IL Value Investor

@BastianelliLore may be chicken & egg

$ODD – Are they trying to diversify away from $META? Anyone with Premium access to SimilarWeb who can check the March data?

התרגשות פשוט אדירה. חברת החדשות שלנו היא עוגן משמעותי בדמוקרטיה הישראלית. כמה פעמים ניסו לנתץ אותנו, כמה פעמים ניסו לפגוע בנו ולרמוס אותנו, פרסונלית ובכלל. וכל מה שעברנו בשנים האחרונות רק חיזק את ההבנה כמה חשובים הגב והתמיכה בעיתונות הישראלית. אסף רפפורט עשה כאן מהלך מדהים יחד עם קבוצת משקיעים איכותית והצוות שלו - הם רוצים לבנות עתיד טוב יותר לכולנו, ותקשורת חופשית זו ציונות בהתגלמותה. הם יכלו להינות מהפירות ולנוח קצת. אבל רפפורט והם בחרו אחרת. מעבר למוכנות לשים הון אישי שעשו בעשר אצבעות, צריך אומץ אדיר כדי להתייצב ולתמוך בעיתונות אמיתית בעידן מכונת הרעל. צריך חזון כדי לרצות להצעיד את כולנו קדימה. מתן חודורוב ניהל כאן מאבק מדהים לעתיד הערוץ, אחד מיני רבים, ושוב ניצח. שכבה על שכבה על שכבה, הוא לא השאיר שום מקום להפסד. זאת חתיכת היסטוריה בעיתונות הישראלית - ובדמוקרטיה הישראלית. בהצלחה לכולנו.

@OddityOddballs Can you DM me?

$ODD has a problem. In all likelihood, the meta algorithm now considers trials in $ODD's try-before-you-buy as purchases and cancellation of trials as returns. Given TBYB pulls in a lot more people to try a product, 'return rates' are inherently a lot higher. Meta therefore now erroneously flags $ODD as a high risk vendor and is pushing up CAC. The simple solution would then be to move to regular purchases right? Wrong! TBYB is incredibly valuable to $ODD because it gets their product in a lot more hands, many of which then become customers. Without it, growth would drop fast. So $ODD needs to find ways to keep conversion high, while keeping returns low. In my view, $ODD has at least 10 ways of doing this: 1. Remove TBYB for brands and products that historically have had high return rates, while keeping it for others. For example, SpoiledChild collagen likely has lower return rates than Il Makiage foundation. $ODD seems to be doing this by removing TBYB from the regular Il Makiage and SpoiledChild websites, while increasing the return periods to 30 day and 60 day trials respectively. Methodiq offers the first month completely free. 2. Remove TBYB for low-intent customer flows, while keeping it for higher-intent flows. For example, someone who has already entered their email on the website is relatively high intent compared to someone who just clicked on an ad. 3. Make checkout flows for TBYB clearer and highlighting card authorization. This will deter low intent buyers. 4. Dial up risk tolerance in pre-authorization so you only pre-authorize the highest risk customers. 5. Having a compelling alternative to TBYB, like a well-explained and branded satisfaction guarantee, like Prose has (see image). This would screen out the lowest intent buyers (those with no intention to pay), while keeping most of the rest. $ODD is failing on this front. Messages have grammatical and punctuation errors and there is no branded Glam Guarantee or something like it to make it stand out from every other website. Returns in any condition is also not mentioned enough. 6. Better segment users on Meta to only offer TBYB ads to higher propensity buyers. 7. Develop more muscle for marketing on other platforms, like TikTok and YouTube. These are lower returning, but they're not twice as low returning, which is where Meta currently sits. 8. Introduce novel distribution methods, like referral programs. 9. Introduce new buying tiers, like an Il Makiage subscription where people get to pick a second item for a heavily reduced price. Or a loyalty program where they get to pick any item for free every second purchase. This increases stickiness and AOV. Product costs are only 15% of revenue and delivery costs wouldn't go up a lot so they have a lot to play with here. 10. Send higher value mystery gifts that likely result in conversion or start sending samples of highly rated items. Same reasons as no. 9. (All of this assumes that this is a permanent issue that can't be solved by reconfiguring the signals $ODD sends to Meta, for example, by only labeling retained products past the TBYB period as purchases).

@cesarsroy @weary_centurion 42% is prob aligned with the management guidance?

@weary_centurion The observed sales on credit card data fo feb shows -42% yoy. Maybe this one isnt a quick turnaround.

$ODD Sub $700M market cap The lower the better for me $103M buyback authorisation Locking in exponential future returns by allocating capital in the best way possible $776M in cash and a $350M revolving credit facility Never seen anything like it Not financial advice

@weary_centurion @ValueNotDeadYet revenue or new revenue

@ValueNotDeadYet Meta only affects 25% of revenue…biggest advertising partner, not their only advertising partner Also, highly unlikely Oran would stupidly throw dead money after empty growth He would switch Meta off completely before he did that

The real question for $ODD is what is happening on Meta? ➡️Non scientific but 👇 is what I noticed this week. Would need data from past as well ➡️TBYB still there but also a lot of Free Return and Exchange ads. ➡️Either changes are working or they are throwing mud at the wall

@ValueInvest2020 @DmitriTrades @DrJebaim Why do you believe this to be the case? @ValueInvest2020

@DmitriTrades @DrJebaim The further decline in the GM% from 23.9% in Q3 to 21.9% was disappointing, but it seems that should be the extreme low point. The GM% comparison for Q1 (29.7%) and Q2 (28.1%) will probably be negative for 2026, before turning positive in the 2nd half.

@DmitriTrades thoughts on the ER for $PSIX?

@bjmtweets @OddityOddballs Google trend spoiledchild vs il makiage They are to tbyb and wasn't hurt at all (googling kicks in in the return phase)

@il_value @OddityOddballs Meta killed TBYB. It could also be for reasons they don’t want to fully admit.

Does $ODD need try-before-you-buy to grow? $ODD may return to TBYB in the future if the Meta algorithm gets fixed, but for now, it's diligent to assume that $ODD will need to transition to regular purchasing. Three questions will determine the impact: 1. How much conversion lift does TBYB deliver? 2. How much conversion lift can alternatives deliver? 3. What will unit economics look like after a transition? 1. TBYB conversion uplift. It's hard to get clear sense of how much TBYB lifts conversion. Research online shows TBYB lifts conversion by 5-15%. But there are caveats to this research. The research assumes a simple change to a checkout flow, not an active promotion thereof in marketing and a checkout flow focused on TBYB, as is the case with $ODD. On the other hand, the kind of research shown is typically promotional, so probably exaggerates. Another lens is optimized checkout flows, like buy-now-pay-later. Research here mentions 20-30%. This seems unlikely, given customers actually have to pay, albeit later. Even initial payments are typically higher than TBYB. The only difference could be from less user friction from typing card data. So let's also look at Shopify checkout. Research here also suggests a 20-30% uplift. Again, I assume the research you come across here is promotional and comes from people trying to sell their Shopify installation services. I think taken together, the impact of conversion is 15-25%, with 20% at the mid-point. 2. Conversion from alternatives $ODD has several options to remain high converting. They could implement a highly advertised satisfaction guarantee (probably rebranded to something more exciting), like a banner that says "We stand by our products. You can return any item, regardless of use, in 60 days, no questions asked". This still wouldn't be as high converting, as it would still ask people to consciously hand over money. This feels different. But it would stand out as a special feature, if advertised and implemented well. I think this could lift conversion effectively by around 10%, compared to having a regular checkout. I think it would mostly filter low-intent buyers who are responsible for a disproportionate share of returns. You see these stories on Trustpilot, who were shocked by a $45 dollar hold on their card, as they needed that money for groceries. These would never be customers. Another option is to implement some of the high converting checkout options mentioned above, like Shop Pay and BNPL. I'm not fully clear how easy this is or what the other implications are but I don't see a reason why this isn't technically possible. 3. Unit economics after transition $ODD's unit economics are very strong so it can suffer some LTV / CAC degradation. Even including last year, which had CAC inflation through part of the year, CAC Payback (CAC / incremental GP) was two years, which is better than 80% of SaaS. LTV / CAC was three times in the first 12 months at IPO, and have only gotten better since, with the introduction of Il Makiage Skin and SpoiledChild. It's hard to be precise on the impact but a 25% conversion degradation, compensated with a 10% improvement from a new satisfaction guarantee, shouldn't be an issue. If other high-converting checkout options can be implemented without disrupting $ODD's highly effective checkout upsell flow, then the impact on $ODD's conversion could be nill. (Of course this would take away the latent future upside of this, if $ODD would have implemented this in the future while still having TBYB.) Other considerations All optimized checkout flows, whether Shop Pay, BNPL or TBYB, also mention the average order value goes up. This makes sense. When you remove friction, not just more people buy, but they buy more. I'm not sure if there is still a separate drag on AOV from a different checkout flow. Again, if $ODD starts implementing BNPL options or Shop Pay, while maintaining its own upsell motion, there isn't an issue. If a focused satisfaction guarantee presents a drag on AOV, then that could be another hit. But $ODD also has other options here. Cost of goods sold are very low, at 15% or so. Delivery costs are another 15% but can mostly be split when a second product is added. So $ODD has the option to up its mystery gift game. Another one that I've long considered is that $ODD may introduce something like an Il Makiage subscription, rather than a product subscription. The way I imagine this, is that in the checkout flow, you now see three options: 1. regular purchase 2. product subscription (no delivery costs, 20% discount, mystery gift) 3. brand subscription (no delivery costs, pay 20% MORE, pick a second item of your choice for free). This would be a cheap way for them to improve stickiness and upsells. Now, I wouldn't hang my thesis on some magical invention of a brand subscription. My thesis is based on my trust in a company that has pulled off magic repeatedly, such as becoming the largest DTC beauty brand within a couple of years (with the no. 1 prestige foundation, no. 1 prestige primer and no. 2 prestige concealer in the US and many other markets), building two brands to over $200 million in under four years, while there are only 14 brands, out of 1800 in the US, that achieved this milestone, and many others. These achievements reflect a highly skilled organization that can solve problems. If there is a way, they will find it, and I think there are many ways.

@OddityOddballs Been long, bought more this week. People confuse tactics with strategy. TBYB is a strategy. The 14-day money hold is a tactic. A tactic can deteriorate without killing the strategy. For all we should care, TBYB is still here.

Many of the ads say "Try it before you buy it" or "Free exchanges and returns". They used to say "Try it for free". From what I can tell, the "Try it before you buy it" now often refers to their generous guarantee program of 60 days, any condition, free exchanges & returns. I think the language there is somewhat misleading. They need to find a way to better harmonize the language with the offering, like "Try it for 60 days". Small fixes. I can still get traditional TBYB without paying upfront for some products, like foundation. My assumption is that they still offer it for products where they know the return rate is low. They probably are also segmenting their targeted users harder to only offer traditional TBYB for users that correlate with low return behaviour. Remember that TBYB isn't being 'punished' by Zuckerberg, as some beauty trolls are claiming as they take time off from their regular activities of throwing stones at princesses. The algorithm simply weighs return rates more negatively as it did before as this is often correlated with poor products. For $ODD it correlates with more people getting to try something for free.

@babykswanson They didnt know until early-mid Jan

$ODD just hear me out. ODD sells on their own website. *They* are the ones sending back signals to Meta about returns/refund. What does this mean? 1/ they f**** up 2/ this is not a binary event This is fixable. They can finetune and recover. Will take time but will happen.

@zoozai_invest Not sure. I think that ODD strategy is not to compete with others on high acquisition prices during Q4 and win a cheaper cohort during Q1. Things are not dichotomic

@il_value What?! Honestly, I'd rather it be a lie than the truth.

A few thoughts about the $ODD case: 1/ Over the past few weeks, 3 major investment entities disclosed sizable stakes in $ODD: Morgan Stanley with 8.3% Baillie Gifford with 16.1% FMR with 7% If management sat on material info longer than allowed, I’m pretty sure these guys will do anything they can to get compensated. One thing I’m almost certain about: As of Dec 3, management didn’t yet know about the advertising algorithm change. Why? An insider, Niv Price, was allowed to sell ~$500K worth of shares. I highly doubt insider selling would be permitted if material adverse info was already known internally. The freeze would come immediately.

@zoozai_invest They said they saw it but were notnable to response during messy q4...

2/ A lot has already been said about the situation. But one question still bugs me: How did the change go unnoticed long enough to cause this much damage? $ODD ’s sales cycle shouldn’t be that long, probably around a week, give or take. So how did marketers not flag this earlier? Either: They didn’t see it in time (which raises monitoring concerns), or They saw it- but couldn’t react (which may be worse). The price is tempting if this is a temporary glitch. If it’s a signal of deeper fragility in the model, I’ll pass. Curious to hear other views.

@PD13158196 @tiktok_us Management said they became aware at H2..

$ODD & $ELF might have a TikTok problem Doubt the algorithmic issue is w $META but rather w @tiktok_us On Jan 22nd TikTok officially became a US entity. Yet ByteDance didn’t share all the algos. IF TILTOK TARGETING IS DEFICIENT $ELF WILL ALSO GET HIT! $ELF DEPENDS ON TIKTOK

@EliyahuCapital U.S growth is stabilizing...

מה קורה ב $four 💀💀

@OddityOddballs Long, bought more yesterday. Why fake it? More likely genuine. Real question — if this strategy's done (not sure it is) — can they still acquire new users at the same pace and price?

Public service announcement: $ODD's algorithm issue at Instagram isn't because Meta decided try-before-you-buy, as practiced by $ODD, is unethical. It is because the algorithm views high return rates negatively because high return rates are usually a reliable signal of a low-quality product. But high return rates at $ODD imply that $ODD is getting a lot of people to try its products for free (at least for now) and has an easy returns process. So it's the exact opposite of what is being claimed. If anything, there seem to be a lot of people ordering $ODD products who have, arguably unethically, no intent of keeping the items but just want to feel like a rich girl for a day.

@KabraxFX Lol

$ELF has always been the more solid cosmetics play. $ODD taking a massive hit from their Try Before You Buy.

@blondesnmoney According to markets, most likely everyone else think the only thing agents won't do is replace land

Anyone else think travel agents are the next thing to be disrupted? Forward a flight confirmation email to Cluade and it takes care of your hotel for you? Seems like it is bound to happen eventually.

@TheBigShortIL @liorvider איך משפיע שער הדולר על הביקושים פה?

האם הבורסה בתל אביב מאבדת קשר למציאות? 🚨 בהמשך לפוסט הקודם, הנתונים של בלומברג חושפים מציאות מדאיגה - מכפיל הרווח החזוי של מדד ת"א125 לשנה הקרובה חצה לראשונה את רף ה-20. לשם השוואה, בנקודות השיא הקודמות של השוק המקומי, המכפיל הגיע לכל היותר ל- 15. אנחנו נמצאים כיום בשיא היסטורי של תמחור לעומת העולם: הפער בין מכפיל הרווח של ה- S&P 500 לבין ת"א125 הוא כמעט הנמוך ביותר אי פעם. ביחס למדדי העולם והשווקים המתעוררים - המכפיל הישראלי נמצא כעת ברמה הגבוהה ביותר. האם השוק המקומי הפך להיות יקר מדי והתנתק מהפונדמנטל, או שמדובר ב"נורמלי חדש" שהמשקיעים חייבים להתרגל אליו? קרדיט גרף: כלכליסט ומיטב ברוקראז'

@damianplayer @0xHorseman Meaningless

your timeline convinced you AI is in a bubble. talk to a boomer above the age 35 for 5 minutes. most people don’t even know what claude is.​​​​​​​​​​​​​​​​ kind of wild when you zoom out.

@RealHerbHoover May I discuss that with you?

ChatGPT 5.1 and Gemini 3 came out almost exactly 3 months ago. I let them take over my portfolio and I’m up 69.420% since then. This is a 100% real screenshot.