In my latest Freedom Portfolio update, I mentioned: “Going forward, I’m hoping to try to write short pieces explaining my trades within a week of me making them, instead of saving them all up for the quarterly recaps.” in that vein, here is my first trade since my last quarterly update.

A few days ago, Livongo announced some pretty incredible earnings that were unfortunately immediately and completely overshadowed by the shocking announcement that they were being acquired by / merging with Teladoc (TDOC). Investors were largely not pleased with the news, with both companies dropping 10-20% in the days following the news.

I have to admit that my first reaction was crushing disappointment, even though I own both Teladoc and Livongo. Why? In short, because I felt like Livongo had a long runway still ahead of it and that this Teladoc merger was in effect stealing some of that upside away from me. I was prepared for the possibility that Livongo would be acquired by another company, but I figured that it would be for a decent premium and the premium for this deal was relatively small. To add insult to injury, instead of getting a pop in the stock price from the great earnings report, I was seeing two of my positions have a sizable drop.

But I’m a long term investor, and as I spent more time thinking about it, I started warming up to the merger more. I still don’t really understand why Livongo management made the decision they did and still don’t think it was the best move, but I’m also perfectly willing to admit they knew something or saw something that I didn’t. Either way, the new combined Teladoc / Livongo entity would seem to be a powerful entity in what could be a new normal of remote healthcare.

However, if the merger goes through (and using current prices), the new combined Teladoc / Livongo entity would likely go from two separate Serenity level holdings to a single massive Babylon 5 level holding. That felt a little too large to me, so I thought I would take this opportunity to trim my Livongo holdings some (still having more than tripled from where I purchased despite the recent drop) to redeploy that capital elsewhere.

For weeks, I had been wanting to add to my Sea Limited (SE) position as I’ve gotten more and more excited about the potential growth for the company during this COVID pandemic. And with Mercado Libre (MELI) reporting earnings early next week, this felt like as good a time as any to get a purchase in, so adding to my Sea position was a no-brainer for me. With the new purchase, Sea has now become an Enterprise level position for me, which feels about right.

With the rest of the cash, I added to my much smaller Fastly position. I had started my position about two months ago and have been impressed by the company so far. They had a big drop after earnings this week (down roughly 30% over the past few days), which feels like a bit of an overreaction to the news that Tik Tok (which might get banned in the United States) is responsible for 12% of their revenue. I increased my position. It’s still a Millennium Falcon level holding, but now it’s a much larger Millennium Falcon level holding.