While competitors retrench during recessions, Amphenol leverages its strong balance sheet to accelerate M&A. This counter-cyclical strategy allows it to acquire strategic assets at attractive valuations, ensuring it emerges from downturns with increased market share and strength.

While the metal card's 'clank' factor is a key marketing element, Composecure's dominance is built on technical innovation. The company was the first to integrate critical security features like EMV chips and dual-interface NFC technology into metal cards, creating a deep technological moat beyond just materials.

In the current market, companies prioritize liquidity and public market access over protecting previous private valuations. A lower IPO price is no longer seen as a failure but as a necessary market correction to move forward and ensure survival.

The massive 100x return on investment for card issuers like Amex and Chase makes them insensitive to the card's cost. This dynamic protects Composecure's high margins and discourages issuers from switching to cheaper, lower-quality suppliers for their most valuable customers.

The payment card market has a stable, recurring revenue base. Of the 4 billion new cards issued annually, most are replacements for expired or lost/stolen cards, not net new accounts. This provides a durable, predictable demand floor for manufacturers like Composecure, independent of new customer growth.

The most lucrative exit for a startup is often not an IPO, but an M&A deal within an oligopolistic industry. When 3-4 major players exist, they can be forced into an irrational bidding war driven by the fear of a competitor acquiring the asset, leading to outcomes that are even better than going public.

Despite the rise of mobile payments, even digital-first companies like Coinbase and Robinhood are launching premium metal cards. This trend validates the physical card's enduring status as a powerful tool for acquiring high-value customers, countering the narrative of immediate digital disintermediation.

Callaway is selling Topgolf for $1B after paying $2.5B four years ago. This loss highlights that businesses booming due to unique pandemic conditions may not sustain that growth, creating significant risk for acquirers who buy at the peak.

Major competitors in the broader card manufacturing space, Idemia and Thalys, lack Composecure's specialized technology. As a result, they act as resellers, leveraging their larger sales forces to distribute Composecure's products internationally, turning potential threats into a sales channel.