optionsmaster

@dhairyatandon08 Mar. is historically the worst month for UPWK, in that the stock trades lower every Mar (start vs. end) & has done so every year of its existence. There's definitely more room to drop. Next support is ~$11.60, which it could hit in Mar for sure. $8.85 is the next pt (6/24 low).

@Le1sk4 UPWK has always been traded by institutions on a revenue multiple vs market comps. So P/E has always been irrelevant for this stock ticker.

$UPWK Forward P/E 5🤔

@TokyoDeepValue The chairman's cash on the balance sheet pays for our US debt. So we should be thankful and enjoy their sacrifice.

I flew to Osaka with a 14-page activist letter, a translated copy of my proposed slate of independent directors, a slide deck on capital allocation reform, and what I believed, at the time, was a clear and reasonable demand: that the company, which was sitting on cash equal to 180% of its market cap, return a portion of it to shareholders through a special dividend. I had been working on this campaign for nine months. I had hired a Tokyo-based proxy advisor. I had built a 6% position through patient accumulation. I had, by every framework I understood, done the work. The chairman, who was 81 years old, received me in a tatami room above the company's headquarters, which sat over a soba restaurant that had been in the same family for four generations. He was wearing a navy suit. He bowed at an angle I could not, with my Western training, accurately reciprocate. He gestured for me to sit on a cushion. I sat. A woman of approximately his own age entered, silently, and placed a small ceramic cup in front of me. The cup contained tea. The tea was lukewarm. I did not yet know that the lukewarm tea was the entire negotiation. I began with the deck. I had prepared it carefully. I had translated the headers into Japanese. I walked him through the capital structure, the unproductive cash, the historical return on equity, the peer comparison, the proposed dividend. He listened. He did not interrupt. When I had finished, he said, in soft but clear English that I had not been told he spoke, "Thank you for traveling so far." Then he stood up, slowly, and gestured for me to follow him. We walked down a set of wooden stairs that creaked in a way I cannot adequately describe, through a hallway lined with black-and-white photographs of men I did not recognize, and into a small workshop attached to the back of the building. In the center of the workshop was a lathe. It was old. It was, the chairman explained, the original lathe his grandfather had purchased in 1923 to manufacture the first product the company had ever sold, which was a specific kind of brass valve fitting used in steam locomotives. The locomotive industry had been gone for 60 years. The lathe was still running. "My grandfather operated this machine," he said. "My father operated this machine. I operated this machine, as a child, before school. The factory you visited yesterday produces components that descend, in an unbroken line of design, from the work that began on this lathe. The cash you wish me to distribute is the result of one hundred and one years of refusing to do anything that would shorten the life of this company. I cannot distribute it. I am not, in the deepest sense, the owner of it. I am the custodian of it. The owner is not yet born." I did not have a response. I had prepared for many possible responses from him. I had not prepared for this one. We returned to the tatami room. The tea was refreshed. It was, again, lukewarm. The chairman asked me about my family. I told him about my wife, my two children, my parents in suburban Connecticut. He listened with what appeared to be genuine interest. He asked the ages of my children. He nodded gravely when I told him. He asked whether I had ever shown my children the work I do. I had not. He asked whether I would, when I returned. I said I would consider it. Four hours passed. I was served, at various points, three more cups of tea, a small dish of pickled vegetables I did not recognize, and a single piece of mochi that the chairman's assistant placed in front of me with both hands. Nobody mentioned the activist letter again. Nobody mentioned the dividend, the directors, the deck, the proposal, or the 6% position. We talked about the cherry blossom season, which was apparently late this year. We talked about American baseball, which the chairman had followed since 1962. We talked about a poet I had never heard of, whose work he recited a single line of in Japanese and then translated for me, slowly, into English, and which I have, in the three years since, been entirely unable to locate again. At the end of the meeting, he stood. He bowed. He thanked me, again, for traveling so far. He said he hoped I would visit again, perhaps with my family, perhaps in the spring, when the city was at its best. He did not, at any point, acknowledge the proposal. He did not decline it. He did not engage with it. He simply, through a series of small and almost invisible movements that I am still trying to understand three years later, allowed the proposal to dissolve into the air of the room, until by the time I left the building, it had ceased to exist as a thing that had been said. I flew home the next morning. I withdrew the campaign two weeks later, in a quiet letter to the proxy advisor that cited "ongoing discussions" and was technically not a withdrawal at all but was understood, by every party who received it, to be one. The position I sold over the following six months at a small loss. The chairman is still alive. The lathe is still running. The cash is still on the balance sheet. I cannot, even now, explain what happened in that room. I went in as an activist, with a deck, a translator, and a six percent position, and I came out as a guest who had been thanked, very politely, for visiting a man's home, and who, somewhere in the four hours between the first cup of tea and the last, had been quietly, gently, irreversibly, and without a single raised voice or harsh word, defeated. I think about him often. I do not think he thinks about me at all. This is, in some sense I am still working out, the entire lesson.

@ValleyFallsRI If you are trying to size the potential takeout value for the company (e.g., UPWK), then you have to look at this from a EV perspective & its implied comps. Then back-solve for the implied equity value & stock price. Compare vs. market price to see if there is an arbitrage play.

@optionsmaster69 $1 bill market cap with no debt and $300 mill cash. Do not use the EV of $700 mill. Use $1 bill.

Unless a company is about to get taken over EV framing for companies with a net cash position is pointless. Cash can evaporate when fundamentals deteriorate and or management does dumb things, which is often for a large % of public companies. I.e. they make an acquisition.

@ValleyFallsRI Isn't that why one would use EV multiples instead? Maybe I'm missing something here.

Just ignore the net cash as if it's not there when doing a valuation.

@undrvalue Potential for -25% loss buying now (when stock moves down to $6). Upside is potential to make 50%, but only if CEO is changed out this year (stock moves back to $12).

What’s the bear case for Upwork at 5x forward PE, growing earnings with a stable topline. Is it not free money here? $UPWK

@ColesTrades Your and idiot. Stop shilling for views when you have no money to trade. BMNR is a good buy if you can get in at a substantial position and ride this up to their 5% announcement. If you are buying just 1 share doesn't matter then what price u buy as you will make shit.

$BMNR is looking very good right now! The Clarity Act will be passed, Crypto will surge, and $BMNR will follow I’M BUYING!

@taobanker Predictable miss on growth and fcst by $UPWK.

$upwk well damn wtf

@stwboerse The wishful bull case based on Enterprise/Lifted will be officially quashed as we head into 2nd half of this year. The company has a rudderless leader and poor execution track record.

After the latest sell-off, Upwork $UPWK is now trading at roughly 1x EV/Sales. That is usually the kind of valuation the market assigns to a broken platform company. But Upwork remains highly profitable, is aggressively buying back its own shares, and is launching a new enterprise platform with Lifted. Opportunity or value trap? My new analysis: buff.ly/sSEUGTP

@sTiCaTicus @RawBooty2 @hydnbrwn Well that too, I agree. But while the person in question may have been a "Teflon Donna" in the past, the team is really backed into a corner now with no more wiggle room -> Failed strategy around catalog listings, rebranding, Ent 1.0 & now AI. Lifted (Ent. 2.0) will fail in Q3.

@optionsmaster69 @RawBooty2 @hydnbrwn lol The replacement catalyst was over 2 years ago. Since it never materialized, it can only mean that the board is useless.

purchased more $UPWK today. thank you for the cheap shares. paid ~$8.25

@sTiCaTicus @RawBooty2 @hydnbrwn At $6, the catalyst for replacement kicks in. 😃I agree w/ you, in the absence of this, definitely not a long-term investment play. Instead, swing trade this like most institutional holders are doing.

@optionsmaster69 @RawBooty2 $upwk It's not a buy-and-hold, it's just a trading stock. Until @hydnbrwn is gone, not much is changing.

@kashaziz @Upwork lol, great post!

Upwork laid off ~25% of its own staff while saying the future is smaller AI-powered teams. The platform built on “find work online” just told its own employees: good luck out there. Wonder if they’ll be buying connects too. @Upwork

@ColesTrades Learn your Greeks when trading options, otherwise you will get theta decay'd everytime.

My portfolio is still down over 50% from all-time highs The market has completely wiped out some of my options But I don’t get emotional I don’t let bad trades affect how I invest right now That’s the difference

@ValleyFallsRI Or they could be spending up to $5M per day trying to buy up stock to prop up the price. Based on Q1 activity, this was like catching a falling knife. But near-term, maybe a soft floor for the stock price.

@optionsmaster69 The convertible notes will be repaid at par this summer. $220 mill to $250 mill in cash in Q2 if they don’t buy back more stock. I see them opening this line just for access. I’d be surprised if drawn on.

@ValleyFallsRI Also, not sure if you caught they are taking out a $100M credit facility near-term. You would think with all the high FCF they touted 1 qtr ago that they wouldn't need this. But maybe burning $100M in stock buybacks in Q1 is hurting their buffer.

@Randall7575 Mgmt team is completely in over their heads. Listen to the Q1 earnings call and one can hear the fear in their voices as they have no ability nor idea how to change the business trajectory.

Upwork: “AI is a tailwind 🚀” 3 months later: Upwork: “AI is actually a net headwind 😬 …also we’re firing 24% of the workforce.” $UPWK

@AugustIaco @michakaufman They might be forced to combine at some point by shareholders in a merger of stupidity. But there are structural questions on who drives the broken newco post-merger. This will be a sponsor led & activist driven position if this does materialize.

@optionsmaster69 @michakaufman Despite the recent drawdowns Fiverr remains significantly cheaper. FVRR $11.60 · $UPWK $10.54 Market cap: $FVRR $418M vs $UPWK $1.4B — 3.3x EV: $FVRR $140M vs $UPWK $1.31B - 9.3x Fwd P/E: $FVRR 5.6× · $UPWK 8.6× EV/EBITDA: $FVRR 4.4× · $UPWK 9.0× EV/FCF: $FVRR 1.3× · $UPWK 5.4x

Fiverr $FVRR saw it coming — two quarters before Upwork $UPWK, and restructured six months ahead of the curve. As a shareholder, that’s exactly the kind of leadership that keeps my conviction strong @michakaufman 👏

@outlierrcapital Listening to yesterday's call, they did their best to gloss over any progress/proof points on Lifted. Given the persistent execution issues at UPWK, not a good sign. The likelihood of a CEO change is a better catalyst for the bull case, so maybe a good reentry at some point.

I sold because it seemed the thesis was breaking. I did not have enough conviction to take the bear side and thought this quarter would be a make or break which clearly it was. I'd be more interested on the long side simply because of how cheap it is. They have 1 more chance to show some signs of life with Lifted

$UPWK firing 24% of their workforce $NET firing 20% That's just today and I'm sure there's others It's happening...

@rexman74 Wait for $6s. Just don't know if it'll be low $6 or just touching the $6.8-$6.9 range.

$UPWK Watch this guys........Saying. ~ Right about here too, at this 7s/8s.... ~ Will come back to this again.