What's next for RedBubble?

I've been reevaluating what's next for RedBubble and its share price off the back of Wayfair's recent results (announcing 500m plus of annual cost savings, and driving towards adjusted EBITDA profitability within a year or so).

The market has reacted unfavourably to RedBubble ramping up OpEx at the same time as sales fall off. Everyone in EComm is facing the same challenges - its a very tough environment out there, particularly in the UK/Europe, but also in the US.

While previously I've suggested that RedBubble should stay the course, and "grow into" their uprated OpEx, I was wrong. The global economic outlook looks like it could be weak for a number of years- and RedBubble sits at the discretionary end of spending.

I've come to the opinion that RedBubble urgently need to cut back on OpEx. I'd like to see it come back by roughly a third, to $23m per quarter, or within an envelope of $100m per year. I don't believe they are going to be able to grow revenue significantly over the next 1-2 years - you can see they're struggling today with yet ANOTHER sale (20-60% off). This is a sign of desperation in my mind- as when customers get used to frequent sales you end up cannibalizing your full price orders.

I don't expect them to do anything before Christmas- but I expect an announcement to come either with or before the H1 results which will be in mid Feb.