How a $56 Million Bet on Stride Reflects Investor Jealousy and Hope

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Imagine, if you will, the world of investing as a sort of grand culinary experiment-sometimes you taste the sweet, sometimes the bitter, and sometimes you’re left pondering how a simple spoonful could cause such a commotion. Recently, a firm called Divisadero Street Capital Management-an aspirational name if ever there was one-decided to make a sizable entrée into the tech-for-education company known as Stride. They scooped up 375,000 shares, valuing this tiny slice at a staggering $55.85 million, and all this was just revealed in a routine filing from the SEC, which is the financial equivalent of a polite tiptoe into a sibling’s bedroom to see what’s happening.

What happened?

In the grand theater of finance, the third quarter of 2025 was apparently the act where Divisadero unceremoniously cast this new character, Stride, into their portfolio. For those who like to keep score, they now hold just over 2.4% of this young, ambitious company. It’s a modest slice, but given the $2.29 billion of assets under management, it’s more of a gesture of curiosity than a declaration of war. Still, it’s enough to turn some heads, not least here, with me, an investor by profession and a curious wanderer by habitual impulse.

What else to know

This was no accidental handshake; it was the start of a relationship that sees Stride among Divisadero’s top holdings, nestled comfortably somewhere between Dave Inc and Turning Point Brands. The last I checked, Dave was commanding nearly 5% of assets, a figure that suggests Divisadero’s taste leans toward the digital grind-whether it be online banking, vaping accessories, or tuition for virtual classrooms. As of mid-November 2025, Stride’s stock was trading at around $65-a price that makes me wonder if futures traders secretly enjoy a bit of masochism, given its 35% drop from where it once stood early last year.

Despite this, the company’s revenue is marching steadily forward-like a kid on a bike with training wheels-posting an 18.2% compound annual growth rate over five years. That’s the kind of thing that makes an analyst crack open a smile, even as the stock price recoils in horror. Stride specializes in providing technology-powered educational services-imagine a university that’s all apps, sensors, and algorithms instead of professors and chalkboards. They serve K-12 students, working adults, and even those government folks who still believe in the power of a well-drafted contract and a good spreadsheet.

Company Overview

Metric Value
Price (as of market close 2025-11-13) $64.98
Market capitalization $2.85 billion
Revenue (TTM) $2.48 billion
Net income (TTM) $315.86 million

Company Snapshot

Stride is the kind of company that makes you marvel at the sheer audacity of modern entrepreneurship. It offers online education services-kind of like if Amazon started running schools, but with a dash of the software magic we associate with Silicon Valley. Their revenue streams come from contracts with public and private schools, as well as directly to consumers who are increasingly willing to pay for virtual learning. Clearly, the company believes in the future of education that’s rooted not just in brick and mortar, but in the cloud.

It’s worth noting that the firm has a diversified portfolio-virtual schools, career programs, workforce development-kind of like a Swiss Army knife for the education sector, poised to carve out a niche no matter how turbulent the waters of traditional schooling might be.

Foolish take

Now, here’s where the plot thickens. The purchase of Stride stock by Divisadero-in some ways-resembles that moment of reckless hope when you buy a lottery ticket after a string of wins, only to find yourself staring down a losing streak. The average price paid? About $149, a figure that, in hindsight, still sounds dizzyingly high considering the subsequent nosedive. Stride’s shares took a nosedive of fifty percent after some botched system upgrades, which, if you ask me, is roughly the financial equivalent of trying to fix a jet engine while flying and ending up with more smoke than fuel.

In particular, the company’s failure to smoothly implement a significant platform upgrade cost them thousands of enrollments-roughly 10,000 to 15,000-out of a total of about 250,000. That’s like losing almost 6% of your customer base overnight-definitely not the sort of thing investors dream of on their morning coffee. The market’s reaction was swift and brutal, a reminder that sometimes, all the technology in the world can’t save you from your own hubris.

Yet, oddly enough, Stride still managed to beat quarterly earnings expectations and remains a leader in its niche. I suppose sometimes you need to stumble before you learn how to walk. Personally, I find this half-step-and-fall scenario makes the stock a fascinating proposition-at just about 10 times earnings, it’s something of a bargain if you’re willing to overlook the fragility of its reputation.

Now, I’m watching how Divisadero and others respond-whether they double down with gusto or decide to quietly retreat. For my part, I’ve begun nibbling at the shares, in small increments, because, after all, that’s what investments are-daring, alert, and sometimes just a bit foolish. But one thing’s certain: in the grand kingdom of education stock investing, Stride’s tale is a reminder that the path of progress is often riddled with pitfalls, and patience is as vital as a good Wi-Fi connection. 😊

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2025-11-17 19:53