{
  "docId": "019dd923-622c-750b-8b98-75b90dee081f",
  "docSlug": "664272f4012c",
  "documentTitle": "2U, Inc. (TWOU)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": null,
  "documentKindSlug": "activist-deck",
  "documentKindLabel": "Activist deck",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2018-07-19 00:00:00",
  "orientation": "landscape",
  "aspectRatio": 1.3333334,
  "pageNumber": 43,
  "pageCount": 50,
  "prevPage": 42,
  "nextPage": 44,
  "slideType": "valuation_table",
  "function": "show_valuation_bridge",
  "density": "dense",
  "nDataPoints": 48,
  "notes": "Includes a callout box explaining the rationale for the peer multiple selection (5.0x-7.0x) based on student acquisition costs and program churn.",
  "elementsJson": [
    "headline_text",
    "callout_box",
    "valuation_table",
    "footnote"
  ],
  "metadataConfidence": 1,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b98-75b90dee081f/43",
  "deckHref": "/decks/019dd923-622c-750b-8b98-75b90dee081f",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b98-75b90dee081f.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-75b90dee081f#slide-43",
  "components": [
    {
      "bbox": {
        "h": 0.25,
        "w": 0.2,
        "x": 0.79,
        "y": 0.715
      },
      "kind": "callout",
      "text": "With student acquisition costs Increasing (i.e. marketing cost) and a realization amongst investors that “the install base” needs to be replenished every 2 years (i.e. students graduate out of the programs), a mid-range peer multiple of 5.0x to 7.0X revenues is likely",
      "attrs": null,
      "subkind": "primary",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "36649f8e-52f0-4207-bb5d-328e2762eb9d",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "metric",
      "text": "Price Target: $47.72",
      "attrs": null,
      "subkind": "primary",
      "toolName": "Quantification",
      "toolSlug": "quantification",
      "confidence": null,
      "componentId": "019dd953-0935-737e-8dab-bfe575e11135",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.94,
        "x": 0.03,
        "y": 0.17
      },
      "kind": "paragraph",
      "text": "2U is one of the highest valued “Cloud based SaaS” companies. As Investors conclude that the competitive landscape is going to make future programs wins more difficult in addition to not being as profitable to 2U, we believe the stock could re-rate to ~$47 representing up to 50% downside from current levels.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "eefafed9-1524-4b84-85ad-b90b40b7702f",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.05,
        "w": 0.5,
        "x": 0.03,
        "y": 0.94
      },
      "kind": "source-note",
      "text": "Source: Bloomberg, Company Filings and Spruce Point Estimates (1) NPV / Program of $7.4M assumes an average take-rate of 45% across all future successful programs.",
      "attrs": null,
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "11a2dce4-08e1-4381-a7b3-f6559dc6f39d",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.55,
        "w": 0.76,
        "x": 0.03,
        "y": 0.31
      },
      "kind": "table",
      "text": "Sum of parts valuation table showing segments, future programs, enterprise value, net debt, implied market cap, and price targets.",
      "attrs": null,
      "subkind": "valuation",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "283bb429-9911-4c26-92c2-9b94824f81d6",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.65,
        "x": 0.32,
        "y": 0.03
      },
      "kind": "title",
      "text": "Sum of Parts Valuation Implies 30% To 50% Downside Risk",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "0efffaea-8ccb-4dce-877f-f8b8501f1cbc",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [
    {
      "name": "Sum of parts",
      "slug": "sum-of-parts",
      "agent": null,
      "layer": "slide",
      "matchId": "837663fb-9e0a-4971-81f6-c1dedaac0072",
      "evidence": "Sum of Parts Valuation Implies 30% To 50% Downside Risk",
      "confidence": 0.9
    }
  ],
  "frameworks": [
    {
      "name": "valuation-bridge",
      "slug": null,
      "matchId": "34115318-b509-4366-b723-40144c7ff85e",
      "evidence": "Sum of parts valuation table",
      "confidence": 0.9
    }
  ],
  "arcBeats": [
    {
      "to": 43,
      "from": 36,
      "beatId": "addf7568-0835-4988-835c-75a22c5b8f15",
      "arcName": "Problem-Agitate-Solution",
      "arcSlug": "problem-agitate-solution",
      "beatName": "Solution (Provide relief)",
      "beatSlug": "problem-agitate-solution-solution-provide-relief",
      "evidence": "The document provides a solution to the problem by arguing that 2U's valuation is unsustainable and that shorting the stock is a viable option",
      "position": 2,
      "confidence": 0.8,
      "parentBeatName": "Resolution",
      "parentBeatSlug": "resolution"
    }
  ],
  "loops": [
    {
      "to": 43,
      "from": 36,
      "name": "Cost Of Inaction",
      "slug": "27-cost-of-inaction",
      "bestFor": "Urgent budget requests, compliance, risk mitigation",
      "matchId": "0c43b3e0-b384-4ed7-9517-c9fcd9f1bf87",
      "evidence": "The document highlights the potential downside risk of 2U's stock and the benefits of shorting it",
      "position": 0,
      "objective": "to highlight the risks of not shorting 2U",
      "structure": "The Status Quo -> The Hidden Costs Accumulating -> The Future State of Inaction -> The Tipping Point",
      "confidence": 0.7,
      "description": "Quantify what happens if the audience does nothing"
    }
  ],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}