Off Everybody's Radar – The Rise of Roku
Tales from the long side of the ledger.
Note: “Off Everybody’s Radar” is reserved for occasional long ideas.
▶When I first mentioned Roku in February, with its stock down 76% over the prior five years, it seemed perfect for “Off Everybody’s Radar.”
I joked that we had just noticed the batteries in our unused Roku remote, to control the old Roku stick plugged into the back of one of our TVs, had corroded. We forgot we had one! “It now seems like the ultimate in streaming afterthoughts,” I wrote.
“But while nobody has been watching,” I continued, “Roku has re-engineered itself from mostly a hardware company into an advertising platform. The results are starting to show up in the numbers, with negative net debt and rising revenue and earnings.”
As is sometimes the case, I got sidetracked and never went further. Since then, the stock as of this morning has jumped up roughly 33%, well ahead of the market…
Still, even with the stock’s surge, Roku remains somewhat off everybody’s radar.
The Bear Case
Before I explain, here’s an abbreviated AI-generated summary of the bear case via my friends at Tenzing MEMO…