Thank you for your comments @MarsC I too think that there has...

Thank you for your comments @MarsC

I too think that there has been a structural shift to online. To assume that April and May was a one off boost is shortsighted. To assume that the growth rates is permanent is also silly.

As with most things, the truth lies somewhere in between. They were growing at a clip of 20% on average pre covid, and have exhibited 100% growth during covid.

Assuming Matt Blatt turns out extremely profitable, growth rates play out to be 50% per annum for the next 2 years before tapering off to 25% per annum to perpetuity after that, combined with them using the large cash balance to look at opportunistic purchases, I think the market has got the valuation about right now.

Ceteris paribus, my base case valuation comes to $15.72 which we are not that far away from.

Now that Kogan has indicated that they prefer to have cash to invest in opportunistic brands, the dividend policy will be interesting. Will they pay dividends or keep the cash, now that there are plenty of failing businesses out there who have been swimming naked as Warren Buffet puts it so eloquently.