TomTom Is Staging The House - 60% Upside As Acquisition Target (Video + Podcast)

Includes: TMOAF
by: Sven Carlin

The sale of the Telematics business and subsequent capital return to shareholders leads me to believe the founders want to cash out.

In an era of autonomous driving, TomTom's mapping data and technology actually increase in value.

On top of the speculative part, the company is cash flow-positive.

I am sure many remember TomTom (OTCPK:TMOAF) as the global leader in navigational devices 10 years ago. Unfortunately, since then, there haven't been many positives about the company, but it looks like things are changing. The company sold its Telematics business for 910 million euros and will pay a capital return to shareholders of 750 million euros that is tax-free.

After the transaction, the only business segment left will be Mapping, alongside a clean balance sheet. The decision of the founders and majority owners not to invest the money into growth and development leads one to believe they are "staging the house" for a nice sale.

I sit down with Swen Lorenz, who has made an in-depth analysis of the situation, and discuss the following:

2:02 - Company overview

3:45 - Two strategic decisions

5:36 - Autonomous driving maps

6:34 - Competing with Google (GOOG, GOOGL) and HERE

8:20 - Valuation for company

11:24 - Takeover target

12:05 - Owners want to sell

14:24 - The risk

17:12 - Catalyst

18:30 - Takeovers with a margin of safety



Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: The guest is long TomTom.