This Fund Just Made a $100 Million Bet on Wix as Fundamentals Improve After Steep Stock Slide

San Francisco-based investment firm No Street GP LP established a new, substantial position in Wix.com (NASDAQ:WIX) during the third quarter, acquiring 550,000 shares valued at $97.7 million. This investment now constitutes 6.4% of the fund's U.S. equity holdings and is its fourth-largest position, indicating high conviction despite Wix's 32% year-over-year stock underperformance. The firm's move suggests a belief in Wix's recent operational improvements, including 12% Q2 revenue growth, accelerating new-cohort bookings, and robust free cash flow, positioning the company for potential recovery and growth.

Analysis

Investment firm No Street GP LP initiated a substantial new position in Wix.com (NASDAQ:WIX) during Q3, acquiring 550,000 shares valued at $97.7 million. This investment represents 6.4% of the fund's U.S. equity holdings and ranks as its fourth-largest position, signaling high conviction despite Wix's 32% year-over-year stock decline. The firm's history with high-volatility compounders suggests a belief that Wix's recent underperformance may be nearing an inflection point.

This conviction is supported by Wix's recent operational performance, including a 12% year-over-year Q2 revenue increase to $489.9 million and accelerating new-cohort bookings, which grew 14% and exited July above 20%. The company also generated $147.7 million in free cash flow and executed $100 million in share repurchases at an average price of $154.69. Furthermore, the Base44 acquisition is projected to add $40-50 million in ARR by year-end, expanding Wix's application development reach.

No Street's move implies a view that Wix, a high-margin SaaS model, is regaining momentum, with its stock potentially trading below historical peaks. Improved cohorts, durable cash flow, and an expanding addressable market suggest a rebuilding from strength. While volatility may persist, current trends indicate a potential undervaluation given its growth trajectory.

Key Decisions for Investors

• Investors should closely monitor Wix's accelerating new-cohort bookings and free cash flow generation as key indicators of its operational recovery and potential for sustained growth.
• Assess Wix's current valuation relative to its historical peaks and the potential for its high-margin SaaS model to regain momentum, particularly with an expanding addressable market.
• Consider the implications of significant institutional positioning by firms like No Street, which may signal a perceived inflection point for Wix despite its recent stock underperformance.