$CDON is the most asymmetric investment I’ve seen in many years
 
Any student of e-com marketplaces $AMZN, $MELI, $SE, $ALE.WSE, $OZON knows - these are incredible businesses w/ deep moats, no capital required to grow.
 
7.5 to 15x upside by 2026

I #spinoffs!!!
 

$CDON is the leading Nordic e-com 3P marketplace
 
- 80% of $CDON biz is from its 3rd party marketplace ==> going to 100%

- pure play on a hyper growth marketplace with powerful network effects + flywheel
 
- VERY EARLY stages of a secular shift to marketplaces in the Nordics

- GMV for $CDON was ~2bn SEK for 2020, growing 100% YoY (vs. market cap today of 2.4bn SEK, net cash, so EV/GMV ~1.2x)

- Nordic e-commerce is ~250bn SEK (and growing > 10% / yr)
 
$CDON GMV is ~1% of Nordic e-com (!)

- By 2026, Nordic e-commerce should be over 400bn SEK

- As the leading, largest Nordic marketplace, I think 20bn to 40bn SEK GMV is very realistic by ‘26 for $CDON, this is 5-10% of total e-com

GMV sanity check:
- only 1,385 merchants today vs 100k+ e-com sellers just in Nordics
- Swedish merchants say shift just beginning now

- $MELI has >30% of ecom GMV in mature markets, ~8% in newer ones
- $ALE.WSE is 15%

Q: what does this mean for $CDON earnings power and stock price?

2016 fee revenue of 2.4bn to 4.8bn SEK (take rate of ~12% of GMV, with ads, loyalty, payments)

EBIT of 1.2bn to 2.4bn SEK (mature marketplaces run @ >50% EBIT margins AFTER marketing spend)

==> at 15x EBIT (eBay at 13x today, only grows revs 10%) ...

$CDON shares to 3,000 SEK to 6,000 SEK vs. 402 SEK today

7.5x to 15x today’s stock price by 2026

Sanity check vs. comps:
 
- $MELI grew 62% YoY and trades 5x EV/GMV
- $ALE.WSE grew 51% YoY and trades 2.7x EV/GMV
- $OZON grew 61% YoY and trades 4.9x GMV

At 3x EV/’21 GMV, $CDON would be ~1,500 SEK / share
At 4x EV/’21 GMV, $CDON = ~2,000 SEK / share ...

... TODAY!

Catalysts:

- February 4th is first earnings release as a public company
- Sell-side coverage ($CDON is a prominent Swedish internet company, will be covered)
- IR in English
- Q4 growth should be huge YoY
- Merchant growth accelerating (still relatively few vs. total)

- Spinoff dynamics abate —> no longer an orphaned special sit 
- Earlier in its S-curve ==> more upside
- Profitable and generates cash as operating leverage kicks in 
- Easy to pencil out multi-year scenario of stock being up 10-20x
- Advertising and subscription fees

Why Does Opportunity Exist?
 
- Spinoff with no analyst coverage, no roadshow
- Consolidated financials mask the fact that marketplace is 80% of business and will go to ~100% (3P is core focus)
-  Spinoff docs in Swedish (will be English going forward)
- Quiet period til Feb 4

References:

- IR deck: https://www.bequoted.com/bolag/cdon/download/?file=presentation-80841/Presentation-CDON-2020.pdf

Disclosure: I own $CDON
Do your own work
The above is my analysis

Prove me wrong!