Upsidedown's May 2021 Summary

YTD return: -5.57%
Current drawdown from ATH: 25.96%
Portfolio hit all time low drawdown of 36.14% midmonth.

May: -2.84%
April: 6.52%
March: -16.5%
February: +1.26%
January: +7.91%
2020 return: 159%

	May	Delta YTD
My pf	-2.84%	-
ARKK	-7.18%	4.38%
ARKW	0.69%	0.41%
S&P	+5.31%	-18.19%
QQQ	-1.2%	-12.01%
BTC	-37.77%	-27.52%

One lesson I am learning from seeing how Saul and other leading contributors have managed their portfolios through these past four months is to always maintain a high standard for my portfolio irrespective of the mood of the market. I fell victim to SPAC and small-cap frenzy earlier this year and I took positions in companies like Curiosity Stream, Skillz, Katapult, Ondas, Life Sciences etc which only led to unnecessary turnover while making it difficult to stay focused and finally losing conviction only after they were hit hard which led to further negative impact to portfolio performance.

Ticker	May	April	Chg%	Name	
CRWD	12.87%	11.11%	6.54%	CrowdStrike	
SE	11.26%	10.33%	0.28%	Sea Ltd	
ROKU	11.05%	10.05%	1.09%	Roku	
TWLO	9.73%	9.80%	-8.65%	Twilio	
PINS	7.00%	7%	-1.61%	Pinterest	
FVRR	7%	4.71%	-1.33%	Fiverr	
FTCH	5.79%	4.57%	-5.43%	Farfetch	
ZI	5.71%	2.07%	-15.48%	Zoom Info	
MELI	5.31%	5.23%	-13.51%	Mercado Libre	
SNOW	5.17%		2.78%	Snowflake	
CURI	4.29%	5.33%	-26.10%	Curiosity Stream	
LSPD	4.17%	4.09%	3.12%	LIghtspeed	
GHVI	4.08%	4.06%	11.29%	Matterport	
IPOE	3%	2.72%	18.53%	SoFi	
UPST	2.50%	0.62%	35.96%	Upstart	

New Positions

Snowflake SNOW
Poster child for a growth company with constant nosebleed valuation challenges. Their name pops up pretty much every time I talk to my enterprise software friends at other companies, so they currently are a clear leader in a space that every medium/large enterprise would like at least a piece of them in their enterprise landscape which is what allowing them to post those revenue growth metrics. But I worry of a day when they so every slightly miss their numbers and then the market will slash their multiples so hard so fast as has happened to Fastly, Alteryx in the past year. But Snowflake’s products serve higher purpose than those companies and they have stellar leadership so maybe they will continue to post great numbers much like Crowdstike and I want to own them for that potential. I’m comfortable with a 4-6% position as I’m hoping to stay around 12-15 positions and only add if the price dips to ~200 range again.

Other Positions

Upstart UPST

Upstart’s price appreciation from ~29 IPO day price in Dec,20 to ~169 only three months later gave me a pause in taking a bigger position last month but their price moves so fast that I couldn’t add much to them after their ER this month. So currently only a small ~2% position on a high conviction company, so I’m hoping when all this shorting noise around them settles I will have another opportunity to add to them. I like the positioning of their product offerings, unlike a vertically integrated Financial services company like SoFi, I believe Upstart will have a relatively easier path towards growth and profitability with their platform approach servicing multiple banks that cater to different segments of the lending industry.

ZoomInfo ZI

A cloud-based information platform used primarily by sales professionals to identify and target their highest-value potential sales targets. Founded in 2007, based in Vancouver, WA and founder led.
Every so often when I try to look up a person at a client company, I’m usually expecting to see Linkedin popup in search results, but it is ZoomInfo that shows up most of the time. It is quite amazing how ZoomInfo gathers all that data and for the most part their information is pretty accurate from what I see. As presented on this board, their metrics are great but what stops me from taking a larger position is that I’m not sure if their data and the methods to obtain that data can stay relevant and accurate as time goes by with constantly changing organization structures, employment histories and new ways to mine and harvest such data coming to the market. Any drop in accuracy of ZoomInfo’s data will make them one of many such services available in the market from the one that is most sought after for companies that is looking to identify and target high-value sales targets.

Pinterest PINS

Their near time challenges are slower MAU growth and tough second half COVID comps. As a user, I still don’t see how they can command Facebook like ARPUs where users tend to spend on their platform. However, I like Pinterest operating metrics, leadership focus and optionality in their space and will watch their execution in the coming quarters.

CrowdStrike CRWD

This would be their first full quarter ER to see if there is any additional boost to their near-term topline numbers from the SolarWinds episode last December. Very solid company with cloud native cyber security solutions that makes timely accretive acquisitions to further expand their market and an ambitious sounding CEO.

Sea Ltd CRWD

A major player in Southeast Asia with a very profitable Gaming business that funds E-Commerce and FinTech businesses. In their earlier years, their gaming business was primarily of that a publisher but in the recent years their bottom line was more reliant on their inhouse developed game called Free Fire. This transition I believe is a one-way journey and they may never be seen as a publisher again and would have to find constantly turn out hit games to keep up their gaming revenues. However, for the time being, Free Fire’s resilience is impressive with both active and paying users maintaining their steady growth. Their E-Commerce business also seem to be doing great with 250% YoY growth and demonstrating operating leverage with adj EBITDA margin improving from -99% last year Q1 to -45% this Q. Their FinTech business is still nascent and will probably continue to post losses the next few years as they figure things out and start leveraging their banking license.


Very strong quarter with Gross Margin at 57% and YoY Rev growth at 79%. They also guided for 74% revenue growth next quarter helped with a weak comp from last year Q2. Their platform revenue which forms the thesis for most folks is 82% of total revenue this quarter. They already said that the Gross Margins will take a hit in the coming quarters as timing some of high margin platform services helped this quarter. But it would be interesting to watch how their metrics go from here. As a user, I recently bought a Roku TV which to my surprise still hasn’t changed much from about 10 years ago when I last used them. However, given they are using Roku hardware to only get distribution, it makes sense to me that their hardware doesn’t have all the bells and whistles. And I have never bought a TV with Roku OS in it as well. However, they have $53.6m active accounts which means to me that they are perfectly situated to capitalize on the cord cutting tailwinds as more and more TV shifts to OTT, just like how I ended up having to buy Roku TV even with two smart TVs, three chromecasts, one AppleTV at home.

Twilio TWLO

Once their management realized they are hitting a cap on their core-communications product penetration, they cleverly extended into adjacent email and customer data domains through acquisitions. So, there is some execution risk, looming margin compression as they have to spend on engineering and packaging their product offerings in a way that makes sense to their customers along with the margin burden from Verizon, ATT etc pass-through fees. But they have a very credible CEO and a track record of posting market happy revenue growth numbers. Rebound in Industrial sector may help with their topline in the coming quarters. However, I’m a bit a surprised that at their scale and developer reach with their communications products they have never been significantly FCF positive.

Fiverr FVRR

A two-sided marketplace for gig workers with lots of potential for disruption in human capital industry, especially in niche markets like graphic designing, web development etc. Projecting for ~60% rev growth in 2021, 80%+ gross margin, -1% adj. EBITDA positive, steady growth in Avg Spend/Buyer. So not much to find fault in their numbers but am interested in their Fiverr Business product which should give them recurring revenue aspect to their business if successful.

Farfetch FTCH

A luxury E-Commerce provider with significant operations in Europe and China. They are projecting for profitability in 2021 with 46% revenue growth this quarter and 46% gross margins. They appear to be executing quite well and management sounds confident, they should continue to perform if luxury E-Commerce shows resilience post covid. They got beaten bad occasionally during the recent sell off so really tested my conviction, but I stayed with it so far as I also believe that they will benefit from their partnership with Alibaba in China.

Mercado Libre MELI

E-Commerce player in Latin America that is also developing their own Logistics and Financial Service offerings to take advantage of their E-Commerce scale and reach. They posted 111% YoY rev growth in Q1 2021 but that’s benefitted from a weak comp from last year. Another company that is running into tougher comps later this year but will rely on their sequential GMV growth, Items Sold, TPV metrics as I believe they are a market leader in E-Commerce in the countries they operate in with world class leadership team.

Curiosity Stream CURI

Another company that got sold off bad and tested my conviction. Even at their small scale of only $43M LTM revenue, they are having to include recently acquired One Day university revenues to re-iterate their original guide of 71% 2021 revenues. Operating leverage also not showing any promise. Now that I think about them, with such crowded competition in streaming companies I’m now not sure if they have anything unique that customers are looking for. Their fact and education-based content probably will have better distribution with the likes of Netflix and Roku. I plan to exit position in the coming days.

Lightspeed LSPD

A Point of Sale, Payment services provider for Retail, Restaurant and Golf industries. Their primary target market is businesses that have special, industry specific needs that cannot served by cookie-cutter offerings from Square or Shopify. Especially their retail and restaurant industry customers should give them a good growth as the world reopens fully post Covid.

Matterport GHVI

Matterport’s all-in-one 3D data platform enables anyone to turn a physical space into an immersive digital twin and share it with others to connect and collaborate in 3D.
Unlike Curiosity Stream, I understand how their product provides value to their customers and they probably have a first mover advantage in their space. Their merger is now due in early Q3 so I may have invested in them too early. They posted 108% YoY rev growth in Q1 21 with Subscription revenue growing at 87% YoY. Subscription Revenue is 51% of their total revenue.


All round great Q1 numbers from this wannabe FinTech super app that just completed its SPAC merger and switching ticker to SOFI. Their lending products revenues as a percentage of total revenues has been coming down but still is at 78%. So, need their higher margin non-lending products that includes Galileo a tech platform and other Financial services offerings like insurance, investing to grow even faster. Along with Upstart, I like their growth potential as compared to other larger FinTech players like Square, Pay Pal.

Sold Positions

Peloton PTON

I should have got out sooner, but I suspect they will find it hard to sustain their growth rate once the world opens even with their exciting product roadmap as people may prefer going to gyms to re-invigorate their social routines. I like the product, company and leadership but can’t find a spot in my portfolio anymore. I think their troubles with accidents will be resolved in due course of time.

Skillz SKLZ

The short reports on this company really challenged my thesis about them and I finally got convinced of the points raised. Flat MAUs while arguing paying MAUs is what matters while they are still at growing stages wasn’t very convincing. If they couldn’t find a way to hit out of the park with their metrics during lockdowns and stay at home orders, I wonder if they can execute any better when the world is on the move.

Still feel bullish for this company as I feel the product selection, shopping experience has gotten much better and with the increased awareness for all online shopping that is not satisfied with Amazon, Wayfair, Shopify driven businesses. However hard to find a spot with 25% guided growth.

Voyager Digital VYGVF

They are a want to be Robinhood for Crypto with zero commissions and offer above par interest rates on crypto deposits. As a user, their App goes down for maintenance quite a lot which is concerning but their growth numbers so far this year has been phenomenal, and I think they are still early and will do well as long as Crypto continues to do well. Only exited because I was trying to re-allocate into more beaten holdings.

Lastly, thank you Saul for the existence of this board and for the contributors for the quality insights and experiences they so generously share.

April Summary -…
March Summary -…