We're hosting a deep dive Black Book to review our thesis on our favorite small/micro cap idea, The RealReal (REAL), on Thursday 9/28 at 2pm ET. The stock is currently trading at $2, and we think that there's upside to $10 over a TAIL duration. This was one of the most poorly run companies in retail under former management, but one thing the (now defunct) CEO did right was build a world class authentication infrastructure that we think would take over $1bn to replicate. Stocks don't trade on replacement value, but they do trade on accelerating rates of change in top line growth and profitability, and we think the new high-caliber CEO has a lot in his back pocket to repair the balance sheet and get this company to cash flow positive by 2024. In our deck, we're going to go through the state of the second hand/resale market for luxury goods, the competitive landscape, and REAL's positioning. We'll also dive into our own analysis of the shift we expect to see towards higher price and higher profitability items on the site, the opportunity to develop an advertising model with luxury brands, and the potential to strike deals with high-end third party retailers (like Neiman, Saks and Bloomingdales) to be the re-seller of those retailers excess luxury inventory. On top of a deal the company is likely to due to free up its debt burden and repair its balance sheet, we think the profitability and leverage here will look dramatically different over 12-18 months. Any stock trading near a 'bone' (or a buck) carries its own risk risk parameters -- so this name isnt for everybody. But we think that the average Small Cap PM out there will be looking at this name after it triples from here -- and they'll probably be right to do so. We'll vet and present the opportunities and risks on Thursday.
Call Details
Date/Time: Thursday September 28th at 2pm ET Add To Calendar: CLICK HERE
Live Video Link: CLICK HERE
