Stride: Given Enough Time, The Problems Will Be Fixed
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Laughing Water Capital1.49K FollowersFollow5ShareSavePlay(4min)CommentsSummaryStride is the largest operator of virtual schools for grades K-12 in the U.S., serving more than 240,000 students across 30 states.The company had been growing at mid to low teens percent for several years and traded at ~14x EBIT.The company attempted to upgrade the software that governs their enrollment process as well as their learning management software.The software implementation issues cost the company upwards of 10,000 enrollments and led to a more than 50% decline in share price.Early indications from both the company and various open market sources are that the company is well on its way to fixing the software problems. Melpomenem/iStock via Getty Images The following segment was excerpted from the Laughing Water Capital Q1 2026 Letter. Stride (LRN) entered our portfolio as a mid-sized position. The company is the largest operator of virtual schools for grades K-12 inThis article was written byLaughing Water Capital1.49K FollowersFollowLaughing Water Capital is a concentrated, long biased investment partnership open to accredited investors. We focus on owning pieces of businesses that are suffering from temporary problems or that are misunderstood by the market due to the vagaries of GAAP accounting or some sort of structural impediment. We consider our portfolio companies to be our partners, and we look for our management teams to have significant equity ownership in our companies. Properly incentivized, we expect our management teams to guide the company past their problems, at which point we will benefit from operational improvement and multiple expansion. Patience is essential.