We’ve had an excellent run with the BizNews Share portfolio. Its value has jumped from $200 000 to over $750 000 in seven years. With such stellar returns, the 2U holding, down 40% since its July 2020 purchase, is the proverbial sore thumb.
So I’d diarised 2U’s third quarter results, released last night, and this morning listened to CEO Chip Paucek’s earnings conference call. A great way to have started the day. I’m impressed. So were others. After-hour trade saw the stock rise a couple dollars to $28.50.
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The big story for 2U is regulatory approval of its $800m acquisition of mass online education operation edX which Paucek confirmed will now close this month. For context, edX is an online platform with 50m registered users (second only to Coursera). It’s bigger than Udemy, which was valued at $3.25bn in its latest fund-raising (Prosus and Tencent are big shareholders of that Nasdaq listing).
Paucek describes the deal as transformational. Around 20% of 2U’s expense goes into lead generation which edX will impact directly. Plus there’s a library of new products. Created in 2012 by Harvard and MIT, edX has massive numbers but loses money. 2U should fix that. Even though it’s a small cap ($2bn) tech investing gurus Cathy Wood and Ray Dalio are 2U shareholders. I’ll be buying more.
More for you to read today:
*Â RW Johnson asks ‘Where to from here?‘Â Says result of the Local Elections has effectively rendered much of SA ungovernable again
* Cadre deployment: A monster we failed to strangle at birth. James Myburgh writes about unheeded early warnings against the ANC’s destructive policy.
* How a 12-Year-Old From New Jersey Became the Youngest Chess Grandmaster Ever. Abhimanyu Mishra and his father booked one-way tickets to Hungary for a chance at history. ‘You will never be 12 years old again.’
* The GE Empire Breaks Up. Commentary from the Editorial Board of the WSJ on the company which was once worth $600 billion that’s splitting itself in three parts.
* And a special to celebrate SA’s 30th anniversary of the return to international sport. My podcast with Ali Bacher, Clive Eksteen and Adrian Kuiper recalling SA’s first ODI, in Calcutta on November 10, 1991.
* This is the last Premium newsletter for the week. My next few days will be consumed with the MTBPS (SA’s “mini” Budget) to be presented in Parliament tomorrow (Thursday). All relevant detail will available on BizNews from 2pm plus I’ll host our the traditional post-(mini) Budget webinar from 7pm to 8pm. Join me then. It’s open to all but you do need to register beforehand:Â Click here.
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