long-term potential.
- While the ongoing market volatility is a near-term risk, the tech sell-off presents an opportunity to gain exposure to a good story at an attractive valuation.
Upstart Holdings: Slowdown In Revenue Growth And Tightening Of Credit Markets
- We see limited upside potential for Upstart Holdings Inc (UPST US) shares after reporting a record 200%+ YoY revenue growth rate in CY’21.
- Our calculations suggest insiders sold ~$1.5 billion worth of Upstart shares since August 2020, including Third Point, CEO of Upstart Holdings, and management of the fintech company.
- Rising interest rates and tightening of credit markets may negatively impact revenue, keeping in mind that Upstart Holdings Inc (UPST US) primarily facilitates unsecured personal loans on the platform.
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