Gerar’s Business and Strategy Newsletter

Portfolio Update: Added to Herbalife - Strong Q3 Results- Understanding the Reasons for Potential Rerating

Gerar Ali Nawab — Tue, 03 Nov 2026 21:55:53 GMT

(Performance not included here for this article, will be included in the follow-on)

Herbalife has been boosted to the largest non-index holding, as I bought more for the Newsletter Model Portfolio today at 14.38$.

Herbalife Q3 Results:

Third Quarter 2026

“Net sales of $1.35 billion, up 6.0% vs. Q3’25, underscores the progress of the Company’s transformation
- Up 7.6% year-over-year on constant currency basis²
- North America net sales up 1.7%, its second consecutive quarter of year-over-year growth
Net income attributable to Herbalife of $58.8 million and margin of 4.4%; adjusted net income¹ of $68.5 million; adjusted net income¹ margin of 5.1%
Adjusted EBITDA¹ of $182.4 million; adjusted EBITDA¹ margin of 13.5%, up 70 basis points year-over-year
- Adjusted EBITDA¹ at constant currency² of $193.7 million exceeds guidance
- Credit Agreement EBITDA¹ of $198.9 million " —- Q3 Herbalife Press Release

Herbalife trades at 4-5x forward earnings, with several quarters of consecutive topline growth. What made this Q3 call particularly interesting was the sharpening of strategic focus on the nutrition club model.

I believe that Herbalife’s challenged valuation hinges on two factors, one of which is the impact of GLP1’s on the weight loss industry, and the other is the stigma around the multi-level marketing industry.

Herbalife has been a stand-out performer within both groups. Unlike other weight loss solutions, like Medifast or Weight Watchers, Herbalife includes, but has not built a brand identity around weightloss, but rather as a daily nutrition provider focused on holistic wellness, and now with the acquisition of Bioniq, personalized supplementation.

This orientation positions Herbalife well to handle new GLP1 dynamics within the weight management category, where others continue to face challenges.

The perception of the MLM industry is the 2nd reason that Herbalife’s valuation remains depressed, in my view. This perception of the MLM industry as a whole is valid, because Herbalife’s competitors are almost universally struggling, from Amway, to Nuskin.

The MLM industry has a reputation for stuffing green, naive people into rooms, giving them an exciting presentation, and having them enter a business opportunity that turns out to be mostly about recruitment. Products are often sub-par, and consumer branding non-existent.

Herbalife, with its robust roster of sports brand ambassadors, including Cristiano Ronaldo, has created a highly visible health and wellness brand, with products that are consumed by real customers, with real demand.

This is exemplified by the nutrition club model, which resembles a hybrid between a fitness club and a cafe, often featuring a menu that includes food and Herbalife based beverages.

Below is a menu sample and selection of reviews from a local Herbalife distributor operating the nutrition club model in my area, to give a gernal sense of this business model.

On the call, Herbalife’s interim CEO John DeSimone outlined a strategy placing increased emphasis on the nutrition club model, including nutrition club specific products, training, technology tools, and an internal org focused exclusively on nutrition clubs and club success.

Importantly, management revealed that productivity and foot traffic in the American nutrition club business was up significantly, with a 10% year over year increase in club productivity, driven by a 7% increase in foot traffic.

Management is understandably doubling down on this model. Over time, I believe that the investor community will come to view Herbalife less as an MLM company, and more like an accessible, low-cost, franchise opportunity, undergirded by quality products, a strong brand, accessible business development tools + training and real consumption.

At the current valuation, even with shares up as high as 10% intraday, I believe that Herbalife is extremely undervalued at 4-5x forward earnings (based on analyst consensus), with strong nutrition club metrics and a compelling strategy.

Finally, it’s worth mentioning the second tailwind; VAT tax reductions regarding Herbalife’s products in India have continued to drive Herbalife’s India business, making pricing affordable for new swaths of consumers, and fueling double digit volume growth in a market that has consistently grown over multiple decades. The strength of this market has been impactful in driving revenue growth well over the midpoint of Herbalife’s guidance, and I see no reason why Herbalife’s strength in India can’t continue into 2027 given the size of the market opportunity.

Disclaimer:
The information provided in this newsletter is for informational and educational purposes only and does not constitute financial, investment, legal, or tax advice. Nothing in this newsletter should be construed as a recommendation to buy, sell, or hold any security, or as an offer or solicitation of an offer to buy or sell any security.
I am not a registered investment advisor, broker-dealer, or financial planner. The content reflects personal opinions and analysis and should not be relied upon as the sole basis for any investment decision. Always conduct your own research and consult with a licensed financial advisor before making investment decisions.
Investing involves risk, including the potential loss of principal. Past performance is not indicative of future results. Any stocks, sectors, or strategies mentioned are for illustrative purposes and may not be suitable for all investors.
At the time of publication, I may hold positions in the securities discussed in this newsletter. These positions are subject to change at any time without notice, and I may buy or sell these securities without notice.

MGM Reports, People Deal Off the Table & Added to Meta Position

Gerar Ali Nawab — Fri, 30 Oct 2026 00:36:54 GMT

MGM reported a rough quarter, with consolidated revenue falling 1% year over year, due to lower rates in their Vegas Strip properties.

This was partially offset by growth in MGM Digital, and MGM China, the latter reached record market share and quarterly revenue.

Las Vegas Strip Resorts

Revenue of $2.0 billion in the current quarter, a decrease of 2% compared to the prior year quarter
Segment Adjusted EBITDAR of $531 million in the current quarter compared to $601 million in the prior year quarter, a decrease of 12%

Quarterly Consolidated Adjusted EBITDA

$402,790 vs $505,804 in 2025. (In thousands)

The outsized effect of topline contraction on EBTIDA is a result of reverse operating leverage. As revenue contracts, expenses due to inflationary pressure have continued to edge upward.

Las Vegas Strip & General Commentary

The Vegas Strip continues to be affected by dynamics that are outside of management control. Tariffs, the Iran war, and the Russia-Ukraine war continue to drive inflation, especially around energy.

Jet fuel prices reached record highs and airfares into Vegas rose 45% year over year for the quarter. Consumers are facing a difficult budgeting environment, understandably making Vegas an iconic yet richly priced vacation destination for many.

What strikes me is the number of stacked external factors contributing to declines in traffic and pricing in Vegas, which includes the closure of Spirit Airlines, resulting in a significant reduction in flights.

Las Vegas backfilled more than 50% of Spirit’s former capacity with other airlines, however at airfares that are significantly higher. This layers on top of geopolitical tensions with Canada, Vegas’s most significant source of international traffic.

Canadians Boycott Vegas

On the iGaming & Sports Betting front, prediction markets have upended what was an extremely fast-growing business line. The CFTC under the Trump administration has been very friendly to prediction markets, and increasingly it looks like a showdown will take place at the Supreme Court to decide conclusively the matter of whether prediction markets can legally offer sports betting contracts.

Finally, higher interest rates likely played a role in scuttling the MGM-People deal, and will impair the economics of any future buyout offers.

Rattling off the negative external factors weighing on MGM’s business & market valuation, it is striking that MGM continues to put in a resilient performance. Wars, high interest rates, inflation, and administrations come and go, while MGM continues to generate significant free cashflow and invest in long-term value drivers like MGM Osaka and MGM Digital, in addition to share buybacks.

Long-term, I believe this list of negative external factors will shrink and flip positive. In the meantime, I expect continued quarter to quarter volatility at MGM.

MGM Osaka & Sum Of Parts Valuation

MGM explicitly highlighted their valuation in the slide deck, which I’ve included because it does a great job of summarizing the sum of parts, which I have written about at length in prior articles.

Management also included a slide outlining the case for their MGM Osaka project, which is worth a review. Management believes MGM Osaka could be worth upwards of 4 billion USD, making it a substantial asset that is not reflected in the market capitalization.

https://filecache.investorroom.com/mr5ir_mgmresorts/1745/3Q-2026-Presentation-vFinal.post.pdf

Deal Chatter:

MGM CEO Bill Hornbuckle confirmed that deal talks with People Inc are off the table. I’m generally happy with this turn of events, as in my opinion, the best use of capital at both People Inc and MGM is buying back their own respective shares.

Newsletter Model Portfolio

Portfolio Update: I have further increased my position in Meta for a total average cost of ~636$ per share, making it the 2nd largest non-index holding at 7.5% of the portfolio. I intend to write more on Meta in the future.

People Inc is the largest non-index holding in the Newsletter Model Portfolio, which in turn is a major shareholder in MGM.

Disclaimer:

The information provided in this newsletter is for informational and educational purposes only and does not constitute financial, investment, legal, or tax advice. Nothing in this newsletter should be construed as a recommendation to buy, sell, or hold any security, or as an offer or solicitation of an offer to buy or sell any security.

I am not a registered investment advisor, broker-dealer, or financial planner. The content reflects personal opinions and analysis and should not be relied upon as the sole basis for any investment decision. Always conduct your own research and consult with a licensed financial advisor before making investment decisions.

Investing involves risk, including the potential loss of principal. Past performance is not indicative of future results. Any stocks, sectors, or strategies mentioned are for illustrative purposes and may not be suitable for all investors.

At the time of publication, I may hold positions in the securities discussed in this newsletter. These positions are subject to change at any time without notice, and I may buy or sell these securities without notice.

Model Portfolio Addition: Meta

Gerar Ali Nawab — Mon, 26 Oct 2026 17:14:39 GMT

Through the recent launch of Muse, Meta has taken an aggressive path towards deploying agents for mass consumption, leveraging their strong cashflow generation for investment in compute, and their existing social platforms as distribution.

Concerns remain about the effect of AI investment on free cashflow; however, the opportunity set for Meta’s compute investments is immense, ranging from training frontier models, to deploying consumer AI assistants, to strengthening the core advertising business. Meta’s combination of distribution, cashflow generation, and product innovation roadmap confer competitive advantage which in my opinion is compounded by their willingness to make large-scale compute investments.

Valuation:

Meta trades at a forward PE multiple of 19-22x with a track record of consistent double digit revenue growth. In short, it has an average multiple, with above average revenue and EPS growth relative to the S&P 500.

Newsletter Model Portfolio:

Price data as of 10/26/2026

Return= - 6.1% vs S&P 500 -0.98% since inception on August 12, 2026.

Nasdaq Index position swapped out for Meta at a price of 642.63.

Disclaimer:

Drive It Like You Stole It - Terence Reilly

Gerar Ali Nawab — Sat, 17 Oct 2026 18:51:21 GMT

Terence Reilly is the Chief Brand Officer for Crocs, and one of the most demonstrably effective marketing executives in recent history. It’s worth diving into his career and modeling the factors that have made him successful.

Crocs was a struggling brand in 2013, written off by Wall Street as a one-trick pony that had already performed its trick. Terence describes a meme that was going around: “See those holes? That’s where your dignity leaks out.”

He recounts framing this on his wall as a reminder of the sad state of the brand, but also that awareness was not the problem, but rather relevance.

This all began to change when an intern entered his office and pitched him on working with Post Malone, showing him a picture of the singer wearing Crocs. Terence ran with it immediately, becoming the first of many collaborations.

In an interview, Reilly describes how that first collaboration unlocked momentum that made it easier to get more. During a trip to China, Terence noticed the ubiquity of Kentucky Fried Chicken. He reached out to the CMO of KFC on LinkedIn and pitched the idea of a collaboration.

Crocs KFC

Collaborations became a go-to strategy for Crocs, and were crucial for turning the brand into a sensation with younger demographics.

What makes Terrence effective?

On the surface, it seems that Reilly is executing common sense tactics that any CMO should be doing, which on one level is true. But what seems to make him stand-out from his peers is the velocity and fearlessness with which he seizes marketing opportunities.

Notably, the Post Malone and KFC collaborations, while effective in hindsight, were not conventional choices; Post Malone was not quite as famous as he is today, and with tattoos all over his face, he could easily have been passed over by many overly wary corporate executives.

“He obsesses and is constantly prowling social media, he’ll send me stuff all weekend long.” — Crocs CEO Andrew Rees on Terrence Reilly - WSJ Article

In this interview with Ad Week - Reilly goes into more detail about his process, and characterizes his leadership style - How Crocs Turned 'Ugly' Into Cultural Cool

What really stands out is Reilly’s willingness, both for himself and his team, to quickly make bold moves, fail and iterate. “You should be having a blast” & “drive it like you stole it” are two excerpts of advice Reilly received from one of his first mentors in marketing, which he took to heart.

Reilly also notes that while many in his field lean heavily on data: I see a lot of folks they’re lost in the data,” Reilly said, “And the data is one thing, but man - this is all about feel. It's all about emotion."

For those interested in learning more about Reilly, he also orchestrated a major brand overhaul of Stanely Cup, turning a male focused thermos brand into a universally known phenomenon.

Disclaimer:

This is not investment advice.

BetMGM Reports - Portfolio & Commentary

Gerar Ali Nawab — Wed, 14 Oct 2026 16:31:54 GMT

Newsletter Model Portfolio:

Total Return Since Aug 12, 2026 (Inception) = -2.86% vs S&P +.7% - As of Yesterday, 10/13.

(Total Return calculated using end of day closing prices, whereas the table contains intraday data prior to close)

Lexin Fintech (LX) and Thryv (THRY) are the primary drivers of the gap versus the S&P 500, while Fulgent and Herbalife outperform.

Energy

Crude remains elevated in the high 90s, even as tankers are moving through the straight at pre war levels. The cost of shipping through the Gulf represents 30+ $ per barrel, relative to 2$ before the war. Uncertainty about the course of the war continues as reports indicate that Iran has used the lull in fighting to reconstitute their defense industrial base.

Meanwhile the Houthi-Saudi conflict continues to escalate, threatening refining and production capacity, along with shipping in the Red Sea.

Portfolio Company News

MGM

Focusing on MGM, shares are down substantially after the withdrawal of People Inc’s buyout offer at 48 per share. MGM is trading at 29.59 intraday, at time of writing. People Inc trades at a larger than usual premium to the market price of their MGM shares due to the combination of MGM shares trading near multi-year lows, and People having received a boost from buyout rumors.

People Inc seems ripe for a fall if a transaction does not materialize, which is concerning as a shareholder, but at the same time, immaterial to the long-term thesis at People Inc.

BetMGM

MGM’s flagship digital asset, BetMGM, released its Q3 results and management commentary this morning, posting decent results and maintaining full year guidance near the low end of the previously stated range.

Net Revenue of $710 million, up +7% YoY
- iGaming Net Revenue of $483 million (+6% YoY) and Online Sports Net Revenue of $216 million (+7% YoY)
- Adjusted EBITDA of $86 million, up +112% YoY
BetMGM reiterates its FY 2026 guidance and remains on track to deliver towards the lower end of Net Revenue (2.9-3.1 billion) and Adjusted EBITDA (300-350 million) guidance ranges

– (BetMGM Q3 Report)

BetMGM Q3 Call Commentary

BetMGM’s call revolved around a central theme of powerful competitive dynamics from both traditional and marketplace players. BetMGM remains focused on maximizing profitability, largely through marketing efficiency, including targeting premium players, multi-products states, and Nevada, where BetMGM benefits from in-person traffic to the Vegas Strip, and this has been a successful strategy in terms of generating cashflow while maintaining stable revenue.

Management was clear that marketing spend from prediction market competitors like Kalshi and Polymarket remains strong, driving up the cost of customer acquisition in most markets. My main takeaway from the quarter is that until prediction markets are addressed, BetMGM is in slow to no growth mode.

The viability of sports betting on prediction markets is going to be the most important factor impacting the value of BetMGM, far beyond any factors that are in management’s control. If the Supreme Court takes a relevant case and rules against the prediction markets, that would be a meaningful value unlock for BetMGM and MGM.

Should that happen, sports betting can once again become a major growth driver, allowing BetMGM to pull customers in with sports betting, and cross sell their iGaming ecosystem. I continue to believe that this is a likely outcome.

People Inc continues to represent a large portion of the Newsletter Model Portfolio, and with its value contingent on the value of its MGM stake, I expect volatility. See prior write-ups for the valuational thesis on People.

Disclaimer:

Revisiting DDI as Merger talks Progress

Gerar Ali Nawab — Mon, 12 Oct 2026 18:05:30 GMT

Revisiting old write-ups, Double Down Interactive remains in the middle of a buyout process. As I wrote in the prior article, the initial 11.25 USD price was extremely conservative relative to the cashflow generation, and substantial cash balance.

I believe that a 13-15 USD range would be a more reasonable offer which would reflect the value of DDI’s social casino and e-gaming businesses, while still offering attractive economic returns to a potential acquirer. I remain bullish on DDI, and believe that a reasonable chance remains for a larger buyout premium. — Double Down Interactive Buyout Offer

While merger talks are still ongoing, the market price of DDI shares has drifted upward, today at 13.67 USD intraday, at time of writing.

Given that the share price has hit my premium range, and that merger talks are always uncertain until a deal is closed, I am moving to neutral from bullish on DDI.

For clarity, going forward new individual stock write-ups will not use the bullish, neutral terminology. Instead, those interested can refer to the Newsletter Model Portfolio, which conveys the precise weights of each position I actually own, along with commentary on portfolio management, the markets, and more.

Individual stock write-ups will be of an objective nature, outlining stocks in my watchlist, my research notes, and an assement of the risks and rewards.

I believe this new format conveys the highest level of transparency.

Disclaimer: This article does not constitute investment advice, and is purely for educational purposes.

Kruti Patel Goyal: An Executive Profile

Gerar Ali Nawab — Thu, 08 Oct 2026 21:51:20 GMT

Monitoring the careers and stories of effective executives is one of the most fun parts of market research. For fellow business enthusiasts, here is an intro to Kruti Patel Goyal, the current CEO of Etsy.

There are many fascinating aspects of Kruti’s story. She rose to become the CEO of Etsy, starting out as a rank-and-file employee, in a corporate world where leadership and boards often look outside for an external “genius”, usually a man.

Many CEO’s are “business” experts, who abstract over the details of product and marketing. On her way up the ranks, Kruti held many roles, “learning Etsy inside and and out” as she puts it, culminating as Chief Product Officer.

Product is not a business function that is glorified in media or in popular awareness. In the tech industry, the product org is responsible for integrating feedback and data across customer success, marketing, and sales to push for concrete changes to the product which are aligned with user and company goals. CEO’s are usually pulled from the finance, sales, or engineering and to my knowledge it is very rare that a product person rises out of the product org into the highest executive roles.

Fatefully, Etsy had a struggling division, the Depop marketplace, which after experiencing very fast growth had slowed considerably. When the long-time CEO of Depop stepped down, Kruti was tapped to take over as CEO of the unit. This turned out to be a lucky break, allowing Kruti to take P&L responsibility for a major Etsy subsidiary.

Kruti made rapid work of Depop, slashing seller fees to boost the supply of sellers & inventory and remain competitive with other Gen-Z focused marketplaces. On the buyerside, discovery and search improvements made it easier for buyers to find what they are looking for, and as Kruti puts it: “We’ve made a ton of improvements to search over the last year — we’ve done research that shows buyers are 40-50% more likely to find what they’re looking for through search based on the improvements we’ve made. We’re also making recommendations a lot better”

Sales growth rose to 9% in 2023 and accelerated into 2024 and 2025, reaching 31.6% and 36.3% growth respectively. This was powered by almost 60% sales growth in the USA, a forray outside of Depop established UK market. Behind this growth, Kruti orchestrated an online & offline marketing campaign which included paid advertising, and in-person pop-up events.

After this incredible performance at Depop, Kruti was elevated to CEO of Etsy, as Josh Silverman stepped down. Since then, Etsy, which had been experiencing volume declines coming out of the Covid years, has experienced several quarters of buyer count stabilization, and Kruti seems off to a good start.

I look forward to following her career as CEO of Etsy.

Below is an interview with Kruti, delving into her early career, upbringing and philosophy of business.

Most Likely to Run a Business with Purpose: Kruti Patel Goyal, CEO of Depop

Disclaimer: I do not own Etsy, and this article is not investment advice.

Gerar’s Business & Strategy Newsletter: Medifast

Gerar Ali Nawab — Tue, 06 Oct 2026 22:23:28 GMT

Watchlist Addition: Medifast

Medifast has long been a player in the health and wellness space, providing meal replacement and nutrition products. GLP1s have created a difficult situation for the industry.

The health and wellness space has historically been powered by a marketing led hook around weight loss, which has been an aspiration for individuals that is simultaneously broadly desired, and challenging, making it the perfect pain point around which to acquire customers.

With the advent of GLP1s, this marketing hook has become much less effective, forcing the famed brand Weight Watchers into bankruptcy and hammering the growth of many other players.

Coaching Model & Weight Loss Focus

Medifast has been hit on two fronts: as an independent coaching led model, essentially a multi-level marketing structure, the company experienced a boom with Covid, as the major pause in the labor market created a booming demand for the gig-economy, and distributorship business opportunities.

When the labor market normalized, multi-level marketing companies experienced coach/distributor churn, unable to replace these large cohorts of Covid era independent distributors and suffering major revenue declines as a result.

In addition, for companies that had business models that were almost exclusively focused on weight loss results and relied on a very weight loss specific marketing hook, like Weight Watchers and Medifast, the advent of GLP-1s short circuited their marketing funnels, as consumers searching for weight loss solutions piled into GLP-1s as an easy “take a pill, get a result” option, rather than traditional coaching and lifestyle pathways.

How are GLP1 dynamics playing out?

The data coming in on GLP1 dynamics is proving to be mixed.

Users are taking GLP1s and cycling off them at a rate of 50-75% within the first year. Studies still need to be done breaking down the reasons behind this, but researchers speculate a mixture of cost, plateauing results, side-effects and an unwillingness to be dependent on GLP-1s over the long-term.

GLP-1s provide an easy first step in a wellness journey, but most sources conclude that they remain one piece of a wellness puzzle, which also includes protein for muscle preservation, exercise, supplementation, and coaching led habit formation.

Medifast - Balance Sheet & KPIs

Medifast has a pristine balance sheet, with no debt, and 169.8 million USD in cash, which exceeds the current market capitalization of ~130 million USD.

The market is pricing in uncertainty about the sustainability of the core business model, and ongoing cashburn. Management has guided a wide range of outcomes for the third quarter.

Q3 2026: Medifast guided for revenue of $60 million to $80 million and a loss per share of $0.15 to $0.65.

Cumulatively these are valid reasons for a discount to cash, however there are emerging positives in the Medifast story. Revenue over the last three quarters has stabilized after consistent declines. Coach productivity has been trending upward.

The company has reformulated its core product and shifted from weight loss to a focus on metabolic health and holistic wellness, under the Trilivy brand. This is a major, recent shift, and the next few quarters will be the first tests of its effectiveness.

The focus on metabolic health opens up a new conversation for Medifast coaches with their current and prospective clients, around fatigue, inflammation, and muscle preservation, in addition to weight loss.

The Pitch

Optimal Metabolic Health

Metabolic Synchronization^® — delivered through a comprehensive, coach-guided lifestyle system — is a breakthrough science that reverses metabolic dysfunction with a targeted reset^® of the body’s metabolism.* At the heart of our program is a network of dedicated coaches who guide individuals in achieving optimal health. Supported by scientifically designed plans, our personalized approach reverses metabolic dysfunction, and creates lifelong transformation.** — Medifast

Evaluating this new marketing, questions do remain for me around specific hooks. Metabolic health is a great conversation opener, however depending on the specific target customer, the conversation would need to be tailored around a need the customer understands and desires.

My Take Aways: Medifast Joins My Watchlist

If Medifast is able to pivot back to profitability over the next several quarters, then the valuation is extremely compelling. At its current market capitalization below cash, I’m considering a starter position.

Fundamentally, I believe that coaching led models can still be effective with the right product and marketing. In the case of Medifast, given the wide range of guidance from management for Q3, and the major marketing shift to metabolic health under the Trilivy brand, my preference would be to get a quarter of positive metrics to indicate that the new branding is effective, before taking a meaningful bet.

Disclaimer:

Joe Walsh: From Yellow Pages to SaaS — Leading Through Disruption (A Podcast Recommendation)

Gerar Ali Nawab — Fri, 02 Oct 2026 18:44:16 GMT

The joy of market research is the opportunity to learn about, and from, very interesting people. Joe Walsh is the CEO of Thryv, a pure play SMB software company that started out as, of all things, a Yellow Pages business.

Software is facing unprecedented disruption with the advent of agentic AI, and Joe is once again at the helm of a company that is right in the middle of the action. In this podcast, Joe talks about the early days of his career, competing with an established directory/yellow pages incumbent, and taking advantage of their complacency to provide a superior service for small businesses.

Later as Chairman of Cambium, a leading curriculum publisher, he led the company through a major transition from print educational material to digital subscriptions, responding to a major digital shift in public education.

Finally, Joe tells the current chapter of his tale, coming back to his roots within the yellow pages industry, and converting a major legacy print company into a software as a service provider.

I found the whole interview very interesting, but for those who like to get straight to applicable takeaways and useful principles, I think Joe shares some great wisdom at minute 37:37. Link to the Apple podcast interview below.

How to Beat a Monopoly and Outsmart AI | CEO, Thryv Joe Walsh

Disclaimer: I own shares in Thryv, via the Newsletter Model Portfolio, representing a roughly 4% allocation. This article is not a advocating the purchase or sale of any publicly traded security.

The MGM–People Inc Role Reversal

Gerar Ali Nawab — Sun, 27 Sep 2026 00:18:57 GMT

The MGM–People Inc Role Reversal

A conglomerate discount, a withdrawn $18 billion bid, and now word that MGM may make the offer run the other way.

Given the substantial conglomerate discount, by my estimation, at both People Inc and MGM, my preference would be for both companies to continue buying back their own shares at market prices.

But life is more interesting than that, and according to WSJ reporting MGM is considering a takeover bid for People Inc, which given their relative market capitalizations, does make more sense than the reverse.

In his remarks, People Inc Chair Barry Diller expressed openness to “alternative transactions,” without elaborating further. Shares of People Inc are up over 10% at the end of Friday trading.

Deal Logic

It’s unclear what sort of proposal MGM will make; there are various compelling scenarios. A takeover bid for People Inc in its entirety would functionally be an MGM share buyback, absorbing People Inc’s major stake in MGM. MGM has a long history of consistent buybacks, and this would rapidly accelerate that program. At attractive deal terms, this could be very value generative for MGM.

North Of $2B

Approximate value of People Inc’s ~27% stake in MGM — a position approaching the size of People Inc’s whole market cap, makes a full takeover function as a major MGM share buyback. Depending on the terms, this is a major positive for MGM shareholders.

Given that Barry Diller has a long and storied history at People Inc, formerly IAC, and retains substantial voting power, I am skeptical that an outright takeover bid for People Inc would pass the finish line, nor do I think this is a very interesting outcome for People Inc shareholders.

Publishing + MGM

I find it more likely that a strategic transaction could be reached for part or all of People Inc’s core publishing business. What would be the vision for such a transaction?

MGM and People Inc have over the years built out significant digital capability. Through its JV with Entain, MGM owns a significant stake in BetMGM, a meaningful player in sports betting and North American iGaming. Outside of BetMGM, MGM has significant exposure to international iGaming, with particular focus on Latin America. Stitching together this digital empire with MGM’s physical footprint is MGM Rewards, a program with millions of members across the world.

People Inc has managed through search engine traffic issues related to AI Overviews, successfully diversifying their content across channels, including Apps, YouTube, and Instagram, etc., while maintaining the relevancy of their iconic brands, like People, Food & Wine, Southern Living, InStyle, Travel & Leisure and Better Homes & Gardens.

The natural traffic through the Vegas Strip, and the millions of members in the MGM Rewards database can be leveraged to help drive customer acquisition for People’s new app experiences, social, and traditional media formats. Customer acquisition can also work in the reverse, with People’s advanced ad-tech, and multiple lifestyle publications helping cross-promote relevant experiences at MGM properties. This would have to be done tastefully, but with good execution I do believe there is meaningful synergy in a merger. The key to great execution would involve collaboration between teams at People and MGM to create culturally relevant events and experiences that are an organic fit for their respective audiences, driving awareness for their respective offerings in a customer-centered way.

MGM’s Vegas Strip experience transcends gambling — take, for example, one of MGM’s recent press releases describing an excellent instance of the kind of events, personalities, and lifestyle experiences that MGM specializes in, and which are a natural topic of coverage for People’s lifestyle brands.

MGM Resorts Announces Blockbuster Roster of Culinary Icons and Beverage Visionaries at Bellagio Fountain Club for Formula 1 Heineken Las Vegas Grand Prix 2026

Conclusion

As a shareholder of People Inc, I do believe that recent deal talk is generally good news, especially if it results in selling People’s media properties, which would generate substantial cash, and allow People flexibility to do my favorite thing, buy back their own shares.

Disclaimer:

I am a shareholder in People Inc via the Newsletter Model Portfolio.

MGM - People Inc - Deal Off The Table

Gerar Ali Nawab — Thu, 24 Sep 2026 00:21:18 GMT

A brief note on the MGM buyout offer from People Inc, at 48$ per share; the two sides have failed to reach an agreement, and MGM’s board intends to continue to oversee MGM as an independent company.

Barry Diller of People Inc expressed continued belief in the quality and valuational opportunity represented by MGM, also stating: “People Incorporated is doing just fine with its principal publishing business achieving its 11^th quarter of growth with plenty of cash to both invest in its business and purchase its stock.”

“We at People Incorporated remain open to and interested in the possibility of a strategic transaction with MGM Resorts and look forward to considering a range of alternatives,” — Barry Diller Chair of People Inc

Generally, I believe this is good news, as People Inc has a large capital base which it can put to work buying back People Inc stock, or increasing the size of the MGM position at depressed public market prices.

Disclaimer: This is an overview of market news, and commentary. This is not investment advice.

Another Week in The Markets

Gerar Ali Nawab — Wed, 23 Sep 2026 22:22:44 GMT

Newsletter Model Portfolio

Prices are as of 9/23.

Total Return Since Inception August 12th 2026: -3.64%.

Markets Today:

Today the bond market, across corporate credit, mortgage, and government finance, registered higher yields, indicating that the market considers inflation expectations to be sticky, requiring Fed action over a prolonged period of time.

As equities and bonds compete in the same market for returns, this has the potential to throw a wet towel over the stock market, in addition to weakening the strength of the consumer, and effecting earnings results across the board.

For me, laser focus is on individual companies, and especially opportunities for market turmoil to layer on an additional discount over shares that have already been beaten down for industry or company specific reasons.

Portfolio Review:

S&P 500 ETFs make up just under a 60% weighting, with an additional 5.5 % exposure to the Nasdaq 100. These will track the market, and most likely exhibit less volatility than the remainder of the portfolio, which is small cap, with one mid-cap exception in the form of People Inc.

My expectation is to use these ETFs as a source of funds to take advantage of volatility in the small caps, both in the portfolio and in my watchlist.

People Inc: Trades at a meaningful discount to the combined cash and MGM shares on the balance sheet, without taking into account long-term undervaluation at MGM, small equity stakes in other businesses, and a substantial media conglomerate in the form of People.

Even so, a slowing economy and inflation can affect the market’s sentiment regarding MGM and People.

Fulgent Genetics: Trading near cash value.

The two below are both very similar plays, and the highest upside scenarios involve a return to healthy top-line growth, although I don’t believe that is strictly necessary for upside from here. This requires top of funnel customer acquisition adjustments, which I believe are doable. Both are good M&A targets.

Gaia: Almost 100 million USD in high gross margin streaming platform revenue, trading at a roughly ~30 million USD market capitalization, with very light debt. Fair customer retention trends.

Thryv: a recent division sale and restructuring has meaningfully improved the balance sheet, and the company trades at a small fraction of high gross margin revenue. Good customer retention trends in the multi-product user, and >400 USD per month customer cohorts.

Herbalife: Trades at 5x free cashflow, with particular strength in India. The company continues to deleverage, and has instituted a meaningful buyback program.

High Templar Tech: A pile of Chinese cash trading at a discount, with a consistent buyback regime.

Lexin Fintech: A Chinese consumer lending platform with substantial equity per share far in excess of the current price, but facing a likely net loss in the current quarter due to credit risk and reduced loan volume. Regulation changes by the CCP are going to cause substantial business distruption, although due to the liquid nature of their financial assets, I believe Lexin has the ability to navigate the changes, and even exit their current business line with substantial asset value intact, much like what High Templar Tech accomplished when they exited the consumer lending business.

Over time management has demonstrated very good shareholder alignment with consistent dividends and buybacks.

The Watchlist: More Here in Future Articles

Current View:

I’m not in any particular hurry to make substantial changes to the portfolio, given the current market environment, although this can change abruptly.

The paradox of value stocks is that the same factors that create despressed share prices make them more vulnerable than the average to market turmoil and violent price declines.

Disclaimer:

Watchlist: Prosus - PROSY

Gerar Ali Nawab — Thu, 17 Sep 2026 20:48:01 GMT

(This article is based on 9/16 market data)

The Accounting Story

Prosus is a company that I will be following closely, and due to its complicated structure, it can be hard for the layperson to assess. It has attributes that make it very similar to a holding within the Newsletter Model Portfolio, People Inc.

Prosus can be best thought of as a shell that holds ~23% of Tencent, one of China’s tech giants. The mark to market value of this stake 113 billion USD as of September 16. When ~7 billion USD in net-debt is deducted, we get roughly 106 billion USD.

Prosus’ market capitalization is 74.47 billion EUR, or roughly 85.4 billion USD.

So Prosus trades at a substantial discount to their stake in Tencent alone. In addition to this stake, the company has a large collection of private investments around the world valued at 32 billion USD, (by Prosus’ own estimates), and another ~7.3 billion USD in publicly traded investments (non-Tencent).

We will peg this combined non-Tencent value at 39.3 billion USD, for a total asset value of 106 +39.3 = 145.3 billion USD. At a market cap of 85. 4 billion, shares trade at a 41.2% discount to Net Asset Value.

Two further details complete this picture. This first is that Dutch tax law allows Prosus to sell shares from their Tencent stake without paying corporate taxes on the capital gains. Prosus has taken advantage of this, and the discount to NAV, to sell shares in Tencent, and buyback Prosus stock. Management has communicated that they intend to continue this strategy.

The Open Questions

One point that sticks out is the valuation of the private investments and subsidiaries, on the books at ~32 billion. Internal estimates should always be taken with a grain of salt, however there are some promising indicators that Prosus’s non-Tencent holdings could be on track to substantial upside.

Prosus e-commerce platforms ex-Tencent have been growing revenue consistently, and achieved meaningful EBITDA.

“I am proud to share that we hit the ambitious guidance of +$7.3 billion in revenue and +$1.1 billion in Ecommerce adjusted EBITDA (ex JET and La Centrale). All of our ecosystems are now profitable and our Free Cash Flow, excluding Tencent, continues to grow” - Fabricio Bloisi CEO Prosus

Prosus has built a stable of e-commerce brands that are dominant local players in the regions they serve, including iFood, Despagar, OLX, and Just Eat Takeaway. It is worth doing a deeper dive on these divisions, but the focus for this article is just to paint the broad strokes of a framework for evaluating Prosus.

The second open question is the large exposure to Tencent, which makes Prosus linked to both Tencent’s performance/valuation, and geopolitical risk. Tecent’s forward PE based on various estimates ranges from 12-14x, which makes it a reasonable valuation in my view, especially with their consistent track record of driving revenue and profitability.

Rather than diving deep into Tencent myself, I’ll link to a write-up from a Substack analyst who does great work: https://maxxwaring.substack.com/p/tencent-tcehy-the-worlds-largest

Conclusion:

I intend to follow Prosus closely, with special attention to strategy and performance at Tecent, and the Prosus e-commerce ecosystem. My hope is this article offered a framework for evaluating the sum of parts for a conglomerate like Prosus, and summarized the key subjective/non-accounting factors that weigh into a valuation.

Prosus is on my watchlist of Chinese exposure plays for potential addition into the Newsletter Model Portfolio.

Disclaimer:

Market Thoughts: Thryv - Watchlist - Commentary

Gerar Ali Nawab — Mon, 14 Sep 2026 18:39:33 GMT

Newsletter Model Portfolio: As of 9/14.

Total Unrealized Return from Inception = Total Return = -3.11%

Thryv:

Today Thryv announced that they are selling the print directory business for 142 million USD. This is a substantial cash infusion, and it highlights the scale of the company’s businesses relative to the current intraday market capitalization of roughly 88 million USD.

This shift in the balance sheet allows accelerated debt paydown, and in my opinion, also opens the door for the announcement of share buybacks. In reflection of the news, I boosted the Thryv stake to 5.2% of the portfolio today, at a per share price of 2.0085.

The Market

As we deal with continued escalation with Iran and roiling global oil markets, it’s worth taking a step back and considering that market volatility creates opportunity. In times of market volatility, focus always stays on factors of intrinsic value: financial strength, cashflow, and steady progress on value creation.

The Watchlist:

For those interested in the investment process, going forward I will be outlining my commentary on stocks that are in my watchlist, but not in the portfolio, in the interest of demonstrating how I think about prospective plays, portfolio management and timing.

Chegg: A stock that has been extremely volatile. In prior write-ups I’ve outlined the bullish case, which hinges on the fact that Chegg has maintained a healthy net-cash balance sheet, stripped away overhead to maximize cashflow from the struggling Chegg Study legacy business, and healthier revenue trends in the Skills unit, which includes the language learning app, Busuu.

Chegg had once again passed below 1$ per share, with a truly dismal quarter where management retracted revenue guidance for the skill business, opting for only combined revenue guidance going forward. This came with a strategy shift, building skills and interview prep directly into the Chegg study platform. This is a silent retreat from a prior strategy around growing Busuu aggressively in the corporate Skilling market, and it is a silent recognition that the acceleration in Skilling revenue did not materialize.

This is consistent with my rationale for going neutral from bullish, outlined here:

Chegg: A Strong Move Up - Moving to Neutral

Going forward, with the share price back below one, cash on the balance sheet is once again a substantial percent of the market capitalization. I’ll be monitoring closely, especially progress with their strategy of making Chegg Study into practical skills building and career prep platform. CEO Dan Rosensweig outlines this here:

“For years, students have come to Chegg to be successful in their studies. Now, Chegg will help them go from learning to earning,” said Dan Rosensweig, CEO and Executive Chairman of Chegg. “We’re bringing internship and career support, skills development, and learning together in one place. We’ll help students understand which opportunities are right for them, identify what skills they need to develop, build those skills, make the right connections, submit stronger applications, and ultimately succeed in getting the interviews that lead to jobs. Unlike traditional job marketplaces built primarily around employers, Chegg is designed around the student – removing the barriers between them and employment.”

This is certainly an interesting niche for Chegg to play in and aligns with the legacy homework help strategy to create an experience that serves students at multiple levels. On the flip side, with the continued rise of AI Overviews in search, Chegg will need to grow their business without the benefit of strong organic search traffic. They will also need to sufficiently differentiate their products from offerings by players like LinkedIn, and Coursera, which have already achieved scale and brand recognition.

Pinduoduo: I have written about Pinduoduo in a previous write-up. I am bullish based on valuational factors but have not established a long position. As a company that does not prioritize quarter to quarter results and is also facing geopolitical/regulatory scrutiny in the EU and U.S.A, market psychology can continue to dampen the shares for some time and chart technicals indicate weakness. I would prefer the shares 10-20% lower or see signs of near term-catalysts.

In the interests of keeping my China exposure within a certain range, I believe my portfolio has the capacity for one additional Chinese investment and will be selective about what qualifies.

In future articles I will go through other stocks in the watchlist, including companies like Prosus.

Disclaimer:

News Round-Up - Herbalife - Lexin Fintech

Gerar Ali Nawab — Tue, 01 Sep 2026 18:03:47 GMT

(Newsletter Model Portfolio - Market Prices as of August 31)

Total Return since August 12th (Inception)

−$13.13 (−2.88%)

Herbalife announced a change in CEO, which was accompanied by a reiteration of guidance. The current CFO, John Desimone, who was slated to leave the Company, will now be the interim CEO starting in November.

CEO Stephan Gratziani will return to his role as an independent distributor.

I am making no position changes based on these developments, however, I will be closely listening to Q3 results for more color on the reasons for the transition, and whether the general product strategy will remain in place.

Lexin Fintech reported results that were consistent with peers within the industry. Funding partners have curtailed their allocations towards consumer lending platform as a result of the collapse of a major lending platform, Juzi Digital Technology. This company misappropriated borrower repayments, failing to pass the cash along to the financial institutions and triggering erroneous credit reporting.

As a result, many Chinese financial institutions have placed their third-party lending programs on pause. Lexin eked out a profit in Q2 but management has communicated that Q3 is expected to be a net loss.

There is also concern that the pullback in the funding environment, which effects borrower’s ability to refinance, could cause an uptick in credit risk & delinquencies. My impression from management commentaries at Lexin and Finvolution is that the current environment could persist for some time and trigger a new round of regulation.

Lexin’s balance sheet remains strong, with plenty of liquidity, and management continues to focus on buy now pay later e-commerce, and fintech empowerment services to financial institutions, which cumulatively accounts for 45% of originations. This diversification strategy away from guarantee-based loan facilitation is a core part of Lexin’s ability to navigate uncertainty in the Chinese platform lending space.

My position remains unchanged. While I believe that asset value per share remains compelling, cashflow generation will likely be severely curtailed over the next few quarters, and the regulatory overhang will remain for the foreseeable future. Q3 and Q4 results should give clarity on the regulatory and funding environment heading into fiscal year 27.

Prediction Markets & MGM

A 9th Circuit Court of Appeals ruled against Kalshi, upholding the right of Nevada state gambling authorities to ban Kalshi sports contracts in their state. This sets a precedent for other states to follow suit, and is one more step towards a showdown in the Supreme Court.

Overall a positive development for MGM, a major shareholding of People Inc, and in particular BetMGM, MGM’s Sports betting and iGaming joint venture.

https://gamingamerica.com/news/1099966/9th-circuit-court-ruling-future-prediction-markets

MGM shares continue to fall from the 48$ buyout price, which implies that that market considers it increasingly unlikely that a deal will materialize. In my opinion, this would be a positive development for People Inc, which can resume buying shares at discounted market prices, rather than leveraging the balance sheet to buy at 48 USD.

Disclaimer:

The Newsletter Model Portfolio

Gerar Ali Nawab — Thu, 13 Aug 2026 16:02:06 GMT

Below are the positions and weights for the Newsletter Model, as of inception yesterday, August 12, intraday.

In addition, there is a 4% cash allocation. These are backed by real positions. I hold these stocks.

While I had meant to stick to writing about pure valuational and strategy assessment, I believe that elements of timing, risk management, and relative rank, are factors worth delving into, and best communicated through a portfolio.

In addition, a portfolio means objective accountability. The portfolio has a defined return profile. Its either working or it’s not relative to benchmarks.

Going forward, all articles, including the write-up format, will include updated portfolio weights, and average cost. Not every bullish rated stock will make it into the portfolio.

Some may be curious about the S&P 500 and Nasdaq 100 exposure. These indexes are notoriously hard to beat through active management. I believe that companies within the index are generally reasonably valued, and of a superior quality. Any deviation from an index, in my opinion, should be justified by a very disciplined framework, based on objective measures of accounting value, or immanent catalysts.

Disclaimer:

Herbalife Q2 Results - India Leads - The Supplement Era Begins

Gerar Ali Nawab — Sat, 08 Aug 2026 18:19:00 GMT

Shares are trading lower after what, to me was an excellent quarter.

Q2 2026 revenue hit the top of guidance with sales $1.3B, +5.4% YoY, and North America hit marginal growth, up slightly + 0.2%.

Revenue upside was driven by India and Latin America, with India leading.

India

In September 2025, the Indian government slashed the Goods and Services Tax (GST) rate on Herbalife’s nutrition products from 18% down to 5%, and this has allowed Herbalife’s offering to sit at an affordable price point for Indian consumers outside metropolitan areas.

Herbalife’s Chief Nutrition Officer stated in the Deccan Harold:

“We also see an increasing trend in tier 2 and tier 3 markets adapting to wellness post the pandemic, where there is a spike in demand for these products. Protein intake deficiency and the lack of micronutrients in the Indian diet are also highlighted as concerns.”

As someone who has family connections to Pakistan and India, I can attest to the huge gaps in nutritional access and awareness, spanning essentials like iodine, protein, and b-vitamins. Herbalife, beyond building a profitable, fast growing, business line on the subcontinent, is playing an important role in bringing nutritional science to the world.

I suspect that India will continue to grow as a percent of the global Herbalife business and have real positive impact on revenue performance.

Product Innovation

My favorite aspect of the Herbalife story is the company’s commitment to product innovation and holistic wellness. At the end of this quarter, Herbalife rolled out Bioniq Go in several markets, including North America.

“Bioniq GO Bioniq GO offers a more personalized approach to nutrition for health-conscious adults. Based on a customer’s select input from the Wellness Assessment, Bioniq GO recommends one of 40 customized formulas. Each formula contains up to 22 science backed nutrients to support a range of health benefits, including normal muscle function, heart health, and more.*” - Herbalife Q2 Earnings Slides.

Bioniq is the first personalized supplement product launch, marking the company’s entrance into the supplement space in a meaningful way. Alongside Bioniq, Herbalife is rolling out an expanded line of longevity, energy, and exogenous ketone products. Energy is a huge total addressable market, with daily consumption spanning coffee to 5-hour energy. The Life I/O Activate Energy product, which includes caffeine, b-vitamins, and exogenous ketones, is an innovative product for the category.

B-12 is included in the most bioavailable form, Methylcobalamin, as opposed to the synthetic Cyanocobalamin found in most grocery story supplement aisles. In addition, ketones are included for a non-carbohydrate form of energy.

Going forward, these product launches give Herbalife an opportunity to learn, and formulate the right go-to-market strategies at the distributor level, in order to expand meaningfully outside of the core meal replacement shake product category.

Valuation

Herbalife trades at roughly 5x cashflow, with consistent debt paydown, and strong revenue trends. Product expansion remains a source of optionality, not baked into current revenue projections. With continued execution, there is potential for re-rating, as the cashflow multiple remains low relative to the company’s history. I remain bullish on Herbalife.

For more on valuation, see prior articles.

Disclaimer:

Blend Labs - Boiling A Frog (Me)

Gerar Ali Nawab — Fri, 07 Aug 2026 17:51:38 GMT

Life teaches you many lessons, often with a little bit of pain.

After Blend’s Q2 results, I found myself wondering what to write. What set of facts lay before me?

Blend has a non-mortgage-consumer banking division, and for a time it was growing very fast, becoming a substantial fraction of total revenue. This was a value driver, as consumer banking could grow independently of home sales, refinance volume and interest rates.

Ultimately this business did not prove to be a durable grower. I watched the deceleration in consumer banking growth but gave Blend a pass. The market did too.

Blend began to face headwinds on its revenue per funded loan, blaming a large client renegotiation, along with the exit of loan product add-ons, like close and title. I gave Blend a pass.

On the political front, with Trump’s election and the institution of tariffs, we lost the clear pathway towards lower inflation and lower interest rates. As I write this, the most bullish scenario that I envision for Blend is a change in administration, and a massive reduction of inflation when the tariffs get unwound, and the war with Iran ends. I have no tools at my disposal to know when that will happen.

Blend’s CEO on each call gives optimistic commentary, and it never gets translated into meaningful new customer deals that move the needle. Revenue grows at low single digits.

But most importantly, Blend has never been a value play.

Even after falling to its current level, Blend’s revenue multiple is conventional in the software space, with a fairly small cash position. It is not hard to find publicly traded software companies that are growing MUCH faster, have large cash positions, and trade at lower revenue multiples, adjusted for cash position. Monday.com is one example.

What has been guiding my continued bullishness? A belief that the CEO, Nima Ghamsari, is a smart guy, and that A.I will transform banking. These are both true statements in my opinion. That is not enough.

I will be checking in for indicators of concrete progress, and value creation, but until I see that, relying purely on optimistic commentary from the CEO is not a true analysis.

Learnings:

Boiling the frog happens one degree at a time, and I find it fascinating how if one does not set very careful, defined standards of progress, if one lets management make one excuse, and then another, the water can end up boiling before you know it.

Indications that suggest business momentum is stalled for conventionally valued growth stocks, should not be taken lightly, especially in competitive, or innovative industries.

When the temperature of the water starts rising, its often because the stove is on. I should have reassessed the situation far earlier, erring on the side caution.

Going forward I will be focusing on definable value, which can be described in accounting terms, or in cases of more conventionally valued companies, those that I am capable of analyzing based on elements of stable, long-term franchise value, like brand, or economies of scale. Buffett describes this kind of company best, as one where the competitive position is so good that an idiot could run it.

When an industry is competitive, experiencing rapid innovation, and substantial growth is priced into a valuation, management must be held accountable on short term metrics. There are no excuses for a growth company. Growth is not easy. Everyone wants to compete in emerging, growing industries. The onus is on management to prove their right to win every quarter.

I am shifting to neutral on Blend, from bullish.

Disclaimer:

Gerar's Business & Strategy Newsletter

Gerar Ali Nawab — Wed, 05 Aug 2026 20:54:11 GMT

Thank you for reading! It’s a privilege and a joy to be able to do this research and share it.

If you are an active Substack user, restacking an article helps build awareness for the publication, and I greatly appreciate it. If you know someone, family, an acquaintance, who enjoys stocks, economics, or business, don’t forget to share it with them! If you have questions, feedback or requests, don’t hesitate to reach out. What could I do to make this publication more valuable to you? You, the reader, are priority number one.

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An Interesting Few Weeks in the World

China has succeeded in landing a rocket vertically, making it the 2nd nation capable of this feat.

A lull in the Iran War continues, as recent reporting from Reuters indicates that U.S exquisite weapons platforms are substantially depleted. We have reports that Oman and Iran are in the final stages of negotiation regarding administration of the Strait of Hormuz, and the Dow is up expectantly, as oil prices hover around 3-week lows.

Beyond news that an Open A.I agent escaped it’s sandbox and hacked various companies, we have new Guardian reporting about agents resorting to deception, including fake identities, in “sustained, potentially harmful activity directed at real people and organizations”. It took an hour to contain the incident.

As open-source models become more powerful, we are entering a perilous new world where we have democratized advanced hacking ability. There will likely be more incidents in the future, and cybersecurity is on the cusp of major evolution.

Earnings Season

Earnings season is in full swing, with Herbalife, Gaia, Blend Labs, DoubleDown Interactive and others are set to report over the next 2 weeks. I will be covering the action.

Fulgent, Thryv and People Inc have reported already. People Inc reported results consistent with guidance, and the price action in People’s main equity holding, MGM. Barry Diller expressed that he intended to boost People Inc’s stake in MGM, rapidly should his buyout offer be accepted, or slowly over time via the public markets. Shares are up after earnings. I remain bullish.

I have written about Thryv and Fulgent recently:

Fulgent Genetics

Thryv

Disclaimer:

Thryv Implosion: Down 40% Intra-Day

Gerar Ali Nawab — Tue, 04 Aug 2026 18:13:09 GMT

What Happened?

Thryv revised full-year guidance downward to $453–457 million, from a previous range of $463–471 million. I believe that the quarter reflects continued dynamics in the business related to attrition of subscale, former directory/marketing services clients, business center, and Keap CRM clients.

Thryv has been actively deemphasizing these areas to support their Market, Sell, Grow initiative, focused on marketing automation, targeting, lead scoring, and ecosystem partnerships.

The result is lumpy quarter-to-quarter results, as growing segments of the business are offset by churn in legacy and de-emphasized product categories.

The Big Picture

In contrast to the market reaction, this quarter made a very positive impression on me, on several fronts.

Firstly, the company announced a major restructuring, targeting +$50 million in annual run-rate savings beginning in 2027. This is in contrast to the current market capitalization at time of writing, of $113 million. It is a reminder that this is a very large software business, with high gross margins, and underlying cash flow generation.

Secondly, Thryv is launching its next-generation marketing platform, incorporating AI features and third-party integrations, which reflects their focus on marketing center. This product is meant to serve as the centerpiece of Thryv’s growth strategy. By focusing on this category, Thryv is not only doubling down on the fastest-growing part of their business, but also enabling a critical partnership growth strategy, where Thryv will partner with best-of-breed CRM, communications, payments, and web services providers. By seeking to complement, rather than compete across a broad range of services, Thryv can partner with other services providers to offer a full suite of solutions, and share the marketing and sales infrastructure.

More on this.

Thirdly, Thryv outlined a partnership model that, for the first time, clarifies how Thryv intends to drive growth in this next stage as a pure-play software company. Thryv began as a legacy directory, marketing services, and yellow pages business, and over time converted a substantial portion of this customer base into software customers.

This strategy drove consistent double-digit revenue growth in the software business, allowing the company to maintain a very low cost of customer acquisition by converting customers with whom they had pre-existing relationships. Thryv calls this strategy “hunting in the Zoo.” As the legacy business has now largely been tapped out, Thryv is in the final stages of becoming a pure-play software company.

New customer growth will be from “outside the Zoo,” and this comes with the challenges inherent to the small business software/services market, which is that small businesses have smaller budgets than enterprise, and therefore the cost of customer acquisition has to be managed tightly to obtain a good return on sales and marketing spend.

By partnering with companies like Wix, Jobber, Breezy, and Ooma, which spans internet phone, business analytics, CRM, payments, and web services, Thryv’s sales force can sell small businesses a full solution suite, but most importantly, the companies involved can also co-market Thryv products, creating a reciprocal relationship which unlocks each of their respective customer bases for cross-selling.

This model is as close as possible to the original “hunting in the zoo” paradigm which grew Thryv’s software business from zero into a +$450 million line, and paves the way for Thryv to inflect customer growth upward without having to incur large marketing expenses.

TL;DR

While Thryv’s share performance has been disappointing, I believe this reflects natural growing pains as they transition to a pure-play software company. By focusing development resources on the Market/Sell/Grow software stack, unlocking co-development and cross-selling opportunities with other players in the small business space, and restructuring to maximize cash flow generation, Thryv has outlined a very clear strategy for winning their market. All that is left to do is execute. I remain bullish on Thryv.

For more valuation commentary, see prior articles.

Disclaimer: