Millennial Media - Mobile Advertising Growth And Concerns [View article]
Investors may be interested in another smaller and admittedly risky mobile company called Augme, ticker AUGT. They own a mobile ad network too, but the other half of their revenue is mobile SAAS software, which has higher margins and a higher % of repeat customers. Upcoming catalysts; uplisting to an exchange, coverage by Roth Capital, addition of some new board members, changing of name to Hipcricket, etc. Disclosure: long AUGT.
Valassis Communications - A Small Cap With Potential [View article]
Ron, well written article, but I respectfully beg to differ. When will the digital business be large enough so that it's faster growth will make up for the "melting ice-cube" nature of it's legacy business? Why is the short interest ratio at an all time high? VCI used to be a great business, but it's end market has been disrupted by the internet, IMHO. Hence the shrinking revenue base. Ask 10 25 year olds if they use paper coupons, or if they use some app on a smartphone. Also, VCI has $590 million in debt, which will become increasingly difficult to service. I am short VCI, but if they buy some more digital businesses or grow their current digital businesses they can evolve and survive.
AUGT is trading at 10x TTM revenues, a very expensive multiple. I personally don't like to see management distracted by this litigation strategy, which doesn't even have to do with mobile. LNCM has a larger revenue base, better management, smarter investors, more international exposure and a much lower multiple.
What's More Overvalued: Monster Worldwide Or LinkedIn? [View article]
A few other points to consider;
* Linkedin has another market besides job-seekers. I believe more and more salespeople use Linkedin to find "leads". Instead of cold-calling people over the phone, many salespeople will email someone on Linkedin. I spoke with an internet company salesperson yesterday who said this is very effective, granted one data point does not make a trend.
* We attended Monster's "analyst day' in NYC recently and came away with a few conclusions. Many of their new products seem to be copying Linkedin. Too little, too late? Time will tell if they can catch up. Also, management has "room for improvement".
* As more and more people use Linkedin, the "network effect" accelerates and the product becomes more useful.
The new CEO Elizabeth DeMarse is quite smart and experienced. A fresh perspective may be good for the company.
One important factor people seem to have overlooked is that TST has $55 million in preferred stock which it issued to the VC fund Technology Crossover Ventures on 11/15/ 07, when the stock price was $13.66. A partner of TCV is Chairman of TST. In the event of a liquidation/change of control, TCV would be entitled to receive their liquidation preference ($55 million) unless they elect to convert to common ($14.26/share). When calculating the enterprise value of TST, the preferred should be treated like debt and added to the market capitalization, and then cash must be subtracted.
Also, TST has approximately $120 million of NOLs, or Net Operating Losses, which can be used to offset future pre-tax income. A major off balance sheet asset.
It is unclear to me if Cramer's involvement is good or bad. If he severs ties with the company, won't that decrease the value of the company? His TV show probably drives traffic to the website. Yet I wonder if his involvement deters potential buyers. Disclosure: long TST
Yellow Media: A Good Long Term Investment if You Can Handle Some Volatility [View article]
Well written post, but I believe all yellow pages businesses will eventually be supplanted by the internet. Do a quick poll and ask 5 kids under 25 if they ever use yellow pages. I doubt they do, except to sit on when they are too short to reach the dinner table. Why would they use the yellow pages when they can just search for something on their smartphone which is in their back pocket? These businesses do have unique assets in their huge salesforce, which has relationships with small businesses. But the US yellow pages have way too much debt to service. Disclosure: Short DEXO and SPMD in the US.
Have Quepasa Bears Run Out of Ammunition? [View article]
QPSA is practically a publicly traded VC investment at this point with commensurate risk/reward. You can't value this on fundamentals or look at trailing #'s. I concede it is very speculative. It's had historical negative EBITDA and negative FCF, which most of the shorts point to. But any early stage internet business starts out with negative cash flow. QPSA has been a "re-start". It's been public for a long time (hence the negaive retained earnings) and went sideways forever. Yes, much of it's revenue is from a related party, but those deals were arranged as examples to show how successful using QPSA can be for future advertisers. It was a way of priming the pump, so to speak. Keep in mind this company is backed by two billionaires, and they didn't become rich by making bad investments. Also mgmt is very smart and experienced; John Abbott, CEO, went to Stanford and Harvard. Brian Garrett, VP biz dev, has two degrees from Stanford. Several people on the advisory board are members of the PayPal mafia, all of whom have deep internet expertise and contacts. If QPSA's business plan comes to fruition, the stock is cheap here, but it definitely looks very expensive on a TTM basis. It's a bet on latin america, social media and the mgmt team. Disclosure: long qpsa.
Apple's New Subscription Rules May Clear a Path for a Kazaa Comeback [View article]
I believe Atrinsic has also inferred they are going to be launching a video subscription service, so they don't want to JUST be in the music business. Disclosure: long atrn
Interclick: Turning the Profit Corner, Part 2 [View article]
How much of a concern is this 12/8 lawsuit by Sonal Bose against ICLK? Suit was filed one day after ICLK hit it's 52 week high and the stock is down 14% since then. And the old CEO, Mike Matthews, leaves on 1/31. One of the co-founders, Mike Katz, is becoming CEO, but he's in his late 20's and has never run a public company. Is he up to the task?
The Time Is Right to Short This Wireless Upstart [View article]
I would think long and hard before betting against Craig McCaw, the founder of CLWR, whoh has made multiple billions by forming companies at the forefront of wireless technology. Short at your own risk.
What Is Priced Into OpenTable’s Valuation? [View article]
FYI, on on 7/30 ML cut OPEN from Buy to Neutral and on 7/14 Morgan Keegan cut OPEN to "Market Peform" from "Buy". I am not suggesting an investor follow what a sell-side analyst recommends but nevertheless it is an interesting datapoint suggesting the short thesis.
Millennial Media - Mobile Advertising Growth And Concerns [View article]
10 Catalysts That Could Propel MiMedx To $9 [View article]
http://bit.ly/Xj7jPG
Valassis Communications - A Small Cap With Potential [View article]
Free Language Learning Threatens Rosetta Stone [View article]
http://read.bi/VSYcd6
4 Mobile Advertising Stocks That Can Benefit From A $12 Billion U.S. Market By 2016 [View article]
Augme Technologies Coming Of Age [View article]
What's More Overvalued: Monster Worldwide Or LinkedIn? [View article]
* Linkedin has another market besides job-seekers. I believe more and more salespeople use Linkedin to find "leads". Instead of cold-calling people over the phone, many salespeople will email someone on Linkedin. I spoke with an internet company salesperson yesterday who said this is very effective, granted one data point does not make a trend.
* We attended Monster's "analyst day' in NYC recently and came away with a few conclusions. Many of their new products seem to be copying Linkedin. Too little, too late? Time will tell if they can catch up. Also, management has "room for improvement".
* As more and more people use Linkedin, the "network effect" accelerates and the product becomes more useful.
Disclosure; Long LNKD, short MWW.
My $2 Bet On Jim Cramer [View article]
One important factor people seem to have overlooked is that TST has $55 million in preferred stock which it issued to the VC fund Technology Crossover Ventures on 11/15/ 07, when the stock price was $13.66. A partner of TCV is Chairman of TST. In the event of a liquidation/change of control, TCV would be entitled to receive their liquidation preference ($55 million) unless they elect to convert to common ($14.26/share). When calculating the enterprise value of TST, the preferred should be treated like debt and added to the market capitalization, and then cash must be subtracted.
Also, TST has approximately $120 million of NOLs, or Net Operating Losses, which can be used to offset future pre-tax income. A major off balance sheet asset.
It is unclear to me if Cramer's involvement is good or bad. If he severs ties with the company, won't that decrease the value of the company? His TV show probably drives traffic to the website. Yet I wonder if his involvement deters potential buyers. Disclosure: long TST
Local.com Shares At 65% Off: A Daily Deal You Can't Get From Groupon [View article]
Yellow Media: A Good Long Term Investment if You Can Handle Some Volatility [View article]
Have Quepasa Bears Run Out of Ammunition? [View article]
Apple's New Subscription Rules May Clear a Path for a Kazaa Comeback [View article]
Interclick: Turning the Profit Corner, Part 2 [View article]
The Time Is Right to Short This Wireless Upstart [View article]
What Is Priced Into OpenTable’s Valuation? [View article]