comScore (NASDAQ:SCOR) is a deeply misunderstood investment situation offering an exceptional risk/reward opportunity for risk-tolerant investors, in our opinion. We believe the company possesses a portfolio of unique media measurement analytic tools that are not easily duplicable. We believe the liquidity challenges the company is experiencing are not nearly as draconian as investors seem to believe and that significant upside potential exists from the current $1.65/share price level. To be clear, there are liquidity challenges, we just believe the company has options to mitigate those concerns.
SCOR's investment thesis lies in an understanding of 1) its unique assets and capabilities within the ad-tech ecosystem and 2) the simple recognition that Starboard likely wants the business sold (it would be paid 110% of par value for its convertible bond, or roughly $224 million). The Board, after several false-starts in creating a credible senior leadership structure, likely wants the same outcome. Finally, current CEO Dale Fuller, placed on the board by Starboard in 2018, is not an industry expert, and also likely sees himself as overseeing the sale of the company.
In its August 6th earnings announcement, the company stated, " The management team is exploring all aspects of the business and is conducting a comprehensive strategic review of all our options…" Recently, Paul Reilly, a Starboard board nominee, left SCOR's board, leaving Starboard with one board member in Mr. Fuller. Thus, while Starboard's convertible bond makes them an important, and outsized stakeholder, they do not control SCOR. Thus, if all stakeholders point to selling the company, then the private market will price this business. Our belief is that it will price it much higher than the pubic stock market is doing today.
There is little question that advertising measurement technology is changing fast and that venture capital has financed many start-ups
