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  • Millennial Media: Is There An Easy Way Out For This Struggling Company? [View article]
    Derek,
    Nexage only has $60M in MANAGED revenues. If you count revenues this way then you would say that Marin Software for instance would have $6B in revenues and obviously that isn't the case. Nexage really has about $6M in revenues. I'm not clear how Millennial can count managed revenues for Nexage when all of the other similar companies in the industry count the lower number in accordance with GAAP. So if this is the case and Millennial counts only $6M in revenue this acquisition becomes highly dilutive. Suddenly you have a company with a $300M market cap that will be trading at 1x sales with sub-40% margins. Doesn't look so attractive given the multitude of other opportunities in the space with better stories.
    Oct 8 11:44 PM | Likes Like |Link to Comment
  • Sizmek: The Profitable Ad Tech Company That Nobody Is Talking About [View article]
    Based on my calculations and factoring in the $3 dividend on the sale of Extreme Reach, Meruelo is pretty close to break even right now on his investment in DG which began with open market buying in 2012 which has now become Sizmek on his 13% stake in the company. He was up as much as 100% in March. Nothing has changed since. I suspect he will become quite disruptive soon. He was up like $30M in March.
    Oct 8 07:37 PM | Likes Like |Link to Comment
  • Sizmek: The Profitable Ad Tech Company That Nobody Is Talking About [View article]
    Crazy how a block of 10k shares took this down almost 5% earlier in the day. Almost no liquidity here and it got marched up with small buys the rest of the day that made up most of the daily volume. Looks very easy to manipulate and accumulate cheap in the open market for anybody enterprising enough to do so. I suspect that this is what is happen. Given the strong cash flow it becomes very attractive to private equity at these levels. I'm likely going to add tomorrow and make this my top holding. While it seems brutal at a cursory glance, it looks like a really good bet right now.
    Oct 8 04:36 PM | Likes Like |Link to Comment
  • Sizmek: The Profitable Ad Tech Company That Nobody Is Talking About [View article]
    Thanks for that note. That explains it. I do thank the IR department for being so incompetent however as it is the only reason that I have been able to buy SZMK shares in the $7s as I've been eyeing it since double digits. I made alot of money with DGIT, albeit quite painfully at some points, and plan to do it again here. I think the combination of the huge amount of cash, modest buybacks, Meruelo control and strong cash flow put a floor in this stock that maybe some of the other independent ad techs do not have. That is my bull thesis in a nutshell here.
    Oct 8 12:01 PM | Likes Like |Link to Comment
  • Sizmek: The Profitable Ad Tech Company That Nobody Is Talking About [View article]
    If you count the current assets - the money owned by Israel tax department and from DG to still be collected both this quarter - Sizmek has almost $110M in cash. There is $15M earmarked for a buyback this quarter. Also I noticed that the net receivables (AR - AP) are about $25M last quarter. So for a company trading at what its at thats a very very strong balance sheet considering no debt and net positive obligations. As you mentioned Msg212, cash flows should continue to improve as operating margins expand. Situations like this don't last indefinitely. Something has to give. I like your idea of a massive buyback of up to half the outstanding shares.
    Oct 8 11:44 AM | Likes Like |Link to Comment
  • Sizmek: The Profitable Ad Tech Company That Nobody Is Talking About [View article]
    You probably have more experience with executive placements than I do by the sounds of it. I'm just curious as to why it would be hard to find a CFO for a public company of this nature? It seems like there would be a lineup of applicants for this job. YuME has also been searching for a CFO for several months now (Since the Q1 call). I spoke to some institutional people about that situation and the consensus was that it is bullish for the acquisition theory not having an official CFO in place and that a company would not likely bring on a CFO at great expense simply to get a deal done. I wonder why Sizmek would be a different situation? Neil did say on the call that the search will likely be completed Q3. Maybe there is something else going on here? I just think that if a company like Sizmek with 900 employees in 48 offices is determined to find a CFO, there will be plenty of candidates. Seems like a prestigious job.
    Oct 8 11:19 AM | Likes Like |Link to Comment
  • Sizmek: The Profitable Ad Tech Company That Nobody Is Talking About [View article]
    Now I never presented a real acquisition theory here but if I did it would revolve around Meruelo and the story of how disruptive he was by basically bullying his way in to DG and using his army of lawyers (who DG ultimately paid for in a lawsuit settlement) to force the sale of the legacy TV business. Just by connecting the dots I think his end game here is to force the sale of the rest of the company (Sizmek) once he props it up first. So perhaps not an imminent acquisition theory but ultimately I can't see it not happening within a couple years.
    Oct 8 11:13 AM | Likes Like |Link to Comment
  • Sizmek: The Profitable Ad Tech Company That Nobody Is Talking About [View article]
    "Also, SZMK's IR department is a disgrace and should be replaced ASAP."

    Hard to argue with that. I was looking for the Cannaccord conference that Sizmek supposedly presented in August. In fact they sent a PR stating that they are presenting at 8am on August 13. Couldn't find the webcast anywhere and I don't think they ultimately presented. This remains a mystery as it was their most recent planned presentation. I found webcasts of every other presenter on the WSW site but the Sizmek slot was blank. Any ideas what happened here?
    Oct 8 11:09 AM | Likes Like |Link to Comment
  • Sizmek: The Profitable Ad Tech Company That Nobody Is Talking About [View article]
    I agree with you MSG that more buybacks the better, although I would use cash rather than take on a revolver (personal opinion here). To me it looks like after Aerify that Sizmek has everything that they need and I don't think anymore acquisitions are in the cards. At least it sounded that way on the last call when Neil was asked about it. He said they will focus on building out and integrating what they have. So I think even another "tuck-in" acquisition is unlikely at this point. I think that the lack of CFO is a position as a sign to a potential acquisition being in the works because surely they would not hire a CFO if the plan was to sell the company. I'm also not sure if Ginsburg is a threat anymore. He definitely botched the Extreme Reach deal as they turned down $25 per share years ago, but right now Meruelo controls the board and the company so I think Ginsburg learned his lesson and really can't get in the way of anything. He has already lost control and he isn't getting it back so he might as well just enjoy the last part of the ride here.
    Oct 8 10:38 AM | 1 Like Like |Link to Comment
  • Sizmek: The Profitable Ad Tech Company That Nobody Is Talking About [View article]
    Thanks for reading, Stan. Overall growth for 2014 is projected to be between 12%-17%. Conversant - which was just acquired - grew at 7%. What I'm seeing right now with acquisitions are profitable companies more so than growth, unless we are talking about a point solution, which Sizmek isn't.
    Oct 8 10:32 AM | Likes Like |Link to Comment
  • Sizmek: The Profitable Ad Tech Company That Nobody Is Talking About [View article]
    They actually have closer to $4 per share in cash when you count the tax refund coming from Israel this quarter or Q1 2015 and money still left to be collected from DG. Correct, no debt. They are doing a buyback this quarter for $15M. I think they should (and will) do more. I think Meruelo (who controls the board) will push for a sale shortly if he isn't already. It is definitely the game plan just like he did to sell the legacy TV ad distribution business for $485M to Extreme Reach.
    Oct 7 11:55 PM | Likes Like |Link to Comment
  • Sizmek: The Profitable Ad Tech Company That Nobody Is Talking About [View article]
    Which of these peers expense software development costs? In my experience, expenses generally refer to operating expenses but if software is being developed those costs would be capitalized. Like the labor cost for assembling a house would be capitalized. Also I did some research on this just to be sure and if the software development adds future value it is capitalized. See this from Stanford.edu accounting:

    http://stanford.io/1BP...
    Oct 7 09:01 PM | Likes Like |Link to Comment
  • Facebook May Become Bigger Than Google AdSense [View article]
    Just an update on my comment here and the early failure of Atlas to attract publishers as I suggested would happen:

    http://bit.ly/1qbUa8e
    Oct 7 06:36 PM | Likes Like |Link to Comment
  • Sizmek: The Profitable Ad Tech Company That Nobody Is Talking About [View article]
    SZMK got a competitive boost today by reports on the early failure of Atlas to gain traction with publishers:

    http://bit.ly/1qbUa8e

    This really accentuates the unique strategic positioning of SZMK as the neutral independent open stack ad management platform.
    Oct 7 06:34 PM | Likes Like |Link to Comment
  • Sizmek: The Profitable Ad Tech Company That Nobody Is Talking About [View article]
    Again this is off the top of my head (and I could be off on this number) but the $12M in one-time costs related to the spinoff is discussed in the Q&A of that 3 hour analyst presentation which I linked to in the article. I will listen to it again shortly. Right now the tech focus at Sizmek is to integrate all of the separate parts that make up Sizmek MMX in to an SaaS self-service solution. I know that Aerify Media is being integrated this quarter, so that development would naturally be capitalized. Remember that Sizmek is composed of a number of platforms so integration (which is capitalized) is a big part of the story over the next few years. The SaaS solution should be done in 3 years, but until then I'd expect for more capitalized development relating to that. I'm going to look in to this more but this is my best answer right now on this topic based on my research up to date. Thanks for reading.
    Oct 7 06:24 PM | Likes Like |Link to Comment
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