Updates on Wayfair, Farfetch & Vermilion Energy

Developments and updates on W, FTCH & VET

For those of you in need of motivation, I have written a number of Education & Mindset essays on investing which I have curated here: LINK

In the meanwhile I am working on a series of essays on the global monetary system and its current dynamics. These themes reinforce each other and could culminate in significant developments with serious repercussions in a key area of investing, CURRENCY RISK.

There is no certainty in financial markets, only hypothesis testing and decision making under uncertainty. While I am not predicting that the events I will write about in these essays will certainly occur, at the same time, I see them as unavoidable if current trends persist into the future. Therefore I find it prudent to form my hypotheses and test them in the markets as events unfolds. The essays will follow on Philoinvestor soon.

“It's not whether you're right or wrong that’s important, but how much money you make when you're right and how much you lose when you're wrong.”

-George Soros

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Foreword

• Wayfair: I wrote about the company when it was selling for $132 per share in March 2022. The war was just getting started and EU economies were being directly affected. Even if the US was further away from the war - economic uncertainty, fuel prices and spiking inflation coupled with rate hikes affected consumer confidence negatively. Below I will write about how Wayfair benefited positively from Covid at first but then negatively in post-Covid times. In my update I will share my views of where I think things went wrong and what management is doing now to transform the company into a leaner, more agile, cash-flow generative operation with a lot of growth ahead. PIECE.

• Farfetch: I wrote about Farfetch when it was selling for $29 per share in January 2022. Since then Farfetch lost the totality of the Russian market, was materially affected from the lockdowns in China as well as the drop in global consumer confidence. Wayfair and Farfetch, both being online marketplaces are part of the most hated areas of the market right now - long duration, non-profitable tech. Additionally, these companies are a bit black boxy making them tough to analyse and understand. I believe this is one of the reasons why investors think they are uninvestable. PIECE.

• Vermilion Energy: I wrote about Vermilion when it was selling for US$25 / C$31 per share in August 2022. At the time European gas prices were at extremely high levels and investors wanted in on the parabolic gas price move. A few months later and the EU has mandated for gas consumption reductions, causing a drop in TTF prices, and slapped a windfall tax (calling it as solidarity contribution) on European energy producers. Investors aren’t happy and the price is now at ~$16. THREAD. PIECE.