2024-07-29 12:45:00 ET
Summary
- When we discussed our position in last year's Q2 letter, Endor was suffering from a global chip shortage.
- We believed that Endor would be worth a multiple if conditions normalized.
- We were surprised when just a few weeks after announcing strong Black Friday results, management reversed course.
The following segment was excerpted from this fund letter.
Endor AG (ENDRF)
Endor makes racing wheels, pedals, and other hardware for gamers playing motorsport games like Gran Turismo. The company was run by industry pioneer Thomas Jackermeier and has the leading market share, brand and technology in the premium segment of the market. Despite these advantages, we sold out of our position throughout the first half of the year after realizing that we had misjudged management's competence and character. While we always haircut our expectations to reflect the risk of management misexecution and understood that meant there was a small chance of substantial downside, the company's position at the forefront of a rapidly growing industry meant we saw a very bright future, multi-bagger upside, and on balance a favorable risk/reward. Yet as management continued to misexecute we believed the risk of our downside scenario had increased greatly and so the investment was no longer attractive. We therefore sold our position....
Read the full article on Seeking Alpha
For further details see:
Endor AG: Our Downside Scenario Played Out