To capitalize on its deep discount to NAV, Exor employed a sophisticated reverse Dutch auction for share buybacks. This allowed the company to repurchase €1 billion in shares at the lowest prices offered by shareholders, maximizing value accretion.
The company's declining operating margins post-2017 were not a sign of weakness but a deliberate strategy. Management aggressively reinvested profits into logistics and payments, temporarily compressing margins to solidify long-term market dominance and build a powerful competitive moat.
Meta is no longer the capital-light business it once was. Its massive, speculative spending on the Metaverse and AI—where it is arguably a laggard—makes future returns on capital far less certain than its historical performance, altering the risk profile for investors.
MercadoLibre built its payment system, MercadoPago, out of necessity in a market lacking a trusted digital payment solution. This created a powerful, integrated commerce and payments flywheel that fueled adoption and established a moat that competitors like Amazon struggled to overcome.
With over 3 billion monthly active users and still in the very early stages of monetization, WhatsApp is a significant embedded call option within Meta. Successfully monetizing this user base could become a primary driver of earnings growth over the next decade.
Meta's core moat is its ability to solve the classic advertiser's dilemma: knowing which half of their ad spend works. By providing granular data on impressions, conversions, and ROI, it created what Pat Dorsey called the perfect advertising platform.
No other publicly traded company has matched MercadoLibre's record of 27 consecutive quarters with over 30% top-line growth. This unparalleled consistency, driven by deep market dominance and secular tailwinds in Latin America, signals a unique investment opportunity.
Despite skepticism about recent large bets, Mark Zuckerberg has a proven track record of successfully navigating massive technological shifts. His history of beating MySpace, pivoting to mobile, acquiring Instagram, and launching Reels to counter TikTok demonstrates formidable strategic agility.
Instead of mirroring Amazon’s capital-intensive, fully-owned logistics network, MercadoLibre adopted a flexible hybrid model. It owns the core infrastructure but partners with local services for last-mile delivery, achieving speed and reliability without the massive capex burden.
Public markets punish complexity, creating opportunities. Exor's diverse portfolio of cars, tractors, luxury goods, and media is so heavily discounted that the market value of its Ferrari stake alone is greater than the entire company's market capitalization.
Exor, an Italian holding company, owns 20% of Ferrari. Due to a deep conglomerate discount, Exor's entire market cap is less than the value of its Ferrari stake alone, effectively offering Ferrari shares at a steep discount plus other businesses for free.
Despite the market's skepticism reflected in a deep discount, Exor's management has a stellar track record. Since 2009, CEO John Elkann has compounded the company's net asset value at 18% per year, significantly outpacing the MSCI World Index's 12%.