Intangible Valuation
Value, contrarian, coat tail rider, idiosyncratic research

Cinedigm: GAAP Complexity Conceals A J-Curve Business Model In Its Cash Collection Phase

Cinedigm Digital Cinema (NASDAQ:CIDM) has a rather complex business model. It is really three businesses which all complement each other: (1) digital cinema projector financing, (2) digital cinema services and software, and (3) content rights acquisition and distribution.

For this article, I start with the story of CIDM's financing arm, since that is what came first chronologically. We are interested in Cinedigm due to a few facts: (1) it is entrenched due to its early entry into digital cinema distribution and financing, (2) it has produced strong cash flows over the current market cap (over a 17% cash yield), (3) it has significantly improved its cost of debt financing, (4) it has recently inked a new deal with...

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