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  • Velti: Next Stop, $0 [View article]
    Ashraf - Your article is fodder - and even if I agreed with you, I'd have a difficult time accepting your points as anything more than fluff. The forward trajectory of the company is positive and optimistic that this will be a successful turnaround. Aside from the insightful comments made by the COO Mari Jean Baker (I've posted below) there was other information from an earnings call that one should interpret as bullish signals for $VELT in 2014 - including the firm retaining a turnaround consultant, a Senior Deloitte Partner to help navigate the strategy. Ashraf - I'd encourage you to read these comments from the earnings call once again by Mari Jean Baker - Interim Chief Operating Officer, Director and Member of Remuneration Committee: "I would like to touch on some of the key initiatives we have launched to improve operating efficiency, and importantly, drive management discipline throughout the organization. As Alex and Jeff mentioned, this a challenging period for the company. However, we have taken a hard look at our assets and have confidence that we have superior products that our management team will be executing with a new level of coordination and discipline, and that we have identified a path forward, which may not be smooth, but should get us to the right place.

    Our solutions have been the drivers for why Velti is a leader in mobile marketing, providing a unique wide range of services that are performance-based and outcome-driven. Our considerable expertise in the mobile channel, combined with a substantial amount of behavioral data that we collect and analyze allows us to create and execute highly effective campaigns for our customers. This is why our customer retention rate in our mobile marketing business is greater than 95%. Over the past 3 months, I've spent significant time in our offices in San Francisco, New York, London and Athens and have found a group of committed employees working hard to turn the business around. Additionally, as I've met with customers in some of these locales, I've been encouraged by their positive reflections on the quality of Velti's service, technology and team.

    In support of that, I would like to point to some of our key customer retention and new business wins. In the U.K., we re-signed contracts with a number of key partners, including Vodafone and Channel 5, and launched mobile marketing campaigns for several media and broadcast companies. In the U.S, we renewed our relationship with one of the largest U.S. retailers, who operates over 1,000 locations and uses geolocation at mobile targeting [ph] and notification to drive in-store traffic, customer acquisition and gift registry.

    In India, we closed more than 20 new deals, including a program with Nokia to allow Nokia to interact with its 70 million mobile subscribers using Velti's platform. And in China, we signed our largest deal in over a year of securing a $650,000 program with China Unicom.

    We are pleased with the progress since some of our new initiatives, including Velti Pay, which quickly built into a $5 million annualized run rate of new clients, following its successful June launch and our mobile customer acquisition business, is expected to continue doubling revenues quarter-over-quarter into 2014.

    Our leadership team is aligned and running at full speed to ensure disciplined execution of the company's strategy and plans to become cash generative. During the quarter, we conducted a review of the various cost centers and business lines in the company, which enabled us to reduce operating expenses by $40 million on an annualized basis compared with Q1. Key elements included aligning functions more closely with the business units in reducing overhead, exiting business lines that were generating significant losses for the company and consolidating facilities.

    We are also on track with the initiative launched in Q4 to reduce our annual capital expenditures by more than $40 million compared to last year. In order to better align our organization with our business focus, we restructured our North America sales organization with our business units to create greater alignment between the business and the sales teams, as we continue to see growth in North America. We also streamlined the organization by reducing the number of Senior Vice President-level executives and placing greater decision-making responsibility with local account teams who are closer to the customer. We are significantly restructuring our U.S. advertising business and have exited our mobile ad network business, Velti Media, which was generating significant losses for the company.

    Additionally, we recently engaged in investment banker to sell the remainder of our U.S. advertising business, also known as Mobclix, as well as look at other strategic opportunities for the company.

    We are continuing to streamline the organization during Q3, and focusing in on our core opportunities for growth within our business lines, as well as core geographies in the U.K., Western Europe, North America, India and China. Our core theme moving forward is making sure we are pursuing good businesses in good geographies with good companies. To that end, we have exited our enterprise business, and are seeking buyers for our supply-side Ad Exchange business while focusing our sales teams at our Mobile Marketing business, and winning and renewing programs with premier global brands such as Vodafone, Nokia, Coca-Cola and Toyota. We are investing in new products and services to help customers capitalize on the unique capabilities of mobile devices to support their efforts to acquire, engage and retain customers. We have launched a new version of our mGage ignite platform to give customers greater control over managing programs that support customers life cycle management and long-term loyalty. Our new release of the mGage Communicate Pro platform is currently being rolled out simultaneously in the U.S. and U.K., and the platform brings new functionality, which allows brands to conduct interactive mobile marketing campaigns with a global reach.

    As we move into the second half of the year, we are more disciplined, more focused organization. We have worked to put much in the past behind us, exiting certain business lines and geographies. We are committed to aligning the organization with the opportunities going forward and doing all we can to deliver value to customers and shareholders. Now, let me turn it back to Alex to close." - Mari Jean Baker, COO
    Aug 23 09:24 AM | 1 Like Like |Link to Comment
  • Apple's Calendar Chaos Trade Of 2013 [View article]
    I concur. Great read, but you lost me at the applesauce anecdote.
    Apr 18 10:10 PM | Likes Like |Link to Comment
  • Apple's Starting To Look Attractive Again [View article]
    An interesting catalyst that would not be a big announcement, but would be blow away street estimates is a slow down or halt of any margin compression which AAPL could achieve if they deploy capital to build/invest in it's supply chain infrastructure - buying the machines or in some cases, buying the manufacturer.

    My specualtive catalyst is that the rumors we've heard over the past six months about a stumbling supply chain is actually AAPL re-shifting, redesigning and investing in its supply chain. Verticalizing in a way no company has.

    By taking an increased degree of ownership and control over its supply chain and manufacturing, AAPL acquires depreciable assets that become taxable deductions.
    Feb 5 11:44 AM | 2 Likes Like |Link to Comment
  • Apple's Earnings Fall Is Completely Unjustified [View article]
    Tim Cook, Willy Wonka and Michael Corleone -
    From someone who ones a Apple stock - still; with a cost basis closer to our close today than the prices during the earnings call I'm offering my non-spin perspective and my only posting ever to SA. I'm not a writer and I have never blogged or pounded the table for or against Apple, so perhaps this may offer a fresh perspective.
    Everyone take a deep breath. I am certain that the following critical points, made by Cook and leadership on the earnings call will not make headlines, however - I would suggest that you reexamine these key indicators as I believe that if interpreted objectively, Cook, I believe is intimating a very meaningful upswing leading to the next earnings call :

    - Cook mentioned that in regards to innovation, "the new product pipeline is chock full."

    - Cook provided full disclosure that supply chain/manufacturing constraints hindered delivery in Q1. I'd expect this back log to front load the current earnings period and will continue to flow freely.
    - I admire that there was no specific address towards speculation and rumors in the media, stating that "I would encourage you to not interpret all that you hear as fact." I would argue that most people listening to the call missed this point and others as we have lost the art of brevity in our communication. I thought Cook was concise and matter of fact in a clear manner and did not give in to slightly antagonistic questions by some money managers that were seeking defense from Cook regarding recent rumors.

    - The new "range" approach which Apple is shifting it's guidance methodology to is not a way to soften or pad earnings estimates or to ratchet down from more aggressive past guidance - rather - it's a stop measure to defend against the hundreds of estimates on the street that are simply a % + or - of Apple's own guidance. A range will force the street to think more about their estimates and allow Apple and it's shareholders to deflect some of the nonsense that the media stirs. I am a fan of taking the "Willy Wonka" approach to running the business - they let products and the numbers do the talking. Everyone wants a golden ticket to see how they do it.

    - The minor increase in dividend, I believe says a great deal about the leadership's confidence in the near-term health of the business. For those that believe that the massive amount of cash reserves Apple has should be deployed to buy back shares or increase dividends - in my opinion are not investing in Apple, but are trying to beat the market. I believe the cash could be used for several, very meaningful activities, which should contribute positively to share price - for example: 1) a strategic acquisition - perhaps of a content provider or more assets that would enhance supply chain. 2) A special dividend announcement in the coming weeks that would reward those shareholders that have hung in there - not only would this improve Apple's perception in the marketplace - it would reward less of the Bears and opportunistic investors who jumped in for a free lunch. There will always be short interest - but, thou who short don't own the actual stock and don't receive dividends. 3) In front of a special dividend announcement, it would be an opportune time for Apple to offer its employees options at a price below $500/share which would be likely renew commitment from employees while giving them options at a price which is more likely to increase dramatically over the coming years than it is to decrease.

    - Lastly, I would challenge everyone to step back from a moment and consider this take away from today's earnings: I think it's fair to say that Apple's Board take its responsibility seriously to ensure that Cook and other executives are held accountable for Apple's stock performance - to varying degrees. Clearly, Cook has the most accountability. Going a step further, I'd propose that Cook and most executives knew with full certainty exactly how the market and Apple's share price would react. So - I propose that, the tinge of frustrated tone that was faintly distinguishable, at times during Cook's responses today should not be interpreted as defensive or frustrated, although I think it's fair to say that Cook did have those emotions zip through his consciousness today - rather, I propose that it was Cook's innate competitive nature, and his Steve Job's voice on his shoulder holding back - for the moment, taking one on the chin - as the Shortists absorbed a victory, the Bears won - meanwhile, Cook's is holding back - he knows that he's holding pearls of data about Apple's next innovation that if he so much as teased a detail about - would likely cause the plummeting share price to spike up instantly - just from throwing a juicy bite - a meaty nugget for the media and money mangers to squeeze every ounce of spin out of. Instead, of pontificating and writing about what Cook is doing wrong and what Apple needs to do - I will stand by Cook today, not necessarily 100% vested in the Apple cult - I also own Nokia, but I do believe there is a great deal of value that faithful and prudent shareholders will be rewarded with in over the coming weeks and months. Prudent and aggreesive rarely are pinned together, but I believe you need to be both to play in this game - and I propose that Cook, during the conference call today, in his mind's eye and with the Steve Job's voice on his shoulder - he wanted to launch back at the pestering and slightly accusatory line of questioning received with the "check mate" "Apple's back!" answers - but he stayed the high road. I propose that there is a greater plan in motion here and it will be executed. Stay with me here. Try to think like a high powered executive for a moment - even if you are not one - I'm not. Things of this magntude are often stratgeic and intentional. If the earnings numbers, today had blown away analysts' estimates - we would have an equal amount of hysteria pushing the stock upwards. Today's strategic dialogue and reporting on the conference call was designed - I believe to level-set the battle ground, re-calibrate the madness that has glommed to the Apple stock for nearly 6 months now.

    I have no factual evidence to back my statements, nor do I have any basis to predict where share prices will be when I wake up tomorrow or in three weeks. What I learned today is that there is not one individual posting on Seeking Alpha or in Cupertino, China, or Atlanta reading this post (unless Tim Cook stumbles across this) that knows the facts about Apple. I enjoy reading the posts on Seeking Alpha and gaining other's persepctives - but we heard something today that resonated with me, when Steve Oppenheimer who today commented that it is "impossible" to draw a reasonable conclusion about the broader business impact that one data point collected from one part of the world producing one product will have or what that data point means regarding the product strategy. He used the word "impossible". In today's fluffly language, non-committal jargon filled dialogue that we - hear often - on Seeking Alpha and in my own day to day - providing consultative speak to clients that protect us from being associated with a choosing a side. Oppenheimer said "impossible". It was good to hear that language from a CFO. He knows something we don't - or at least I propsoe that we allow him to prove it.

    In summary, I hope that, if you read this - that you might take a moment to challenge yourself and others thinking so as to attempt to grasp for and go beyond what a headline says and then, take time to listen to the earnings call again - when you're not simultaneously following the share price as it performs a plumb line nose dive. If you're a an Apple Bull that missed the earningns call - go for it, but I'd advise that you wait until you've regrouped and can appproach objectively.
    I have only mentioned a few observations and what I see as the key takeaways from today's call that I believe are key indications of the next few months and are worth the time to dedicate a few thought cycles. There's is absolutely no quantitiaive data to confirm or support my statements. With that in mind, I'd offer my characterization of Cook's disposition today, compared to the Bears and panic sellers - think of Cook as Michael Corleone and the opposition as Fredo Corrleone. If you're not familiar with the Corleone brothers; please Google. In conclusion, I am as level headed as someone could be for being on the receiving end of a stock market beating today. I own Apple stock, but I think whether you bought in at $85/share or $620/share - no one enjoys losing money that I have ever met. I challenge all of my fellow Apple Bulls and those not Bullish to get "old school" for a minute - tune out the blog feeds, Seeking Alpha and StockTwits and don't allow fear to dictate your day or how you invest - and stay positive for a while longer - let's see what Cook and team have in mind. I'd welcome any feedback or additional insight that would challenge our thinking - without a single number to reinforce your position - unless you happen to be Cook or Oppenheimer.
    "Oh, you should never, never doubt what nobody is sure about." - W. Wonka


    Jan 23 10:50 PM | 16 Likes Like |Link to Comment