Laughing Water Capital released its second-quarter 2026 investor letter, reporting a quarterly return of approximately 39.8% net for its Class A investment, bringing the year-to-date return to about 33.6% net. The firm highlighted Stride, a K-12 virtual education business, noting continued progress in upgrading its technology stack after prior issues with enrollment and user experience. However, Stride lost a school in Texas that will not be renewing, though historically most affected students re-enroll in another Stride school, limiting the impact. The market reacted negatively, extrapolating further losses, and shares suffered, but Laughing Water Capital believes that if technology problems are fixed, Stride will return to growth and shares will re-rate higher. Stride trades at a single-digit multiple of cash flow, serves a growing student base with recession-resilient services, and has a large buyback in place.
Stride IncContinued progress in upgrading technology stack after prior issues, expected to drive growth and re-rating.