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Hello, this is Philip Has from Investor Search, and in this video I want to introduce a very interesting concept and stock that is still very, very unknown, but combines two things that I also stand for, which is why I find it very interesting. Valuation is, of course, another matter. I originally come from the value investing school, have read everything about Berksshire Hathaway, all the annual reports and books, but I myself have mainly focused on internet companies in recent years because there are simply very, very good business models in this area that are often very, very scalable.
However, I'm not someone who jumps on every hype train and am always a bit critical, and some of these companies were also very, very expensive. And there is a company, or perhaps a second one similar to the platform group in Germany, that combines these things. Yes, that 's tiny.com. It's a mini-Burgsher, at least that's how they market themselves, but with a focus on internet business models, and it's run by a very, very young founder who really did become a billionaire briefly, especially by developing designs for Shopify customers, such as themes, but also...
Andy Wilkinson built up a very, very successful agency, which was very profitable. He founded other companies, but none of it worked out perfectly, especially with his schedule. Now, he mainly uses Tiny to buy other companies, but lets them continue to operate decentrally. He's also quite active on social media, similar to me, and markets himself there a bit.
He's definitely a bit American and markets himself quite well. But even though the stock has dropped significantly, you have to give him some credit. If you can build something from scratch that's currently worth 400 million Canadian dollars, which is about 300 million US dollars, that's quite an achievement, and it was once worth considerably more.
So, what's the idea behind it? You simply buy companies that are relatively cheap, and there are quite a few of those in the internet sector. Some companies are incredibly successful on the stock market, but then there are also second- tier companies that aren't necessarily profitable enough to go public, and eventually, they're not even that interesting to investors.
The reason is, they do n't have the money. Are they looking to buy out their companies, or are they more likely tech founders who aren't so focused on the business side and might say, "Okay, I want to exit and do something else in life?" And there are n't that many buyers for that, because private equity firms are n't that familiar with this area or are too small.
That's where tiny investors come in, so to speak, who can then buy companies that can improve their products, sometimes from a market perspective. They have a bit of a mixed bag here, for example, Dribbble, a network for designers, where the founder also comes from. I think that's also weighed on the share price because there's new competition from AI in all these areas, since you can now develop things more cheaply yourself using AI.
But they also have things like Letterboxes, a network for film lovers, which I've used myself quite well. They're continuing to acquire B2B marketplaces, but also things like the AeroPress coffee machine, because it was probably cheap at one time and is a core business. But it's still this relatively profitable agency, which is n't super attractive in terms of its business model, but it's still a...
They generate decent cash flow, and Andres is complemented by a CFO who is supposed to be very cost-efficient. What differentiates them is simply that they don't want to sell the companies; decisions are made very quickly, and the founders can stay on if they want, similar to Berkshire Hathaway. That's a bit of a difference.
And I think it's also partly due to marketing; there's definitely a place for them. We're seeing significant growth recently. However, they've had some problems recently because of AI and because they're somewhat recession-prone. Yes, with agency business and smaller companies, dribbling is the most important thing.
Recently, though, they've made some very good acquisitions, and they've invested heavily in software and themes. This digital service agency is called Metalab, and they also have a VC fund, which I would say offers a decent profit share if things go well. That kind of covers the debt. There were also some big investors involved, like Billman, Anismore, and the Dando Fund from Monis Pai.
So, it's been a bit of a favorite among US value investors. who can also invest a bit in tech, and what's also interesting is that they develop apps, for example, with the author of Automatic Habits, which is very successful. They have an app called Atoms that was even in the top 10 of the download charts, also very, very successful, and I think they have 40%.
Another new thing is that they collaborate with influencers to develop products, which I think is also future-proof. Nevertheless, based solely on the financial figures, it's not cheap and not that attractive at first glance. But I believe that in 2025 they will be making similar profits to those in 2023.
Then we might reach a profit of around 12 Canadian dollars or Canadian dollar cents, at which point the stock would be attractively valued. But to be clear, I am indirectly invested here to a minimal extent, which could lead to conflicts of interest. This is not investment advice or a recommendation, and it would only be something for a minimal addition to a portfolio.
Anyone who finds this interesting should call the CEO. I've watched many of his videos and found him quite interesting; there are n't many like him in this mix of internet and... Value because often the people who can grow aren't so good at restructuring, and I think this one is quite well positioned in that regard, and I have a certain amount of respect for it.
As I said, the absolute market capitalization is also quite interesting and has been significantly higher in the past. I don't think the recent acquisitions are bad either. They're always buying into a bit of a mixed bag of online stocks. If that comes back into fashion, I think it could develop well.
But in principle, it's a small, more speculative stock that's heavily dependent on the founder, and at first glance, it doesn't look particularly good or cheap. Therefore, it's a typical mini- observation position. Does anyone know this stock? Has anyone heard of it? Otherwise, feel free to comment. Thanks so much for watching! Until next time!
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