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Charles Moscoe

 
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  • Sizmek Q3 Report Illustrates A Deep Value Opportunity With Long-Term Visibility
       • Sat, Nov. 15 SZMK 5 Comments

    Summary

    • FY2014 EBITDA guidance is virtually unchanged at $21M-$23M vs. earlier $21M-26M guidance which demonstrates greater-than-expected operating efficiency off a lower but still growing revenue base.
    • The decline in the legacy-rich media business is overshadowed by rapid 30% quarterly growth in the core business that exceeded expectations and provides clear long-term visibility.
    • $15M share repurchase program to commence early next week along with a potential new authorized share buy back that is currently in active discussion with the board and management.
    • Recent sale of Sapient to Publicis for an overall comparable ad tech business was at a multiple 5x richer than Sizmek's current valuation, leaving room for significant upside.
    • New 8-K filing allows for third-party director compensation. This almost always precedes significant shareholder activism as the board members can be tied to short-term share price gains.
  • Sizmek: The Profitable Ad Tech Company That Nobody Is Talking About
       • Wed, Oct. 8 SZMK 124 Comments

    Summary

    • 65% gross margin tech revenue with no media risk make for a compelling business model.
    • Increased sales and operating leverage reflected in rapidly expanding EBITDA margins.
    • Fascinating backstory with major shareholder all but guarantees positive long-term outcome.
    • Uniquely positioned with access to an unprecedented amount of the most valuable data.
    • The only true full stack independent competitor to Google's Doubleclick ad management platform.
  • Brightcove Is A Pure Play On The Rapid Secular Growth Of Online Video
    Wed, Sep. 24 BCOV 25 Comments

    Summary

    • After lowering revenue guidance due to customer loss, BCOV fell 50% and trades at a now cheap 1.4x EV/sales with Q2 margins over 66% and steadily rising.
    • BCOV loses customer Rovio, which was a high volume but low margin non-premium user of BCOV content delivery services. Not a long-term fundamental negative for the business.
    • Attractive acquisition target as a fully integrated SaaS offering without its own low margin CDN. For instance, Amazon's AWS could purchase BCOV as a bolt-on suite to compete with Akamai.
    • BCOV is the strategic leader in the fast growing online video platform market. Technologically inferior competitor Ooyala was recently bought for 5x sales by Telstra.
  • ReachLocal Is A Compelling Turnaround Story In The Works
    Mon, Sep. 8 RLOC 62 Comments

    Summary

    • New CEO Sharon Rowlands has a proven history of execution and delivering results, particularly in sales driven organizations like ReachLocal. She also recently bought $500,000 worth of shares.
    • Trades at about 0.25x sales ex-cash with no debt and long-term profitability projected to occur by the back half of 2015 according to the new CEO's turnaround plan.
    • The new ReachEdge product and SaaS marketing suite have been well received by SMB clients and is on the forefront of web development technology for small and medium businesses.
  • Independent Ad Tech Opportunities With Extremely Negative Market Sentiment
    Mon, Aug. 18 MM, MRIN, TRMR 17 Comments

    Summary

    • 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
       • Tue, Aug. 12 VCRA 9 Comments

    Summary

    • 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
    Mon, Aug. 11 CTRP 14 Comments

    Summary

    • 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
    Fri, Aug. 8 MRIN 6 Comments

    Summary

    • 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
    Tue, Aug. 5 ESI 51 Comments

    Summary

    • 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
    Mon, Aug. 4 FB 141 Comments

    Summary

    • 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
    Mon, Aug. 4 LNG 73 Comments

    Summary

    • 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
    Mon, Aug. 4 JIVE 8 Comments

    Summary

    • 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
    Fri, Aug. 1 SKUL 5 Comments

    Summary

    • 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
    Thu, Jul. 31 RNWK 5 Comments

    Summary

    • 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
    Sat, Jul. 19 RNWK 24 Comments

    Summary

    • 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
    Thu, Jul. 17 TUBE 21 Comments

    Summary

    • 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
    Fri, Jul. 11 TUBE, YUME 58 Comments

    Summary

    • 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
    Editors' Pick • Mon, Jul. 7 YUME 13 Comments

    Summary

    • 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
    Thu, Jul. 3 ONE 30 Comments

    Summary

    • 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
    Thu, Jun. 26 RSH 247 Comments

    Summary

    • 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
    Wed, May. 14 YUME 57 Comments

    Summary

    • 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
    Wed, May. 7 TRMR 320 Comments

    Summary

    • 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
    Fri, May. 2 SKUL 66 Comments

    Summary

    • 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
    Wed, Apr. 23 YUME 22 Comments

    Summary

    • 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
    Tue, Apr. 22 TRMR 55 Comments

    Summary

    • 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
       • Sun, Apr. 20 SKUL 41 Comments

    Summary

    • 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
    Mon, Mar. 31 TRMR 58 Comments

    Summary

    • 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
    Mon, Mar. 24 MCIG 112 Comments

    Summary

    • The author updates readers on his views on mCig.
  • Tremor Video Is A Strong Buy At A Big Discount To IPO Price
    Fri, Mar. 21 TRMR 12 Comments

    Summary

    • 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
    Wed, Mar. 19 VAPE 224 Comments

    Summary

    • 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
    Mon, Mar. 17 SKUL 60 Comments

    Summary

    • 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
    Fri, Mar. 14 MM 46 Comments

    Summary

    • 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.