Hi Anand,

MSTC annoys us no doubt. As I mentioned above, I myself had built a small position & sold, twice. Nothing’s changed but I have committed myself to this story as I think long term story is still beautiful. If you have found a better opportunity, no harm in moving out. I might do the same in the future. As of now, I think I am going to stay with MSTC at least for the next 5 years.
My rationale as of now (Because I have a history of not staying with MSTC):

1. I had cash & MSTC at the current valuation, seemed much better than most of the other opportunities outside of what I am holding. Pretax earnings yield of ~8% + 2.5% starting div yield. 0 debt, doesn’t need much working capital to grow, negative cash conversion cycle, very high return ratios, decent moat, platform businesses have inherent scaling. What’s lacking right now is a laser sharp focus from the management & fire in the belly of the management.
2. Very low charging on the GMV is an edge & creates barrier to entry.
3. I anticipate that the stock may not perform upto my expectations for the next 1-2 years & I am OK with that. Rather the stock may decline from here by 10-20 odd percentage & I am also OK witht that.
4. I think the recycling side of things should get sorted over the next 2-3 years. I am here to hold for at least 5 years unless there is a big negative event or I spot some other better opportunity.
5. The extra cash in the business may get distributed which will even lower my purchase price.
6. Low working capital requirements may mean growing dividends for a growing business over a very long period.
7. This business has a potential to give BEL like returns over long term (5 years+. The story might be a multi decade story).

Of course, I could be wrong & might sell tomorrow but the business seems a quality business, available at a reasonable valuation, decent moat, big & ever growing TAM, optionality due to cash.