A company that is "about to be eliminated"—how does its return outperform Solana, the S&P, and Nasdaq?

Author: Santiago Roel Santos

Translator: Deep Tide TechFlow

Deep Tide Introduction: The core argument of this article is a counterintuitive judgment: the biggest beneficiaries of stablecoins are not the startups building them, but the established institutions with distribution channels.

The author bet on Western Union to outperform Solana in November 2025, and the result paid off, also outperforming the S&P and NASDAQ.

What’s worth reading is not just the conclusion, but how he uses the framework of “disruptive narratives depressing valuations, distribution channels priced at zero” to identify opportunities.

The full text is as follows:

I started researching Western Union because I believed stablecoins would disrupt its business. Why pay WU fees when you can transfer money anywhere in the world at a very low cost using stablecoins? Later, I realized that WU’s business is much stronger than this framework implies and that it is better positioned than almost anyone to embrace stablecoins. It has a brand and distribution channels. The key risk lies in whether the management will take action.

They hadn’t acted before. Until recently, they had an attitude of disdain. When I placed my bet in November 2025, I was willing to gamble that they would eventually act or that someone would force them to act. I am not an activist investor, but I felt pressure building.

This week I also spoke at the Digital Assets Summit, where WU’s CEO took the stage. I saw a completely different CEO who clearly articulated how stablecoins would compress the costs of global capital flows.

I took on the risk of this happening, but I liked my odds. At the time, WU’s P/E ratio was 3 times, and growth was declining. Many companies trade at such valuation levels and then go bankrupt. Betting on distressed companies is enticing; some will transform, while others will go to zero.

What I see in WU, and still see, is the distribution channel. A market leader with a brand, trust, and deep insights into consumer behavior—who understands both the consumer’s resistance to new financial primitives like stablecoins and their dependence on the familiar. People are always willing to pay for convenience. They trust WU. It is embedded in small grocery stores, convenience stores, and retail service points, where less tech-savvy consumers can cash out. This will not disappear overnight.

I have read “The Innovator’s Dilemma,” and I have invested in technologies that claim to replace WU itself. But I have come to realize that distribution channels are incredibly difficult to build, and trust is even harder—especially in the financial services sector.

I say this to illustrate: since I bet on WU to outperform Solana, it indeed has, and by a significant margin, also outperforming the S&P and NASDAQ. A classic mean reversion.

Starting from the assumption that the market is correct

I always assume the market is right and then reverse-engineer the reasons.

For WU, I repeatedly arrive at the same answer: the market prices it as a melting ice cube. A business heading towards its end, slowly being eaten away by Remitly, Wise, and a certain stablecoin-native remittance startup that just raised seed funding last week. If management does nothing, maybe that’s right. But the price is the most important variable, and at this valuation level, there’s quite a safety margin.

WU’s market capitalization is $2.8 billion. When I first researched it last year, the P/E ratio was close to 3 times, and today it is 6 times. $4.1 billion in revenue, $923 million in EBITDA, $500 million in net profit, 12% net profit margin. This is not a dying business but a cash machine that the market has already given up on.

The gap in valuation multiples is real, and the reasons behind it are real.

WU’s business exceeds both (referring to Remitly and Wise), covering over 200 countries and generating nearly $1 billion in EBITDA annually. A 6x P/E ratio means you are not paying for any recovery, any technology adoption, or any option value. The market is pricing the future upside at zero. The safety margin is here.

Core argument

This is the core argument that led me to found Inversion.

The market will view certain companies as death cases, assuming disruption is imminent, while giving zero credit to the decades of brand and distribution channels built by these companies. Adding the option value of technology adoption creates an interesting asymmetry.

The market structurally longs technology while shorting anything that looks outdated. The pace of innovation is accelerating, and it feels like AI will replace everything. This is not a discussion of whether creative destruction will happen—it will always happen. This is a discussion of price and what you are paying for it.

WU is taking action, and faster than expected.

Western Union CEO Devin McGranahan recently changed his stance. He clearly articulated at the Digital Assets Summit in New York this week how stablecoins will compress the costs of global capital flows—turning negative float into positive float and transforming cost centers into revenue sources. WU has now announced the launch of its own stablecoin, USDPT, on Solana, ironically issued through Anchorage Digital. This shift has been catalyzed by the GENIUS Act.

This is not a small signal. A remittance company with a 175-year history has transformed from a skeptical stance to launching its own stablecoin on Solana in less than a year, marking a significant shift in management posture. The pessimistic argument has always been that they wouldn’t act, and now they are acting. Just this alone warrants a repricing.

Execution risk still exists, and it always will. Everything will eventually be disrupted. The key is understanding what you are paying for the unfolding of the future. The downside risk is a 20% to 30% pullback when revenue declines accelerate, with a 10% dividend yield and $500 million in net profit as a buffer. The upside potential, as mentioned, is 4 to 5 times once they regain any credibility for growth.

In contrast, most high-multiple tech companies’ valuations are already set for perfect execution, and once perfect execution is assumed, even a slight deviation can overturn the argument. When something is seen as dead, it only takes a small sign of life. WU is showing signs of life.

The product vision I keep reflecting on

While I believe in technology, the deployment of technology and persuading customers to use it takes a long time. The more you understand the technology, the more you realize it excels at what it does, but certain core human behaviors do not change. This is especially true when it comes to money. When existing solutions are effective, most people will not try new things. Consumers are always willing to pay for convenience.

Users would rather click WU than download and learn a digital wallet. This is not ignorance, but the inertia, trust, and familiarity accumulated over a lifetime. This inertia has real economic value. That’s why WU still processes nearly 300 million transactions annually and why you can buy in at a 6x P/E and collect a 10% dividend in the meantime.

My core argument and position are this: the biggest beneficiaries of cost-reducing technology are not the startups building it, but the mature companies adopting it with distribution channels. Whether it’s stablecoins compressing capital flow costs or AI compressing operational costs, existing distribution channels are the leverage points. Startups commoditize the infrastructure, while mature companies capture the profits.

WU can lower costs through stablecoin channels while maintaining its reputation for convenience. If they are smart, they will launch a digital wallet to reduce payment commissions. Global users can choose to receive and hold dollars in the WU wallet, then spend with a Visa card. If users do not cash out, WU does not need to raise liquidity in the destination market, further compressing costs. The distribution channel remains unchanged, infrastructure becomes cheaper, and profit margins expand. Reducing costs is something you can control, and the inherent risks are much lower than underwriting revenue growth.

This is the option value that the market prices at zero.

WU is just one of them

I have long accepted that I will never time the market perfectly. My predictions about the future are no more accurate than anyone else’s. What I believe is that by positioning correctly, I can achieve better returns.

This positioning always comes back to the same argument: buy durable businesses with distribution channels at the right price. These businesses contain a lot of embedded option value. Not everyone will act in time, and some will die. But those that do act will significantly outperform the market, and those gains will far exceed the losses.

You now see General Catalyst, Thrive, and Bezos all entering traditional businesses with AI infusion. The opportunities in stablecoins and blockchain channels are the same.

The argument for Inversion is simple: buy assets with distribution channels at the best possible price while having the option to reshape the business with technology. The disruptive narrative depresses valuation multiples, and that is the entry point.

Invert, always invert. The question is not whether WU will be disrupted, but whether you are getting enough compensation for taking on that risk at an EBITDA of $923 million and a P/E ratio of around 6 times. I believe you are, and it’s generous compensation.

Disclosure: Long WU. Long SOL. This article is not investment advice.