Why One Fund Bought Wix Stock Despite a 53% Drop Over the Past Year
Key Points
New York City-based Elwood Capital Partners bought 17,710 shares of Wix in the third quarter.
The total position value rose by $3.57 million quarter over quarter.
As of September 30, the fund reported holding 40,033 Wix shares valued at $7.11 million.
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New York City-based Elwood Capital Partners disclosed a purchase of 17,710 shares of Wix.com Ltd. (NASDAQ:WIX) in a November 13 SEC filing, increasing the position by approximately $3.57 million.
What Happened
According to a Securities and Exchange Commission (SEC) filing dated November 13, Elwood Capital Partners LP increased its holding in Wix.com Ltd. (NASDAQ:WIX) by acquiring 17,710 additional shares in the third quarter. The post-transaction position stands at 40,033 shares valued at $7.11 million as of September 30.
What Else to Know
The added Wix.com position brings it to 4.34% of Elwood Capital's 13F assets under management after the filing.
Top holdings after the filing:
- NASDAQ:AMZN: $13.80 million (12.6% of AUM)
- NASDAQ:MSFT: $13.07 million (12.0% of AUM)
- NYSE:TSM: $12.57 million (11.5% of AUM)
- NYSE:UNH: $12.10 million (11.1% of AUM)
- NYSE:PLNT: $7.27 million (6.6% of AUM)
As of Wednesday, WIX shares were priced at $105.43, down a staggering 53% over the past year and well underperforming the S&P 500, which is up 15% in the same period.
Company Overview
| Metric | Value |
|---|---|
| Price (as of Wednesday) | $105.43 |
| Market Capitalization | $5.87 billion |
| Revenue (TTM) | $1.93 billion |
| Net Income (TTM) | $138.90 million |
Company Snapshot
- Wix.com offers a cloud-based platform for website creation, web applications, e-commerce tools, and business management solutions, including products such as Wix Editor, Wix ADI, Corvid by Wix, Ascend by Wix, and Wix Payments.
- The company generates revenue primarily through premium subscriptions, value-added services, and payment processing fees, leveraging a freemium model to convert registered users to paying customers.
- It serves individuals, small businesses, and enterprises globally, targeting users seeking accessible website development and digital business solutions.
Wix.com Ltd. is a leading provider of cloud-based website development and business management solutions supporting hundreds of millions of registered users worldwide. The company leverages a scalable, subscription-driven business model and a comprehensive suite of tools to empower users to build, manage, and grow their online presence.
Foolish Take
It’s certainly interesting when a fund decides to lean into a business where the fundamentals and the stock price are telling two very different stories.
Wix’s third quarter is a prime example. Revenue climbed 14% year over year to $505 million, bookings grew at the same pace, and free cash flow reached $127 million, or roughly 25% of revenue. Excluding acquisition and HQ-related costs, free cash flow would have topped $159 million. That’s not exactly the profile of a company in decline. Creative Subscriptions ARR rose to $1.46 billion, while Business Solutions revenue jumped 18%, showing strength beyond basic site-building tools. The standout, though, is Base44. Management now expects the AI-driven product to generate at least $50 million in ARR by year's end, with a credible path toward $100 million driven by strong early adoption and rising market share.
Nevertheless, the stock remains down more than 50% over the past year and roughly 70% from its 2021 highs. In Elwood’s portfolio, Wix sits alongside mega-cap compounders like Amazon and Microsoft, signaling patience and a bias toward durable cash generators rather than quick rebounds. For long-term investors, this is a reminder that sentiment can lag fundamentals for a long time, but cash flow rarely do.
Glossary
13F reportable assets: Assets that institutional investment managers must disclose quarterly to the SEC, showing their equity holdings.
Assets under management (AUM): The total market value of investments managed on behalf of clients by a fund or firm.
Quarter over quarter: A comparison of financial or operational results from one fiscal quarter to the next.
Freemium model: A business strategy offering basic services for free while charging for advanced features or functionality.
Premium subscriptions: Paid plans that provide users with enhanced features or services beyond a basic free offering.
Value-added services: Additional services that go beyond core offerings to provide extra benefits to customers.
Payment processing fees: Charges collected by a company for handling electronic transactions between buyers and sellers.
Stake: The ownership interest or share that an investor holds in a company or fund.
Top holdings: The largest individual investments within a fund’s portfolio, typically ranked by value.
TTM: The 12-month period ending with the most recent quarterly report.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Microsoft, Planet Fitness, Taiwan Semiconductor Manufacturing, and Wix.com. The Motley Fool recommends UnitedHealth Group and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
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