BKNG · investment memo
Four distinct questions, one field each. A price is not a thesis: the trigger below forces a re-underwrite and freezes further purchases — it is never an automatic sell.
A daily close below $170.05 triggers a mandatory re-underwrite and freezes further purchases. It is not an automatic sell unless a separate fundamental invalidation condition has been breached.
Fundamental and falsifiable, never price-based. If one is satisfied the thesis is marked dead and the position is retained only by explicit decision.
Named cause: the SEO decline the company itself forecasts. The 10-Q states *"we expect SEO traffic to decline in the short to medium term, which may lead to increased spend in paid marketing channels"*, while direct mix has stopped improving (mid-fifties percent in both TTM periods) and performance marketing ROIs are already described as lower. Quantified: if marketing rises from 4.40% to 5.20% of gross bookings — 80bp, roughly the swing BKNG absorbed in the 2018–19 competitive cycle — that is ~$1,600m of operating income on FY2026 gross bookings near $200bn, or ~5.5pp of operating margin. Mar