From VIC

”The Year of Efficiency Comes to Redbubble Combined with:
Exceedingly Cheap; 0.15x EV/Sales with 35-40% of market cap in net cash. Peers are valued at .8-3x + sales.

Guiding to steady state profits in 2H23

Hidden Asset: Subsidiary Teepubblic +39% CAGR revenue growth rate since 2018-> grew from $35 to $135 million going from 12% to 30% of total revenue. Was profitable at acquisition, grew last year as well, and smoked the parent company in success. Teepublic is NYC based and is likely worth 1.5x sales + cash = +100% just for Teepublic alone

Return of Owner-Operator as CEO: Martin Hosking (owns $16 million worth of stock or 15% of the company) returns as full-time CEO March 2023: As CEO Martin has grown revenue at +39% top-line growth compounded annual revenue growth, +40% compound annual gross profit growth, and generated the current EV in cash flow. As CEO Martin’s track record of success RBL has traded at roughly 2x sales as a public company vs. the current 0.15x. I have known Martin for 5 years, and he is massively uncomfortable not making money as he track record has shown over the last decade.

Monetization Improvements with AI roll out to the content library on search, and Artist Tiers which will add to profits started May 1st

Further Cost Cuts:

Potential M&A: Zazzle, Etsy, eBay, Amazon, or another large digital marketplace RBL at 1-2x+ sales = 5-10x the current valuation.

Strong talent base from other large and successful digital marketplaces: Uber, Etsy, AMZN, Target, REA, and Wayfair

#1 global digital marketplace for independent artists-> Strong incentive structure w 800,000 global artists earning $90 million a year in Redbubble royalties + $85 million in direct marketing or reach of $175 million a year. We think as this continues to grow to north of $200 million the ratio of buyers/artists will increase from 10 to 1 to something more like ETSY at 20 to 1. More brand awareness, given effective reach.

Winner take most industry structure, like every other large scale digital marketplace they are very hard to build but at scale the moats are deep and businesses become significantly more valuable-> Etsy, DASH, SHOP, Ebay, etc

We think there is a reasonable chance that RBL achieves both revenue growth and targeted margins to $600 million in 24 months with 13% EBITDA margins which would equate to $78 million or the current enterprise value. If this occurs the stock would likely be closer to 15-20x from the current price assuming a 15x EBITDA multiple”