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Rocket Fuel (FUEL)

  • Tue, May 12, 10:34 AM
    • Though the Nasdaq is down 0.9%, Yahoo (YHOO +1%) is higher following news Verizon is acquiring AOL (i.e. the company Starboard Value dreamed about merging with Yahoo) for $4.4B. Demand-side/programmatic ad tech platform owner Rocket Fuel (FUEL +3.4%), which competes with AOL's ad tech ops, is also up.
    • Citi's Mark May: "We view this deal as a positive for YHOO as it shows there are strategic buyers for this type of asset and because we view YHOO as a strong asset that is currently only valued at 1x our 2016 EBITDA estimate." With Yahoo spinning off its Alibaba stake later this year and exploring options for its Yahoo Japan stake, core Yahoo might soon be available by itself.
    • Last week, Rocket Fuel received an unsolicited $350M buyout offer from rival Gravity4 (and jumped in response). However, questions remains about Gravity4's ability to finance the bid, which has been viewed by many as a publicity stunt.
  • Fri, May 8, 9:27 AM
    • Rocket Fuel (NASDAQ:FUEL) has received an "unsolicited, conditional" buyout offer from fellow demand-side online ad platform Gravity4 for $350M in cash - a 9% premium to Thursday's close.
    • Rocket Fuel, which posted Q1 results last night, says its board "will evaluate the proposal," but also launches a defense of the company's market position. "Rocket Fuel has established itself as a leader in programmatic marketing technology by using artificial intelligence ... Rocket Fuel is executing against its business imperatives to improve operating efficiency, deepen agency relationships and expand its enterprise relationships..."
    • Gravity4, founded only last year, has already acquired a string of ad tech companies. The firm is led by Gurbaksh Chalal, formerly the CEO of fellow ad tech firm RadiumOne (he was fired after pleading guilty to a domestic violence charge). Chalal has also made a (rejected) offer to buy RadiumOne.
    • Rocket Fuel has risen to $8.47 premarket. The company's Q1 results were roughly in-line with the guidance provided in its April 22 pre-announcement. Q2 guidance is for non-GAAP revenue of $66M-$69M and adjusted EBITDA of -$2M to -$4M. The GAAP revenue consensus (doesn't back out ad impression purchase costs) is for revenue of $124.1M.
  • Fri, May 8, 9:16 AM
  • Wed, Apr. 22, 7:33 PM
    • As part of a major restructuring, Rocket Fuel (NASDAQ:FUEL) is laying off 129 workers, or 11% of its workforce. The company expects $2.6M in cash costs, and possibly another $2.6M in non-cash charges. (8-K filing)
    • The restructuring is expected to lower annual costs by $30M/year, and help the programmatic/demand-side ad platform owner achieve positive 2015 adjusted EBITDA.
    • Rocket Fuel also announces it expects Q1 GAAP revenue of $104.3M, +40% Y/Y (aided by the [x + 1] acquisition) but below a consensus of $106.5M. However, non-GAAP revenue (backs out revenue-sharing) is expected to total $58.8M, above guidance of $57M-$58M, and adjusted EBITDA -$13.6M, above guidance of -$18M to -$19M. Net loss is expected to total $36.9M.
    • The news comes less than a month after CEO George John announced he's stepping down. Full Q1 results are due on May 7.
    • Rocket Fuel's beaten-down shares have risen to $9.35 AH.
  • Mon, Mar. 23, 6:04 PM
    • Though Rocket Fuel's (NASDAQ:FUEL) recent numbers show the company has plenty of challenges to resolve, management has "done an excellent job in taking concrete actions to both fix problems and take advantage of opportunities," asserts SA author Maltsman Finance.
    • Citing recent Glassdoor reviews, Maltsman believes management has struggled to manage Rocket Fuel's rapid growth. However, the author also thinks new hires such as CFO Dave Sankaran, chief revenue officer Randy Wootton, and HR chief Jennifer Trzepacz will help right the ship.
    • Strong international growth (+120% Y/Y in 2014) is seen as a catalyst, as are mobile/social/video ad sales (now 44% of revenue). Meanwhile, the author expects the creation of an ad agency relations team and other moves to help deal with growing agency interest in doing ad buys in-house (previous). He also notes Rocket Fuel's P/S ratio is now only around 1.
    • Shares rose 3.5% in regular trading to $10.04. They remain down 32% from where they traded before Rocket Fuel's Feb. 19 Q4 report.
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  • Tue, Mar. 17, 1:24 PM
    • Rocket Fuel (NASDAQ:FUEL) is rallying on a quiet day for tech. The company filed its 2014 10-K after the close yesterday afternoon.
    • Shares remain down 33% from where they traded before the programmatic ad tech play posted a Q4 revenue miss and offered soft Q1 guidance on Feb. 19.
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  • Mon, Feb. 23, 3:04 PM
    • Today's notable tech gainers include video processor supplier Ambarella (AMBA +5.1%), online retailer Overstock (OSTK +6.5%), Web toolbar/mobile ad services firm Perion (PERI +4.3%), data center switch vendor Arista (ANET +3.2%), and cloud contact center software provider InContact (SAAS +3.9%).
    • Notable decliners include supercomputer maker Cray (CRAY -7.2%), 3D printer maker ExOne (XONE -4.5%), Chinese mobile game publisher Sky-mobi (MOBI -6.6%), demand-side online ad platform Rocket Fuel (FUEL -7.9%), auto site TrueCar (TRUE -4.3%), online flash sales provider Zulily (ZU -4.2%), online health insurance agency eHealth (EHTH -9.7%), and data center services provider Datalink (DTLK -4.9%). The Nasdaq is close to breakeven.
    • Arista is adding to Friday's post-earnings gains, which were aided by upbeat analyst commentary. Rocket Fuel and TrueCar are adding to Friday's post-earnings losses (I, II) - TrueCar released February sales estimate data today for a number of automakers.
    • Previously covered: Cybersecurity stocks, Digital Ally, TowerJazz,, Russian tech/telecom stocks, TubeMogul, RGS Energy, Computer Sciences
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  • Fri, Feb. 20, 1:46 PM
    • Needham, Oppenheimer, and Piper have downgraded Rocket Fuel (FUEL -25.8%) to Neutral ratings after the company provided soft Q1 guidance to go with mixed Q4 results.
    • Needham's Kerry Rice believes ad agency holding companies are now "allocating larger portions of advertisers' spending to their own trading desks instead of outside [demand-side platforms] such as Rocket Fuel," and expects the trend to continue.
    • Rice also thinks Rocket Fuel's focus on selling an integrated demand-side/data management platform (made possible by the [x + 1] acquisition) "shifts resources from driving Media revenue," and "slows the ramp of license and related media revenue," given the length of enterprise software sales cycles.
    • On the CC (transcript), CEO George John admitted "agency holding companies are putting increased pressure on client focus media teams to use their house brands trading desk," and notes Rocket Fuel has created  an agency relations team to deal with the challenge. CFO David Sankaram added Rocket Fuel has "increasingly shifted our sales resources toward selling to direct advertisers."
    • Goldman's Deb Schwartz asked management what it's doing to address industry ad quality concerns (mentioned by the company as an issue back in August). John insisted the situation has improved in recent months. "[I] don't see that as a key new issue anymore, sort of one more among the many digital marketers trying to keep an eye on."
    • Janney's Murali Sankar is still a believer in the company: He sees improved relationships with execs at ad trading firms providing a lift.
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  • Fri, Feb. 20, 12:45 PM
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  • Fri, Feb. 20, 9:16 AM
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  • Thu, Feb. 19, 5:39 PM
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  • Thu, Feb. 19, 4:35 PM
    • On top of missing Q4 estimates, Rocket Fuel (NASDAQ:FUEL) is guiding for Q1 non-GAAP revenue of $57M-$58M.  Assuming a ratio between GAAP and non-GAAP revenue similar to Q4's, Q1 GAAP revenue will be around $104M-$105M, below a $126.5M consensus. Adjusted EBITDA is expected to be in a range of -$18M to -$19M.
    • Astonishingly, the programmatic ad-buying/retargeting platform only attributes the guidance to "a typical seasonal decline in activity." It declines to provide full-year guidance due to "the limited visibility inherent in our rapidly growing and changing industry."
    • Active customer count rose to 1,636 in Q4 from 1,446 in Q3 and 1,224 a year ago. GAAP costs/expenses rose 80% Y/Y to $156.8M (compares with 63% revenue growth).
    • Shares have plunged to $11.68 AH (a new post-IPO low).
    • Q4 results, PR
  • Dec. 17, 2014, 10:17 AM
    • Janney has launched coverage on Rocket Fuel (NASDAQ:FUEL) with a Buy rating and $22.50 target.
    • Janney's stance contrasts with Maxim's - the latter launched coverage at Sell on Dec. 5. With shares down 74% YTD and revenue respectively expected to rise 73% and  51% in 2014 and 2015, the programmatic ad tech platform owner has seen considerable multiple compression.
    • Likely aiding today's gains: 4.4M shares (18% of the float) were shorted as of Nov. 28.
  • Dec. 15, 2014, 9:57 AM
    • Dave Sankaran, whose resume includes stints as the CFO of three software firms (and the CEO of one), is Rocket Fuel's (FUEL +2%) new CFO.
    • Sankaran's appointment comes three months after Rocket Fuel announced CFO Peter Bardwick is stepping down. Shares are outperforming amid a market rally.
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  • Dec. 9, 2014, 1:25 PM
    • Mobile ad network owner Millennial Media (MM +8.4%), programmatic ad-buying platform Rocket Fuel (FUEL +5.3%), and video ad tech platforms Tremor Video (TRMR +6.4%) and TubeMogul (TUBE +8.5%) are among the day's standouts.
    • The Rubicon Project (RUBI +1.9%), Criteo (CRTO +2.1%), and Sizmek (SZMK +2%) are up more moderately, but still outperforming. The Nasdaq is up 0.1%.
    • With the exceptions of TubeMogul and Criteo, the group has had a rough year. Yesterday, Strategy Analytics published an analysis of the online media ops of 44 publicly-traded companies (inc. giants such as Google, Facebook, and Amazon) in which its estimated the companies' online ad sales collectively rose 24% Y/Y in 1H14.
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  • Dec. 5, 2014, 4:15 PM
    • On a day the Nasdaq closed up 0.2%, Rocket Fuel (NASDAQ:FUEL) fell 6.2% to $15.11, leaving it close to a post-IPO low of $14.29. Maxim Group launched coverage at Sell today.
    • Shares -77% YTD. They soared last month in response to a Q3 beat and healthy guidance, but soon gave back their gains. The programmatic online ad-buying platform now trades for less than 1x 2015E sales.
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Company Description
Rocket Fuel Inc is a technology company that has developed an Artificial Intelligence and Big Data-driven predictive modeling and automated decision-making platform.
Sector: Technology
Country: United States