SCHEDULE: Sosin Entities Adjust Cardlytics Stake to 9.8%

CAS Investment Partners and affiliated entities have updated their beneficial ownership in Cardlytics, Inc. to 9.8% through recent transactions and distributions.

Summary

• CAS Investment Partners, LLC, Sosin LLC, and Clifford Sosin collectively hold 5,198,067 shares of Cardlytics, Inc. common stock, representing 9.8% of the outstanding shares.
• Sosin Master, LP directly owns 3,198,584 shares (6.0%), acquired for approximately $88,620,705.
• CSWR Partners, LP directly owns 1,999,483 shares (3.8%), acquired for approximately $65,026,672.
• The total number of Cardlytics shares outstanding is 53,236,901 as of July 31, 2025.
• Sosin Master, LP and CSWR Partners, LP engaged in open market sales of common stock on August 18 and 19, 2025.
• Sosin Master, LP distributed 15,855 shares and $57,000 principal amount of Notes pro rata to its partners on June 30, 2025, for no consideration.
• The reporting persons hold $13,741,366 principal amount of Notes (Sosin Master) and $7,501,634 principal amount of Notes (CSWR), but do not deem themselves beneficial owners of underlying shares due to the Issuer's cash/share conversion option.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to recent share sales by the reporting persons, indicating a reduction in their direct equity exposure, despite maintaining a significant overall stake. The pro rata distribution also suggests a rebalancing rather than increased conviction.

Positives

• Significant institutional investment by CAS Investment Partners and its affiliates, holding nearly 10% of the company.
• The continued holding of a substantial principal amount of convertible notes ($21,243,000 combined) indicates a long-term interest in the company's potential.

Negatives

• Recent open market sales of common stock by Sosin Master, LP (210,000 shares) and CSWR Partners, LP (190,000 shares) on August 18-19, 2025, at prices around $1.12-$1.14 per share.
• Pro rata distribution of shares and notes to partners by Sosin Master, LP, which reduces the direct holdings of the fund.

Risks

• The Issuer's sole discretion to settle convertible note conversions in cash, shares, or a combination means reporting persons do not have a guaranteed right to acquire underlying shares, impacting potential equity upside from the notes.
• Market price fluctuations could impact the value of the reported beneficial ownership.

Future Outlook

The filing does not provide explicit forward-looking statements or guidance from Cardlytics, Inc. It primarily details changes in beneficial ownership by the reporting persons.

Industry Context

This filing reflects an institutional investor's adjusted stake in a company operating in the digital advertising or financial technology sector, specifically related to purchase-based insights and rewards. The recent sales by the reporting persons could indicate a rebalancing of their portfolio or a response to market conditions, which is a common practice among active investors in dynamic industries.

Comparison to Industry Standards

• The 9.8% stake held by CAS Investment Partners is a significant activist-level position, often indicative of an investor seeking to influence corporate strategy or governance, similar to other activist funds like Elliott Management or Starboard Value in their respective target companies.
• The holding of convertible notes alongside common stock is a common strategy for investors seeking both equity upside and fixed-income characteristics, comparable to strategies employed by funds investing in growth-oriented tech companies with complex capital structures.
• The recent sales at prices around $1.12-$1.14 per share, while not explicitly compared to industry benchmarks in the filing, suggest a valuation point at which the reporting persons deemed it appropriate to reduce some exposure, which is a standard portfolio management action.

Related Party Transactions

• Sosin Master, LP engaged in a pro rata distribution of 15,855 Shares to its partners for no consideration on June 30, 2025.
• Sosin Master, LP engaged in a pro rata distribution of $57,000 principal amount of Notes to its partners for no consideration on June 30, 2025.

Stakeholder Impact

• Shareholders: The reduction in direct shareholdings by a significant institutional investor through sales and distributions could be perceived negatively by other shareholders, potentially signaling a lack of strong conviction at current price levels.
• Creditors (Noteholders): The continued holding of convertible notes by the reporting persons, despite the pro rata distribution, indicates ongoing interest in the company's long-term prospects, which could be viewed positively by other noteholders.

Key Dates

Recommendation

While a significant institutional investor maintains a large stake, the recent sales and distributions by the reporting entities suggest a rebalancing or profit-taking at current price levels rather than increased accumulation. This indicates a cautious stance, warranting a 'hold' recommendation for seasoned investors to observe future developments and the company's performance.

Keywords

Cardlytics, CDLX, Schedule 13D, Beneficial Ownership, Institutional Investor, CAS Investment Partners, Clifford Sosin, Common Stock, Convertible Notes, SEC Filing