Key insights
- Coursera (COUR) is trading below its net cash value despite growing revenues, prompting activist investor Pale Fire to reveal a 14% stake. The activist's involvement suggests a potential catalyst for the stock, which has seen a significant decline. The author views this as a positive development, having recently purchased shares.
I have followed/owned COUR for some time, riding it from 6 to 12 twice. Now it is $3.60. Mkt cap is $914mm with $982mm in net cash. Revenue is growing. The business is just barely a net cash generator this year with material improvement expected next year. Now a small activist investor called Pale Fire has revealed a 14% stake in the company. Best I can tell, this firm was founded by a former CEO of Groupon, not that that means anything that I can tell. A profitable company with growing revenues should not be trading below cash on the balance sheet. I had resisted buying more this year as I could not explain why the shares slumped or see a a catalyst but now we have an indication of the latter. I bought 25,000 shares at $3.84 on Monday.