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Independent Ad Tech Opportunities With Extremely Negative Market Sentiment
- Following Q2 earnings, most independent ad tech companies sold off sharply.
- The market fears that competition from Tier 1 players cannot be overcome.
- This results in some pretty remarkable valuations for contrarian investors.
Buy Vocera Before It Potentially Gets Acquired
- Former high flying technology IPO is trading at historic lows following disappointing Q3 and FY2014 guidance caused by weak domestic hospital spending.
- Industry leading medical communication software platform and devices that have unprecedented stickiness among users, heavy patent protection and rapid international growth.
- Acquisition by hospital supply company can cut $40M from expense line and will make Vocera immediately profitable despite challenging market conditions.
- Extremely heavy hedge fund ownership in positions that are deep underwater will likely force a sale of the company at a price well over 100% above current levels.
- This pressure can be evidenced by the recent departure and immediate hiring of new CFO who is coming off a role in a similar situation where he led an acquisition.
Ctrip Priced At Greater Than Perfect In An Inherently Risky Chinese Market
- Q2 earnings were disastrous and solidify the bear thesis of lack of scalability predicated by declining profitability despite strong sales growth.
- Given the recent extreme margin declines exposed in the Q2 report, the stock should be re-rated lower as growth comes at a very high cost and is unsustainable.
- Recent deal with Priceline was initially received very well by the market and took the stock to new highs, but the inability to hold the gains signals a top.
Key Operating Metrics Indicate That The Marin Software Sell-Off Is Incredibly Unwarranted
- Marin reports record Q2 revenues beating on the top and bottom lines and adding a near record number of new customers for the quarter.
- Despite a $1.5M full-year revenue guide down, all operating metrics have improved considerably including a YOY gross margin increase to 66% from 61%.
- The small guide down is an isolated event caused by a key staffing change and acquisition integration which allows investors the opportunity to buy in at historic lows.
ITT Educational Services Can Be Bought At Fire Sale Prices Due To Incredibly Overstated Fears
- ITT Educational Services stock finishes down over 46% on Monday.
- The drop is caused by an August 1 filing that indicated that a $119M property leaseback deal has been cancelled.
- ITT rejected an extension of the due diligence period in order to entertain other potential buyers.
- The market treated the news by subtracting $155M off of ITT's valuation, essentially saying that the property it owns is now worth less than zero from $119M on Friday.
Facebook Has Become The Ultimate Fanboy Stock
- Suddenly nearly everybody is bullish at historic highs. Where were they at the post-IPO lows?
- Facebook is priced for beyond perfection at 94 times earnings and 24 times sales.
- Original VC Peter Thiel cashes out his remaining 494,950 shares on July 29, signaling a smart money top.
Short Cheniere Energy After This Meteoric 3000% 4-Year Run
- Cheniere Energy is trading at record highs following a multi-year run based on optimistic future expectations.
- Investment in the company is simply a highly leveraged and dangerous arbitrage bet on natural gas prices that can easily go the other way.
- Even if the bet works out and everything goes exactly as planned by the company, the valuation still isn't anywhere close to justified.
Buy Jive Software At Historic Low Prices
- Jive Software hit new lows on Friday following a poorly received Q2 earnings report. The stock traded to new historic lows.
- Credible sources maintain that Jive is for sale. The new partnership with Cisco is said to be a potential catalyst toward an acquisition.
- Recent heavy insider buying coupled with large new hedge fund stakes indicates that the smart money is making a big bet on the potential upside.
- Absent of any deal, the company on its own offers a very good value proposition trading at only 2x sales ex-cash with strong revenue growth and other metrics improving.
Update: Skullcandy Q2 Earnings Exceed Expectations And Turnaround Is Now Amplified
- Skullcandy reported Q2 earnings of $0.06 EPS, which significantly exceeded consensus. All other relevant metrics improved along with FY2014 EPS guidance.
- I am updating my outlook on Skullcandy to confirm that the turnaround is indeed on track and my new 2014 price target is $9.
- This EPS beat and FY2014 guidance raise was anticipated as I took a long position in Skullcandy right before the close, as evidenced by my Twitter posting.
Update: RealNetworks' Q2 Results Are As Bad As I Expected
- Reports Q2 revenues of $40.8M compared to $49.9M in the same period last year. Net loss accelerated to $21M in the quarter compared to $18.5M in Q2 2013.
- This confirms my short thesis from July 21 as losses and sales declines not only continue by they are increasing rapidly with no end in sight.
- Cash burn looks to be an around $60M in 2014 as I anticipated, in line with my projections of running out of cash in the next 3 years.
RealNetworks: A Value Trap With Significant Downside Risk Over The Next 2 Years
- Trades at about 70% of market cap in cash, but every core business segment is experiencing declining growth and significant recurring losses.
- RealNetworks owns 45% of music service Rhapsody, which is growing rapidly but is seriously troubled and it is not certain if it will ever be profitable.
- Company future is heavily dependent on new RealPlayer Cloud offering which has yet to be monetized and may not have a viable market as a paid platform.
Update: TubeMogul IPO Price Reduction Changes Short Thesis
- TubeMogul reduces IPO target to $57.5M from $94M and cuts target price range to $7-$8 from the original anticipated range of $11-$13.
- A short on TubeMogul stock is only recommended at the original $11-$13 range.
- An undersubscribed offering was anticipated due to extremely lofty original valuation, so this is not surprising.
TubeMogul IPO Creates Huge Valuation Gap With YuMe And Sets Up Compelling Pair Trade
- TubeMogul files an updated S-1 with a $372M valuation that implies a $13 IPO price.
- YuMe trades at a $192M valuation as of July 10, down 33% from its $9 IPO price.
- In an increasingly multi-screen and global market, TubeMogul is a desktop-only web-based platform.
- YuMe reported 2013 sales of $151M. TubeMogul reported only $57M for the same period.
- TubeMogul has lost $11M since 2012 compared to a net profit of $6.5M for YuMe.
Circumstances At YuMe Signal An Imminent Takeover And 200% Potential Upside
- Amidst a rapidly consolidating ad tech market, YuMe files an amended Annual Report on June 23 that contains "change in control" provisions regarding YuMe named executives' compensation.
- Two of the named executives are YuMe Co-Founders CEO Jayant Kadambi and CTO Ayyappan Sankaran who founded and sold StarNet to Netopia in 1999, which was later sold to Motorola.
- YuMe management has meeting with underwriter Deutsche Bank in New York, but not with company analyst.
- Recent CFO departure mirrors another ad tech acquisition that has close connection to YuMe.
- Following his firm's distribution of YuMe shares to the partners, Vinod Khosla locks just under 7% of the company away in trusts.
Higher One Offers Speculative Buy Opportunity At Historic Lows
- Higher One might be the most hated company on Wall Street.
- Current share price implies a worst of the worst-case scenario.
- Cole Taylor Bank order not as bad as expected and provides hope.
RadioShack Is Not As Bad As Everybody Thinks
- Recent analyst price target of $0 signals extreme pessimism.
- A worst-case scenario is already mostly baked into the share price.
- Stock trades at book value with no goodwill or intangibles.
- Realistic potential for 1000% or higher share price appreciation.
- Unique partnerships signal potential future growth opportunity.
YuMe Q1 Is Bullish And CFO Departure Is A Non-Event
- YuMe beats on Q1 revenue at $37.3M vs. estimates of $35.36.
- Company reaffirms FY2014 revenue guidance of $190M-$200M and EBITDA guidance of $2M-$8M.
- Situational CFO Tim Laehy stepping down to pursue an early-stage growth opportunity.
- Customer metrics compared to same period last year are significantly enhanced, including Q1 ARPU.
- Cash and cash equivalents position of $58.7M is strengthened and close to $2 per share.
Solid Tremor Video Q1 Reveals A Tremendous Investment Opportunity
- Q1 revenue up 41% YOY as it comes in at $34.9M vs. EST $29.38M.
- Company increases FY2014 revenue guidance to a $158M to $163M range.
- Margin deterioration caused by demographic pricing has finally bottomed.
- New SSP solution for publishers being launched later in the year and not factored in guidance.
- Gain in mobile as a percentage of revenue and other key sales metrics provide a bright light.
Skullcandy Q1 Report Proves The Core Brand Growth Story Is Dead
- Skullcandy loses less than expected in Q1 but misses on revenues.
- Company increases EPS guidance for the year by $0.06, sparking a rally.
- Deteriorating US sales picture offset by temporary margin expansion.
- Piper Jaffray analyst reiterates Underweight rating on the stock.
- Financial engineering is the real cause of the higher margins, not performance.
YuMe Is A Buy Ahead Of Earnings
- 2014 US elections provide significant revenue catalyst, similar to the 2012 election boon.
- YuMe is the market leader in Smart TV advertising monetization and technology.
- CFO Tim Leahy has a proven history of acquisitions at companies that he is involved with.
- Needham recently reiterated a "Buy" and $13 PT, implying nearly a 100% upside.
Tremor Video Is A Buy Ahead Of Earnings
- Tremor Video's highly anticipated Q1 earnings are to be announced on May 6.
- Analyst sales estimates at very low end of recently provided guidance range.
- Monthly comScore network performance data for Q1 significantly exceeds expectations.
- Craig Hodges, prominent hedge fund manager, discloses a passive stake of 5.1% of TRMR.
- Company officially launches the first ever all-screen programmatic video advertising solution.
Skullcandy Core Brand Strength Is An Illusion
- Astro Gaming is the lone hotspot and its continued growth proves that the core business is dead.
- Misguided focus on niche women's line that features confusing marketing messages.
- Turnaround story predicated on technological advances, but none have been realized.
- Piper Jaffray research shows that the brand is experiencing significant erosion among the vital teen market.
- Continued decline in digital as evidenced by lower Google search volume and website traffic.
Tremor Video Bull Case Strengthened Following Review Of First Annual Report
- Tremor released their first 10-K annual report on Friday to investors.
- Nearly 100% YOY growth in small but high-margin analytics licensing business.
- Fear of heavy client concentration in a few key accounts is outright dismissed.
- Aggressive expansion of patent portfolio consisting of proprietary advertising technologies.
Author Update On MCig And Turn Your Cash Into Vapor
- The author updates readers on his views on mCig.
Tremor Video Is A Strong Buy At A Big Discount To IPO Price
- Company in midst of epic transformation to programmatic advertising solution, which will drive future margin expansion and revenues.
- After a recent IPO at $10, Tremor has an impeccable balance sheet with nearly $2 per share cash, no debt and positive net operating cash flow in 2013.
- High growth story in booming niche industry with analyst projections of a 25% increase in sales from 2014-2015 driven by exclusive publisher deals.
- Multiple accounts of insider buying and zero instances of selling since August 2013 IPO which is very unusual for an IPO.
- Likely takeover target due to proprietary software and patents and same CEO and CFO combination that found and sold About.com to Primedia.
Vape Holdings: Hot Marijuana Stock With A Ridiculous $235 Million Market Valuation
- Incredible amount of optimism towards a company with virtually no sales or assets.
- Plans to compete in highly competitive industry with no evidence that it could succeed.
- Valuation implies a better than "best case scenario" prior to actual execution of the business plan.
- Hive Ceramics was recently bought from the VAPE CEO in a deal that strips all voting rights away from shareholders.
- CFO Jerome Kaiser mysteriously resigns in midst of massive run-up in the stock.
Skullcandy Turnaround Not Likely
- Small beat on revenue likely driven by Q4 channel stuffing, evidence is on Amazon.com.
- Founder and recent interim CEO Rick Alden sells nearly $14 million in stock last week.
- Online popularity for the brand continues to trend down, according to Google Trends and Alexa.
- Margins are down due to increased product return rates which are on the rise.
Millennial Media Is About To Fly Higher
- The epic shift to mobile that we are witnessing is one of the strongest technological trends of the past century, and Millennial Media is a leader in rapidly growing mobile advertising.
- Millennial has a strong cash position of over $100 million, with zero debt, and analysts expect the company to be profitable and cash flow positive in 2015.
- Strong executive team is in place, led by new CEO Michael Barrett, former CRO at Yahoo; Mollie Spilman, who was CMO at Yahoo; and CFO Michael Avon, venture capitalist.
YuMe Is Misunderstood And Has Significant Upside Potential
- YuMe is profitable and trades at near book value levels with 30% YOY sales growth.
- Investors clearly do not understand the ad tech space, in particular YuMe's niche business model.
- YuMe is at the forefront of innovation with heavy recent insider buying and conservative guidance.
- After An Epic Run, Skullcandy Is A Sell Ahead Of Earnings
- Skullcandy: 2 Conclusions And A Shocking Buyout Theory
- Compelling Opportunity To Buy Into Skullcandy Turnaround