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Spencer Grimes

 
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  • NTELOS Investors Are Leaping To The Wrong Conclusion [View article]
    This piece completely ignores the strategic value of NTLS to Sprint (and possibly even DISH) in Virginia/West Virginia and the likelihood that NTLS will be acquired in 2014 (its 27% private equity owner doesn't have an unlimited investment horizon and the two-year standstill period relating to the business separation from LMOS expires in October 2013) .

    If the author would like to make a friendly wager that a transaction will be done at a per share price lower than the current $19, I'll take the other side.
    Jul 19 02:57 PM | 1 Like Like |Link to Comment
  • Envivio: Shares Unfairly Tossed Out After A Broken IPO? [View article]
    Agree in full that management did a poor job with investor expectations and the company's sales force was badly mismanaged in 2012 but a bit more patience is advised. New head salesman has been at the company since early February and I am optimistic that he can deliver. When this company reaches break even in another 90-120 days on a run rate of ~$50m of revenue, the stock should be worth balance sheet cash plus at least $1 per share ($27m), more likely $2 per share (which would be 1x revenue) if the outlook is for sustained profitability. The top two US cable operators are using the Envivio software to positive reviews so additional and recurring orders likely.
    Jun 21 09:10 AM | Likes Like |Link to Comment
  • Marchex Proposes Spin-Off Of Non-Core Assets, Shares Remain Undervalued [View article]
    It is a real cost but the additional shares are reflected in the fully diluted share count (though I ignore any option proceeds that may accrue to the company at exercise) and keep in mind that company has retired 31 percent of its equity since 2006.
    Nov 17 08:48 AM | Likes Like |Link to Comment
  • Marchex Proposes Spin-Off Of Non-Core Assets, Shares Remain Undervalued [View article]
    Equity compensation and dual class structures are an unfortunate fact of investing life, especially with technology companies, but I don't think it's excessive.
    Nov 16 11:29 AM | Likes Like |Link to Comment
  • Envivio: Shares Unfairly Tossed Out After A Broken IPO? [View article]
    Wow. $63m of cash selling for $51m.
    Nov 7 04:13 PM | Likes Like |Link to Comment
  • Envivio: Shares Unfairly Tossed Out After A Broken IPO? [View article]
    At $2.50, the market is valuing the company at just less than the $70m of cash that I expect them to have on the balance sheet at 7/31. So if you believe their (diminished) business and patents have any value at all and that they can get to break even soon...
    Aug 22 02:24 PM | Likes Like |Link to Comment
  • Envivio: Shares Unfairly Tossed Out After A Broken IPO? [View article]
    Agree that management is now discredited (not sure about dishonest) and it is probably somewhat attributable to inexperience dealing with public investors. I blame the board, which is heavily loaded with pre-IPO VC investors, for not keeping a more watchful eye on management pronouncements to the market, especially in the first few quarters as a public company. As for more color on the revenue miss, I think it is attributable to longer sales cycles in an emerging space and in a difficult economy. I also think that there may be too many players in this multi-screen space and some consolidation is needed.
    Aug 15 11:58 AM | Likes Like |Link to Comment
  • Envivio: Shares Unfairly Tossed Out After A Broken IPO? [View article]
    Yes, I've been wrong, this revenue miss hurts and it reflects very badly on management to miss by such a wide margin. But I'm a big believer in TV Everywhere and the companies enabling it. I think it's too early to conclude that ENVI won't be one of the core suppliers to the pay TV providers - in fact, I think they will be. As for lessons, new industries are difficult to analyze and invest in (see social media, Internet gaming, online daily deals and TV Everywhere infrastructure). If the stock trades today where I saw it after hours, it will have a valuation, net of cash, of around $25m, ridiculously cheap for a company that most people had generating $14m-$15m of operating cash flow in 2013. Management's credibility is severely damaged and that estimate is likely no longer intact so the conference call in early September will be important -- if anyone cares anymore.
    Aug 14 09:20 AM | Likes Like |Link to Comment
  • Envivio: Shares Unfairly Tossed Out After A Broken IPO? [View article]
    Sorry Envinot...I misspoke. You are correct that ENVI was unprofitable in the quarter ended 4/30/12, with an adjusted EBITDA loss of $1.5m. This was, I believe, fully attributable to expenses associated with the IPO and seasonality (its Q1 is the lightest of the year). I do not anticipate another unprofitable quarter going forward and am sticking with my conservative $7m cash flow estimate for the year ended 1/30/13 and a double in the following year. If management can deliver on that $14m number, this is a cheap stock at 8x cash flow for the year ended 1/30/14.

    BTW, you are also correct that this company has been around a long time without doing much but I'd say that they've done what entrepreneurial companies do - pivot and adjust products and strategies based on where the market is going. Only recently has the market for multi-screen video begun to blossom as consumers consume video on second and third screens. This is ENVI's sweet spot so the company needs to deliver.
    Jun 25 09:54 AM | Likes Like |Link to Comment
  • Envivio: Shares Unfairly Tossed Out After A Broken IPO? [View article]
    Disagree. The multi-screen video market is not niche - it's booming - and ENVI's addressable universe is expected to be about $3 billion by 2014. Sure, there is competition but ENVI has clearly done something right to attract 300+ customers to date. And the company is profitable on a cash basis.
    Jun 24 01:16 PM | Likes Like |Link to Comment
  • Bottom Fishing In Crashed IPOs [View article]
    Stanley,

    Thanks for the plug for my piece on ENVI. ENVI actually has $75m or a bit less than $3 per share on the balance sheet, about 30% of its market cap of $220 million. I think your forgivable mistake is that you are using a pre-IPO share count, not the actual 29 million.
    Jun 7 03:42 PM | 2 Likes Like |Link to Comment
  • Envivio: Shares Unfairly Tossed Out After A Broken IPO? [View article]
    Agree. The numbers were about where I expected, including balance sheet cash ($75m) and shares outstanding (29m). Still think $7m is a good EBITDA number for fiscal 2013 ending January $14m for next year. Upside potential for fiscal 2014. I think investors will eventually conclude that they have to be in this IP video encoding space and if investors don't figure it out, Cisco or Ericsson or Adobe will do it for us and consolidate innovative companies in IP video like Envivio.
    May 31 07:02 PM | Likes Like |Link to Comment
  • Apple TV Will Revolutionize Content Delivery And Advertising [View article]
    The author paints a pleasant picture for his (and AAPL's) preferred method of viewing high-quality video from "cable" networks, but he exhibits a fundamental misunderstanding of the pay television ecosystem. Barring a massive regulatory overhaul of the industry, which is unforeseeable, cable networks are contractually prohibited from selling linear programming to over-the-top (OTT) providers by the lucrative agreements that are in place with cable and satellite providers. The author is correct that consumers will be able to customize their "channel" lineups and perhaps view live ESPN and CNN apps on their TVs, iPads and laptops that may feel a la carte, but they will be required via strict authentication to be paying customers of a bundle of programming from the cable and satellite providers that the author dreams of bypassing.
    May 23 06:17 PM | 3 Likes Like |Link to Comment
  • Envivio: Shares Unfairly Tossed Out After A Broken IPO? [View article]
    Greg,

    Wasn't aware of that regarding SYNC. If true, it seems to have been a pretty good pump and not much of a dump yet since it's still around $10 per share. That is not my intent here -- I am a long-term shareholder because the trends for viewing IP video on mobile devices is a large one. I've got both SYNC and ENVI each trading at roughly 12x calendar 2013 EBITDA but I happen to think that while SYNC is a bit more profitable, ENVI is higher up the value chain in the TV Everywhere pyramid.

    The bottom line here, in my view, is that this IP video infrastructure industry is complex and I doubt that many ENVI investors fully understand it. So when the stock badly broke its IPO price, it was easy for nervous and uninformed investors to sell. We should get more visibility on ENVI's prospects on the call next week.
    May 22 10:24 AM | Likes Like |Link to Comment
  • 3 Undervalued Stocks To Consider [View article]
    Servicing the 8% coupon on the preferred costs the company $2m/yr and the preferreds convert into 17-18m shares of common. That's why the fully diluted share count is 85+ million.
    Feb 9 08:26 AM | Likes Like |Link to Comment
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