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JWbuffett

JWbuffett
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  • Shares of Atrinsic Are Poised to Triple [View article]
    Readers should focus on "nail in the coffin" and "downloads". The nail in the coffin comment speaks for itself. Richard should ask Daniel Ek (CEO of Spotify) or Steve Jobs about the value of those licenses.

    Your "Downloads" comment suggests a fundamental lack of understanding of this space. How many songs will Pandora's 100 million users "download" today Richard?
    Jul 26, 2011. 12:57 PM | Likes Like |Link to Comment
  • Shares of Atrinsic Are Poised to Triple [View article]
    When you say "fully diluted", I think you mean if all the warrants given in the recent financing are exercised. Do you realize that the company will get over $10m in cash if this occurs? Also, if that occurs it will make the shares outstanding closer to 12 million.

    Can you give us some basis for your expectation that the company will need to issue shares that will push them to 50 million shares outstanding? At today's prices, that would be a raise of close to $180 million (38 million new shares x $5 stock price).

    Also, you say Kazaa needs $50 million to compete with Spotify. If you think Kazaa will be on par with Spotify if they raise another $50 million ($10 million of which will already be in the bank per the warrant exercises), then you must be quite bullish on Kazaa with its current $35m market cap vs. Spotify's $1 billion VC valuation.

    You said that if they don't raise $50 million, the company will be worthless. They own the domain (Kazaa.com) for the most downloaded application in the history of the world. They have over 80,000 subscribers to an active and growing service in a space that is expected by industry pundits to grow exponentially over the next 12 months. Can you do the math for us on your "worthless" analysis?
    Jul 26, 2011. 10:21 AM | Likes Like |Link to Comment
  • Shares of Atrinsic Are Poised to Triple [View article]
    If the company issues the shares available under the warrants, they will have an additional $10 million + and may not need additional financing. They have numerous assets that could be sold that could put another $10m or so on the balance sheet (Shopit.com, Atrinsic Interactive business, casual gaming business, ringtones.com) . They have also carved out a very lean cost structure that allows them to focus cash resources on subscriber acquisition in addition to hiring an executive who, (regardless how motivated you think he might be due to his past successes) is one of the most creative persons in the music industry in terms of doing "win-win" marketing deals with third parties that require little if any capital.
    Jul 25, 2011. 11:40 AM | Likes Like |Link to Comment
  • Shares of Atrinsic Are Poised to Triple [View article]
    " Personally, I'd expect ATRN to have at least 50 million fully diluted shares outstanding after taking into account the financing they will need and the way these deals are structured for companies like ATRN."

    You really should have done a little more due diligence before recommending that your clients short ATRN. There are only a little over 6 million shares outstanding currently.

    "Heck they basically just doubled the shares (on a dilutive basis) on this last financing round, which only raised $5.8 million."

    Under certain circumstances, the shares outstanding could be doubled under the terms of the deal, but if that happens the company will bring in significantly more than $5.8 million, possibly as much as 3x that amount.

    "Personally, I'd expect ATRN to have at least 50 million fully diluted shares outstanding"

    Fuzzy math pal. You really think this company with 6 million shares outstanding is going to do financings that will cause them to issue another 44 million shares? No wonder you sold it short. I think you missed a decimal in there somewhere.
    Jul 25, 2011. 02:38 AM | Likes Like |Link to Comment
  • Shares of Atrinsic Are Poised to Triple [View article]
    Your commentary here suggests your clients may have a significant part of that 560K short position. That is going to be painful. As to your points -

    1) You pointed out the relevancy of your point #1 with your point #3.

    2) Your point is accurate, they will need to spend more than $3 million per quarter to compete for new subs. That will probably turn out to be true for every company in the streaming music business. This "salient fact" was probably not discussed because the author likely presumed readers of Seeking Alpha are aware of the basic fundamentals of businesses they invest in.

    3) The $5 million is only part of the deal, did you read the terms of the financing that you are calling "not particularly attractive"? The exercise price of the convert was 20% higher than the market when it was offered. Also, the company has the ability to put shares to the convert holders if the stock trades higher than a level it achieved just a few weeks before the offering and the financing could reach as high as $16 million.
    Jul 25, 2011. 02:25 AM | 1 Like Like |Link to Comment
  • Vertro: A Potential 10-Bagger [View article]
    www.groovevc.com is where the Vertro movement was founded
    Oct 28, 2010. 03:34 PM | Likes Like |Link to Comment
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