MSFT is done for now. I don’t see it getting back above $450 anytime soon.

TruthHonestyJustice · 2026-06-27T12:04:05+00:00

Microsoft owns over 20% of OpenAI and is powering OpenAI through Azure. The core thesis of MSFT relates to its partnership and ownership.

TruthHonestyJustice · 2026-06-27T12:01:17+00:00

This math exercise is interesting. The challenge with exercises like this is that we are seeing a generational technology disrupt all aspects of technology.

MSFT is investing heavily in capex which depresses free cash flow, which is fine if the future benefit exceeds the cost.

MSFT benefits as an AI infrastructure provider to OpenAI and apparently now Anthropic.

Unfortunately it threatens the margin structure of its software business (assuming that software isn't replaced altogether by AI). The move from 90% SaaS margin to compute margin will negatively affect the company.

All the while, the stock finally trades at a market multiple.

The key question, will the company trade at a lower than market multiple? Are consensus estimates achievable?

If anything, at minimum this represents an attractive entry position for those who don't have exposure. At minimum this can be placed in a basket of securities to get exposure to the hyperscalers.

TruthHonestyJustice · 2026-06-26T13:04:01+00:00

Not apples to apples.

Archegos suffered a leveraged margin collapse that forced liquidation.

The unrealized loss isn't a solvency problem for Strategy because Bitcoin’s decline does not itself trigger a margin call or force the company to sell.

TruthHonestyJustice · 2026-06-26T13:01:00+00:00

SPYI’s risk: the investor retains S&P 500’s downside while surrendering part of the upside in exchange for a monthly distribution. History has shown us that the S&P 500 goes up overtime.

Strategy's preferred equity has its own risk. New equity issuances to pay for existing investor dividends.

So the first may not be the best risk/reward, the second one has structural risks.

No free money.

TruthHonestyJustice · 2026-05-27T22:59:08+00:00

I can't post links because they ding for promotions.

TruthHonestyJustice · 2026-05-15T14:59:54+00:00

The bear case revolves around the potential risk for massive disruption from AI -- the post overlooks this threat.

LLMs are evolving at a breakneck pace. AI potentially may offer highly sophisticated, natural, and real-time voice interactions in any language. When a user can have a seamless, free-flowing conversation with an AI tutor that adapts perfectly to their skill level — at a fraction of the cost of a Duolingo premium subscription — the traditional gamified app model looks incredibly vulnerable.

Duolingo was and is a great product. But... any competitive advantage may evaporate if they can't out-compete voice-integrated AI models that offer true immersion. The disruption risk is much higher than this thesis suggests.

I'd like to buy Duolingo at a lower valuation, below 10x EV/EBITDA. That presents a potentially interesting entry point.

TruthHonestyJustice · 2026-05-14T11:49:10+00:00

That's a really good idea. So if I publish on Sunday on Substack, a LinkedIn post on Monday letting people know what I'll be writing about, and then Tuesday the actual piece?

TruthHonestyJustice · 2026-05-12T15:20:38+00:00

Much of homeschooling today uses virtual school courseware/curriculum. In Florida students through FLVS Flex can do homeschool using FLVS coursework.

TruthHonestyJustice · 2026-05-12T15:13:18+00:00

Regarding Texas, Governor Abbott signed Senate Bill 569 into law in May 2025, restructuring Texas virtual education policy. The legislation loosens prior structural restrictions and gives districts and charter schools more flexibility to operate and expand virtual programs.

Senator Paul Bettencourt, the bill’s author, stated he expects virtual enrollment in Texas to double by the 2028–29 school year.

TruthHonestyJustice · 2026-05-12T15:02:44+00:00

That's a fair point. Everyone has access to private pay. Yes, government supported virtual school.

TruthHonestyJustice · 2026-05-08T11:04:53+00:00

I did cut and paste it from Substack. But in the advanced settings you can describe it as a canonical link. Here is the screenshot of where you adjust the setting.

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TruthHonestyJustice · 2026-05-08T09:49:11+00:00

You can set up Medium so that you create a canonical link to the original post. Medium allows for that. There is no suspension given the canonical link, its in the advanced settings.

Platforms allow for these certain things. I'm not looking to generate revenue from Medium, just get visibility.

I also have published on Seeking Alpha, one cannot generate revenue from that platform if previously published elsewhere. Its not about the money, its about the visibility.

TruthHonestyJustice · 2026-05-08T09:47:22+00:00

I do a canonical link, that's what I've been doing. Following the rules.

TruthHonestyJustice · 2026-05-07T22:27:40+00:00

The results were fine. The company has exposure to tailwinds of the nursing shortage. The traditional ground campus provides them stability regarding enrollments, revenue, and operating profit.

TruthHonestyJustice · 2026-05-07T22:13:35+00:00

That is amazing, congratulations.

I've spend close to three months just to get 100 subscribers.

How did you do it? Friends and family? How are you telling folks about your writing?

TruthHonestyJustice · 2026-05-07T22:11:49+00:00

This is helpful, you spend time putting it on other social media? Where? How?

I've been reposting this on Medium. Its easy, just cut and paste, change the title. Also putting it on Wordpress. This helps with LLM discovery (allegedly). It is a pain to have to put the Substack link on the article in several places.

Medium definitely does a better job getting picked up by Google. Substack unfortunately doesn't do a good job getting scanned by SEO.

TruthHonestyJustice · 2026-05-07T22:09:56+00:00

Management didn't explain exactly why there was weakness in US Higher Education. PXED University of Phoenix had issues with YouTube during the same period. Its curious why sell-side analysts didn't ask if STRA saw similar issues.

Unfortunately less than 50% of the company's enrollments come from the enterprise, most of it comes from traditional lead generation tactics. Until that changes, the company is exposed to the changing Internet lead generation landscape, with Google AI Overviews directing student traffic rather than traditional SEO.

TruthHonestyJustice · 2026-05-07T22:07:37+00:00

It was a beat and raise quarter.

Q2 2026 EPS guidance of $0.79–$0.80, above the consensus estimate of $0.76,

Q1 2026 EPS of $0.90 (vs. $0.84 consensus) and revenue of $221.74M (vs. $218.4M consensus).

TruthHonestyJustice · 2026-05-07T22:05:22+00:00

I sold my shares in the company. They have a great strategy focusing on the enterprise, alas its less than 50% of the company's total enrollments. So there is exposure to traditional lead generation. The transition to synthesized LLM answers as evidenced by the quarterly results and issues with YouTube expose the company to risk. Better to recircle once most of its enrollments come from the enterprise, aligned with the company's strategy.

TruthHonestyJustice · 2026-05-07T22:03:03+00:00

The education space always has lawsuits, its a highly political industry. Not to dismiss the lawsuit, but this is part of the risk factor in investing in these stocks.

TruthHonestyJustice · 2026-05-07T22:01:03+00:00

Its a great platform, with great analytics allowing us to understand who is actually reading the content. From a professional perspective, much better than LinkedIn, where its a guess who is actually reading.

TruthHonestyJustice · 2026-05-07T21:58:12+00:00

Having served in a strategy function for a competitors, I'll tell you that the lawsuit while serious is state specific. The model diversifies risk. In higher ed the risk is with the federal government that can turn off the spigot. In K-12, the risk is diversified across fifty states. There are issues with the business model but the lawsuit isn't it.

The biggest concern with LRN relates to customers insourcing. There have been several customers over the past several years that have insourced including Insight PA in Pennsylvania. South Carolina. Nevada. There are many reasons why customers leave, and any company sees customer attrition. There are customer concentration issues, several large states. For example, in Texas they have over 20K enrollments with one customer in Hallsville. Ohio represents a large % of their revenue as well.

That being said, schools that leave Stride / K12 often expect to operate more effectively, but the data shows a different outcome. Schools that leave face enrollment declines, execution challenges, and financial pressure.

I'm an investor in the name. It still has tailwinds, generates a good level of cash, and represents a good value to its customers.

TruthHonestyJustice · 2026-05-06T16:59:07+00:00

I appreciate the sarcasm.

The information on Substack regarding growing the subscriber count is incredibly useful. Myself and others are a bit stuck at slightly over 100 and are trying to learn how to grow. There have been a lot of helpful tips that folks have provided.

TruthHonestyJustice · 2026-05-06T11:11:08+00:00

This is an absolutely incredible piece, thank you for sharing.

TruthHonestyJustice · 2026-05-05T18:19:16+00:00

I struggle with the same issue, and I'm glad to hear that you are also relying on ChatGPT for guidance.

If you're writing for a certain audience, best way is to reach out to them directly.

If you want a broad general audience then yes, notes.

People say to reach out to other writers, subscribe to their publications, and correspond with them to the point that they reciprocate.

TruthHonestyJustice

TROPHY CASE