Weekly Recap | June - W1

Quiet Macro, Nebius Convertible Notes & CoreWeave Comparison, Hims Acquires Zava, Meta Goes Nuclear & Lululemon's Earnings.

Charts & Prices Update. Nebius, Sea Limited, Grab & Tesla.

Welcome | Everything You Need to Know.

Macro.

A quiet week macro-wise, for once, as Trump stayed silent - despite his public fight with Elon but I won’t comment on this as it brings no value. We also had some noise about the trade deal with China but nothing concrete, more talks should happen in London soon.

The only interesting real data we had concerns the labor market, which shows some more weakness. Jobless Claims & Nonfarm Payroll came in hot, indicating that more workers are struggling to find a job than consensus expected.

Nothing dramatic though, but my view of the economy doesn’t change.

Watched Stocks and Portfolio.

Nebius Convertible Notes.

Nebius announced this week a $1B funding round through convertible notes. This was to be expected. They will propose two tranches, convertible at $51 or more than 5% higher than Friday’s price.

- $500M of 2.00% notes due 2029.

- $500M of 3.00% notes due 2031.

Nebius needs funding to expand its operations, and management was crystal clear on the last earnings call that they would finance themselves soon, preferably through the market - which is what they are doing. They also talked about potentially selling their stakes in Toloka or Clickhouse but as their valuations continue to rise, it is better to hold them. Debt would be a potential tool as well.

Their cash should be melting as they accelerated their expansion but will conserve a very strong balance sheet with no debt after this new raising round. Convertible notes was the right choice.

The news is interesting by itself, but we will need to wait for the results to know if it is bullish or not. A strong demand for those notes would highlight confidence in Nebius' long-term success. The contrary would be disappointing. The market apparently made its choice as the stock rallied above $45, certainly due to the convertible price of those notes, which could set a new floor depending on the demand.

This is what we want to see & I am not the least surprised.

Nebius & CoreWeave.

We talked about CoreWeave already, but I would like to come back to it to highlight why I hold my option calls on Nebius & remain bullish. Keep in mind that I am not advising to buy Nebius at today’s price; this would be FOMO. We build positions before the moves.

That being said, Nebius should go higher after this new & based on how the market treats CoreWeave, its principal concurence.

Setting aside the differences between the companies and the fact that Nebius is likely the better one with a better management, a path to profitability, no debt, a healthy access to financing, no reliance on a single client & more... and focusing on their business, there is a clear difference in how the market treats both companies.

In my opinion, the best way to value these growth companies is with ARR multiples, as it best represents their business.

CoreWeave has $14.97B in RPOs (multi-year contracts), with $12B from OpenAI for the next 5 years and $3B from other clients with an average timeframe of 4 years, leading to my ARR estimation of $3B per year. They also mentioned a $26B backlog, which includes potential contracts not yet signed. The data could be better than what I’ve shared, but I chose to focus on what is, not what could be.

In contrast, Nebius plans to reach $1B in ARR for FY25 from multiple clients.

The table illustrates the difference in treatment for both, which, even if comparable in terms of F.P/S, do not compare in terms of F.ARR - which are nothing but F.P/S, and wouldn’t compare if we used the backlog value over the next 5 years.

Nebius is a strong hold in my opinion & price action seems to confirm it. I will be a buyer if we confirm the actual breakout.

Hims acquires ZAVA.

Hims & Hers will acquire Zava, a European telemedicine platform serving more than 1.3M users with more than 2M consultations in the U.K., France, Germany & Ireland. In a few words, both businesses are almost identical with the only difference being their geographies.

Hims' objective is to leverage ZAVA's European user base & licenses to expand its own operation & propose their personalized wellness service in the region.

"Wherever you live, the need is the same: healthcare that’s personal, trustworthy and fast. By joining forces with Hims & Hers, we can put that standard within reach of millions more people across Europe."

Expansion is a big subject & I personally did not expect Hims to try it that rapidly. I believed they would focus on growth in the U.S. as there is a lot left to do and the European market comes with lots of challenges as the perception of healthcare is diametrically different there.

We have no information on Zava’s exact financials - assumptions are around £20M of revenues FY23, the price of the transaction - we only know it will be full cash, or how this will work. My assumptions - and hope, would be that the company is integrated but that Hims’ teams only focus on transferring their workflow & branding without too much implication as the focus should remain on scaling the U.S. business.

It remains very bullish news as the long-term objective is to be a global brand. But again, Europe is a very different market with very different mentalities and lots of complexities. This could also be a mistake, trying to go too fast.

Let’s wait for more details.

Meta & Nuclear.

Meta committed to a 20-year contract with Constellation Energy to buy their nuclear energy; it is a pretty big deal for the industry & for my personal bull thesis on the sector.

Energy | Invesment Case

We do not have enough energy for our future needs and do not have many solutions to generate it. Fossil & nuclear will grow, big time.

Lululemon Earnings.

Some complex earnings which plunged the stock -20% for the leggings brand.

The takeaway is pretty straightforward: management brought back growth in the U.S., but there is a slowdown internationally this quarter - up 40% YoY in Q4-24. The trade-off isn’t necessarily a good thing.

Margins were impacted by currency mix globally, so I personally wouldn't worry much about them. And the cut in guidance is due to potential tariffs, so I would read it as a conservative approach from management more than real issues.

It isn't a bad quarter altogether, but it might fuel some fears that growth starts to slow down even outside of the U.S. while there already are fears about the U.S. consumers.

No position. Only observing.