RPD Opportunity Fund commentary for the month ended May 31, 2025.
The RPD Opportunity Fund returned +8.60% net in May, bringing year-to-date net performance to over +14% net. We were pleased with the month’s results, as several of our long positions performed well and our options strategy continued to contribute positively.
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Markets in May were shaped by a mix of macro crosscurrents. Uncertainty around shifting trade policy headlines kept volatility elevated. For our strategy, this environment was constructive. As we have noted in prior updates, volatility expands our opportunity set by creating mispriced risk, richer option premiums, and dislocations we can underwrite through bottom-up research grounded in fundamental valuation.
Portfolio Update
The standout performer in May was Domo Inc. (NASDAQ: DOMO), a cloud-based data experience platform that helps businesses connect and visualize real-time data across systems. Its products enable better decision-making through integrated dashboards, AI-powered analytics, and workflow automation. We have held the position for about a year, and its stock price rose nearly 50% during the month following earnings. The market's perception began to shift, with investors recognizing the company’s improving growth profile and cost discipline. Our investment thesis was centered on recurring revenue strength, high customer stickiness, and operating leverage, and we are encouraged to see early signs of that thesis playing out.
We exited our position in Appian Corporation (NASDAQ:APPN) after the stock, which was assigned to us through short puts, rallied following strong earnings. The trade underscores the effectiveness of our options strategy, which is rooted in fundamental research and disciplined strike selection. Our thesis on APPN’s leadership in AI-driven enterprise automation largely materialized, and we used the post-earnings strength to lock in gains. We also exited Bumble Inc. (NASDAQ:BMBL) at a loss. While the stock had reset to a much lower valuation, we assessed that the return potential elsewhere was superior, and elected not to hold through Bumble’s prolonged transition.
The Fund had a strong May even though our four largest long positions have yet to contribute meaningfully to returns. We remain confident in each and believe they have the potential to generate significant upside when sentiment improves, and fundamentals begin to matter again. Domo’s performance this month is a good reminder that these turnarounds can happen quickly and decisively when they do occur.
In May, the Fund maintained an average notional long exposure of 113% and short exposure of 17%, resulting in a gross exposure of 130% and a net exposure of 96%. The portfolio is broadly diversified across a range of sectors, including software and data infrastructure, Chinese internet, consumer apparel and retail, real estate services, online marketplaces, hospitality and gaming, AI-driven enterprise platforms, and specialty beauty and home.
We continue to maintain a balanced portfolio that combines high-conviction long positions with attractively priced, fully cash-secured options on both the long and the short side. Our long positions reflect companies we believe are materially undervalued based on rigorous bottom-up analysis. The options strategy complements this by generating premium income while managing entry points into names at highly attractive valuations with favorable risk-reward characteristics. Our software holdings, which have historically been a core strength, are beginning to contribute more meaningfully to performance.
We are steadily chipping away after a difficult 2024. Recovery is rarely a straight line. Being a contrarian value investor in a market that continues to reward momentum requires discipline and patience. We remain focused on the long term and are encouraged by how the portfolio is positioned today. Volatility has been a helpful tailwind, providing both premium income and compelling entry points. With a carefully constructed mix of deeply researched equity positions and cash-secured options, we believe the Fund is well positioned to continue delivering attractive returns.
If you have any questions or require additional information, please contact Investor Relations at [email protected].
Best regards,
RPD Fund Management LLC
(212) 201-2650
