MultiBagger Madness 2020: Round of 64 Preview
The bracket is set! If you’re interested in reading about the tournament, methodology, and rules, check out my announcement post.
Our four play-in games for the 16 seeds wrapped up earlier today. The winners from each region:
SaaS: Okta (43% of the vote)
Commerce: Amazon (75% of the vote)
Fun: Tesla (51% of the vote)
Grab Bag: The Trade Desk (50% of the vote)
Each stock won handily. Okta had the smallest margin of victory at 13%. It’ll be interesting to see if any of these stocks can pull off an upset. They all have better name recognition than their 1-seed counterparts, so that could be enough to blow up the bracket. Speaking of which…
Our #1 Seeds
SaaS: Smartsheet (SMAR)
Commerce: Etsy (ETSY)
Fun: Nintendo (NTDOY)
Grab Bag: Digital Turbine (APPS)
These are all stocks that are highly beloved by their shareholders. Each one of them has a lot of potential and has been a good investment recently. Not all of them have tremendous name recognition, however, so it will be interesting to see how it plays out. I think we will learn something about the FinTwit audience in these matchups. Are they focused on lots of potential, or are they drawn to familiar names and big winners of the past decade?
The Round of 64
SaaS:
1 Smartsheet Inc. (SMAR) vs. 16 Okta Inc. (OKTA)
8 CrowdStrike Holdings (CRWD) vs. 9 BlackLine Inc. (BL)
5 Zoom Video Communications Inc. (ZM) vs. 12 Snowflake Inc. (SNOW)
4 PagerDuty Inc. (PD) vs. 13 Bill.com Holdings Inc. (BILL)
6 Datadog Inc. (DDOG) vs. 11 Alteryx Inc. (AYX)
3 Fastly Inc. (FSLY) vs. 14 Anaplan Inc. (PLAN)
7 Vertex Inc. (VERX) vs. 10 Salesforce.com Inc. (CRM)
2 Elastic N.V. (ESTC) vs. 15 MongoDB Inc. (MDB)
Matchup to Watch
I am fascinated by the 5/12 matchup in this region. Zoom has been on a tear recently. Its business has become a verb, and it is increasingly finding new use cases for its products. I think it has the potential to be the digital office platform. As people increasingly work from home, standardized tools, workflows, and communication methods will be needed. I think Zoom can capitalize on this trend.
Snowflake on the other hand is much less known. It is not even a public company yet, but its S-1 has sent shockwaves through the FinTwit community. With triple-digit revenue growth and net retention rates above 150%, Snowflake has captured the imagination of investors.
For those of you who do not know, Snowflake is “pioneering the Data Cloud, an ecosystem where Snowflake customers, partners, and data providers can break down data silos and derive value from rapidly growing data sets in secure, governed, and compliant ways.”
My gut tells me that Zoom takes this one, but it will interesting to see how widespread the love for Snowflake is.
Fun:
1 Nintendo Co. Ltd. (NTDOY) vs. 16 Tesla Inc. (TSLA)
8 Tencent Holdings Limited (TCEHY) vs. 9 Peloton Interactive Inc. (PTON)
5 Tattooed Chef Inc. (FMCI) vs. 12 Netflix Inc. (NFLX)
4 Zynga Inc. (ZNGA) vs. 13 Apple Inc. (AAPL)
6 Camping World Holdings Inc. (CWH) vs. 11 Roku Inc. (ROKU)
3 Celsius Holdings Inc. (CELH) vs. 14 Facebook Inc. (FB)
7 Activision Blizzard Inc. (ATVI) vs. 10 Nikola Corporation (NKLA)
2 Take-Two Interactive Software (TTWO) vs. 15 The Walt Disney Company (DIS)
Matchup to Watch
Nintendo got a tough draw here. It is a great business and deserves its 1-seed, but it will be going up against a cult favorite. Ironic for the makers of Mario, no?
There is much debate about whether Tesla is a good stock or not, but I expect that its popularity will win out here. Nintendo is at risk of losing to a 16-seed, but, in its defense, this is no typical 16-seed.
Commerce:
1 Etsy Inc. (ETSY) vs. 16 Amazon.com Inc. (AMZN)
8 eBay Inc. (EBAY) vs. 9 Chewy Inc. (CHWY)
5 Alibaba Group Holding Limited (BABA) vs. 12 Sea Limited (SE)
4 StoneCo Ltd. (STNE) vs. 13 MercadoLibre Inc. (MELI)
6 Pinduoduo Inc. (PDD) vs. 11 Shopify Inc. (SHOP)
3 JD.com Inc. (JD) vs. 14 The Home Depot Inc. (HD)
7 Square Inc. (SQ) vs. 10 PagSeguro Digital Inc. (PAGS)
2 Wayfair Inc. (W) vs. 15 Five Below Inc. (FIVE)
Matchup to Watch
Two companies battling for fintech and e-commerce dominance in Brazil meet in round one of MultiBagger Madness.
Who’s your favorite? MercadoLibre has a wider footprint across Latin America, but that might mean that StoneCo has more growth left. We’ll let the voters decide.
Grab Bag:
1 Digital Turbine Inc. (APPS) vs. 16 The Trade Desk Inc. (TTD)
8 Progyny Inc. (PGNY) vs. 9 KB Home (KBH)
5 2U Inc. (TWOU) vs. 12 Lemonade Inc. (LMND)
4 Ontrak Inc. (OTRK) vs. 13 Zillow Group Inc. (Z)
6 GrowGeneration Corp. (GRWG) vs. 11 Redfin Corporation (RDFN)
3 Rocket Companies Inc. (RKT) vs. 14 Teladoc Health Inc. (TDOC)
7 Domino’s Pizza Inc. (DPZ) vs. 10 NVIDIA Corporation (NVDA)
2 Flugent Genetics Inc. (FLGT) vs. 15 Berkshire Hathaway Inc. (BRK-B)
Matchup to Watch
Rocket Companies is a recent IPO. It is the largest home loan originator in the US and is known for its online Rocket Mortgage portal. It is a high growth stock and many people know of its products. It has been hard to miss the incessant marketing over the past few years.
Teladoc Health has been a beneficiary of the move toward digital healthcare. Its platform allows for videoconferencing between patients and doctors. It also is building out other services to be the major player in the digital healthcare industry. Its recent merger with Livongo Health is further proof of this. The transaction was initially met with skepticism from both companies’ shareholders, but many have come around to see it as a potential positive.
These are two completely different industries, and its hard to measure them against each other. I have no idea how this one will go.
The Schedule
SaaS region polls will be held Monday.
Fun region polls will be held Tuesday.
Commerce region polls will be held Wednesday.
Grab Bag region polls will be held Thursday.
Recap of the results and preview of the Round of 32 will be published Friday.
Thanks for Participating
I am enjoying sharing this tournament with all of you. Thank you for the engagement!
So far, it appears that Fastly (FSLY), 3-seed from the SaaS region, is the early fan favorite. Who would be your pick to win the tournament? Comment below or share on Twitter using #MBM2020 and #FinTwitChamp
I hope you all have a great weekend!