Member Info for Frisby

How about the fact that it could be viewed to already have an eye watering valuation

Very encouraged to see the short position in XLM all but closed as of Nov. It's now down to 0.03% which is next to nothing in the grand scheme of things. Hasn't been this low since Dec 2016 and what followed was a share price run up from 94.5p in Jan 17 to 198.5p by Dec 17. Another double up from here would go down a treat. Data taken from https://my.euroclear.com monthly stock on loan data Percentage of XLM stock on loan (short) May 0.37% June 1.13% July 3.01% Aug 3.24% Sept 2.77% Oct 0.84% Nov 0.03%

You will find market makers make their own rules with this share. It makes for a wild ride.

Ex divi was 4th Oct

Sorry to see you go CM. Hope you buy back in for the recovery. Any chance you can post the Growth Investor comments here please? We could do with a little cheer. Still feel value will out for XLM investors. Net of cash currently valued at £160 million which seems crazy cheap for a tech company with great prospects forecast to make £30 million profit in 2019. If i had the money I would buy the whole company and I suspect private equity could be planning a swoop around these levels. I also like the moves XLM are making in Personal Finance in North America. The new website at Webpals.com explains the strategy well. In terms of the macro picture and Italy it's the same old noise. Always some crisis somewhere these days. They'll sort it out they always do. Thankfully at the micro level XLM has zero exposure to the Italian market.

...is the fact that Axxion S.A Luxembourg crossed the 6% of shares ownership threshold on Monday. However since then several more million shares were purchased yesterday......tasty. What a lovely morning this has been sat in Russell Square

14,098,000 shares. Wow... One day Rodney One Daaaay

Buy

...so perhaps it is these Luxembourguese (is that even a word) folk who have put orders in with market makers at specific prices. Now their order has been filled and they are aboard the train is the handbrake about to be released?

Well looks like we're not the only ones who think XLM Shares are catergorically undervalued. This rapidly growing privately owned fund based out of Luxembourg with 40 employees and 8.4 Billion Euros under management has spotted the opportunity and snapped up no less than 14,098,000 of your finest XLM Shares.

The UK regulatory picture is gradually becoming clearer and even in it's current form is still one of their fastest growing markets. The potentially vast USA gambling market is still embryonic opening up state by state. XLM are already building assets and infrastructure so they are ready and able to work with sports betting and casino operators when the time comes. Revenues could begin flowing here in 2020 and beyond. I have topped up my holding this week as I believe value will out for XLM shareholders in due course. These shares are too cheap at this level.

Huge buys going through again today, my guess is shorts closing at requested prices, once again in cahoots with market makers walking the price down for them akin to the other Monday. Recovery is on track and the shorts will know that. They also will not want to get caught in a short squeeze which could feasibly happen when a company is sitting on $51 million in cash with access to an additional similar amount in debt in what is a consolidating sector. Attended the presentation at Berenberg HQ today. On reflection I feel reassured. It appears the biggest impact on profit in the first half was due to one-off malicious scraping and black hat attacks which began to impact the SEO performance of some of XLM's publishing assets in April, May and June this year. These assets are the profit engines of XLM hence the need for the unexpected trading update in June. Today it was alluded to that it was organised crime carried out by a company or companies in Eastern Europe who deliberately target high net worth businesses or publishing assets such as those owned by XLM. Driven solely by financial gain their game plan is to duplicate content and effectively pose as XLM and indoing so earn more money in a few weeks than they could in a few years. They then move on to their next target. Suing these entities in local jurisdictions would be an expensive and fruitless pursuit. Ory and Inbal stated that XLM have always had security systems in place which have successfully protected them from such techniques for the last 15yrs. As a result of the recent breach, the upside here is that XLM has reviewed and upgraded all security infrastructure and they are now fully protected from these attacks and in future will adopt a pre emptive role and preparedness to prevent any reoccurence. The sites targeted are now recovering their google rankings and the latest Google Algorithm update in August showed the comeback is well on track with site rankings steadily going back up to previous levels. Full recovery of Google rankings could take approx between 3 and 12 months for the respective sites to regain the positions they had prior to the attack, but recover they will. These attacks were isolated events which have now been blocked. Their is nothing wrong systematically at XLM. The priority for 2018 is to hit the revised revenue and profit targets and they are definitely on track to do so. They then see a return to growth in 2019 and beyond. Personal finance assets are performing well and will be added to. They see real oportunity here in North America and have quickly become an established player in what is an uncrowded market place. All acquisitions have been earnings enhancing and there is more to come on that front. They have also added more new customers in Korea targeting mobile games and see further revenue growth in Asia. They are fully compliant on all aspects of GDPR and this will have no negative impact on XLM moving forwards. The UK regulatory picture

Sod it buy some shares live it a little lol If they maintain the interim dividend of 4c (3.05p) per share then that gives a yield of 6.6% for shares purchased at 90p. This all seems like the short position making hay whilst the sun is not shining. They have played the uncertainty created by 11th June perfectly (with a little help from mkt makers imo) Mon 24th Sept is a chance for XLM to nip that uncertainty in the bud. I could see us back at 120p post results in no time at all.

What do u mean "the £ was the BB default"? Certainly seems to be a professional shorting job going on on XLM in recent times. Today there was 2.75 million shares quietly purchased in 4 tranches of 1,000,000 800,000 600,000 and 350,000. When one considers that there are currently over 7 million shares on loan to shorters perhaps these large buys are them taking part profits. ...Or are they buying them back only to dump them again on or before results day? Professional shorters strike me as very intelligent but they must surely get a helping hand from market makers on the take who will drop prices violently like on Monday. The whole thing stinks imo. What a week...

This looks like a textbook treeshake to me. Currently jewish new year and results still 2 weeks away. Shorters and market makers having a field day. Read the latest interview from Ory I posted here last month for a more rational perspective. I suspect value hunters will begin moving in at these levels

My top up purchase of 1779 shares just now at 108.75 showing as a sell. Suppose its hard for the machines to tell buys from sells when spread is this wide.

EGR Marketing: You’ve said in the past that XLMedia was one of the early adopters of an omni-channel approach to online performance marketing. What did you mean by that?

OW: Historically, affiliates were good at one thing. They knew how to do SEO, or they knew how to do some paid search or Facebook advertising. These days, especially in regulated markets when everything is open, it creates an opportunity on one hand, but it also makes it difficult because if everyone is allowed to do paid search it is obviously more expensive, more competitive and the margins are lower. But the scale is big. So, affiliates really need to become multi-disciplinary – they need to develop know-how and, ideally, tech as well to run lots of different kinds of user acquisition methods if they want to stay competitive.

We are about 45% and 45% between our traditional SEO business and our media division, which runs anything from paid search to Facebook to Instagram to Twitter and video. We are a Facebook and Instagram marketing partner, which took quite a lot of effort to get, and we have a significant amount of volume coming from any different methods and products.

As a result, we wanted to maintain a large tech team in the back-end and we have close to 100 developers in house who develop both our optimisation tools for our publishing division and media-buying tools for our media division. In regulated markets where everything will theoretically be allowed, it would be very challenging to remain an affiliate with a single methodology. And it would also be leaving money on the table because not all users search for the best casinos or the best odds. There are other ways to reach them and I think if you are not practising that then you are missing out.

We have taken a safe and diligent approach, and our leverage level is close to none.

Catena [Media] has a €150m debt out there. And they would admit that most of their growth came from acquisitions. I don’t say that as a negative; it is their strategy. When they came to market they were a business that is a fraction of what they are today, and they have acquired their way to big growth. Generally, it is a riskier approach, with the different back-end systems and people working in different locations and different mentalities. We generally consolidate acquisitions into our team and platform – we don’t leave them running on their own platforms. And most of the acquisitions we have done out of our cash flow.

“Even though everyone is talking about the backlash, the UK is still one of our fastest-growing markets” – Ory Weihs

But we see acquisitions as a complementary tool for growth and a way to get into sectors that we are interested in. We did this in 2014 with mobile games and we did this last year with both personal finance and cybersecurity. And we’ve done it with gambling. So it’s not like it is a way to replace organic growth in our core divisions. We passed on many acquisitions that others have bought because we didn’t feel them to be a value that fits our strategy. Our M&A strategy isn’t to just buy everything – we want to buy things that are proven to us, are valuable assets or unique product offerings.

EGR Marketing: What are your key markets and product verticals right now?

OW: Even though everyone is talking about the UK backlash, the UK is still one of our fastest growing markets. We still see plenty of growth in Scandinavia: in Denmark and in Sweden we are looking forward to regulation, which is very positive. 2017 was definitely the year of financial services for us, and we really have started to invest more in the sector. When I say financial services, I mean plain vanilla banking services like credit cards, bank deposits, loans and mortgages rather than CFDs or Forex.

We have especially focused on the North America region and we see this as a very strategic sector in the long run that we are very bullish about. Having said that, we’re definitely not leaving the gambling sector and I’m confident that in the next three to five years it will definitely be our largest sector. Gaming is still the core business for us, and other things like personal finance, games, apps and cybersecurity are more on the perimeter. Of those, personal finance is the one I’m most bullish about and should become a more substantial part of our business.

EGR Marketing: In April, you acquired WhichBingo for an undisclosed sum. What does this bingo portal, which has been around since 2000, add to XLMedia’s portfolio?

OW: WhichBingo is an established, solid, well-known name in the gambling sector and the UK in general. The sellers and the staff who worked on WhichBingo have done a fantastic job positioning it and definitely feel that it benefits from the scale of being part of XL. We have a lot of interesting opportunities and things we want to do with it. We have done upwards of 20 M&A deals since the listing, so this sits as a solid asset that we have bought and we will put it together with the rest of our portfolio and keep optimising it. We are always looking for assets that weren’t built to sell, and WhichBingo was definitely not built to sell – it was built to be a good comparison site.

XLMedia says there is still an opportunity for large bingo affiliates like WhichBingo

EGR Marketing: How much potential is there still in bingo?

OW: I think there is still opportunity for a few larger players, and WhichBingo is the largest of them. It [bingo] is mainly a UK-centric product and with a certain demographic but it is very stable. [Online] bingo is one of those products that has been around 18 years and it doesn’t seem to be going anywhere. I see it as an interesting one and something that we should have, but in terms of M&A going forward you’ll probably see us do more deals in other verticals.

EGR Marketing: Leading Finnish gambling information company Good Game was acquired for €15m earlier this year. What was the strategy behind this purchase?

OW: The strategy was to continue expanding our portfolio in a market that we have been in for a very long time: Scandinavia. We know how to run these assets, we have the teams and we have the volumes. To take over solid quality assets like the ones we’ve bought, it is quite simple for us in terms of integration. We and our investors love it, and the integration risk is quite low. I’m convinced that the assets we have bought are very high quality and, so far, we are very happy with the performance.

EGR Marketing: Despite all the consolidation in the sector over the past few years, why has XLMedia largely refrained from going on an aggressive shopping spree?

OW: We have been around since 2002/2003 and we have a large stable of assets that we are developing internally as well, so we are not reliant upon acquisitions for growth. And when we guide analysts and the market we don’t really forecast acquisitions – our focus has always been organic growth. Of course, there is an opportunity in the last five or six years with the consolidation in affiliate marketing, but I completely agree that we haven’t been doing it as fast as others.

We have taken a safe and diligent approach, and our leverage level is close to none.

It’s also important to say that none of the factors that we mentioned would each individually reach a point where we would put out a profit downgrade. It’s a variety of different things that bundled up together into a perfect storm. Most of them are manageable and we believe they will get the business back to growth. There is nothing that is systematically flawed in the business – all the machines are working, the people know what they have to do and we have mitigated a lot of the issues.

In Germany there was a period of uncertainty at the beginning of the year as to where the market is going and around VAT charges. That affects the general nervousness in the market and an unwillingness to engage in larger deals from the operator’s side. And we had some SEO issues on the publishing side; mainly things like scraping attacks and Black Hat techniques used against us.

We are not the only [affiliate] in the sector affected by this, but we have upgraded the technology on our side of the business to deal with this and we are at a point where we have stopped the negative effects of it. We are not seeing any more drops in ranking and we are seeing mainly increases in rankings, so we believe, midterm, we will definitely gain positions back and get the division back to growth.

EGR Marketing: How has the business been affected by this “perfect storm”?

OW: I think all these things have to be remembered in context. We started 2017 with a forecast of $36m EBITDA and we ended up at $47m after two profit upgrades. The bar was set relatively high going into 2018 and with things like Australia closing and nervousness in the UK and Germany, it created challenging marketing conditions. But we believe that we can mitigate the risks and believe in the business going forward. We have a positive future in the longer run and this will be remembered more as a speed bump than anything else.

The business has seen tremendous growth in the past two years… if you zoom out and see the growth trajectory, this will not have a significant effect on it. I have been buying lots of shares in XLMedia myself, including more than £300,000 on Monday [when the profit warning was issued], which comes on top of quite a lot of investment I’ve done into the business in the past year on a personal level. I’m committed in the long run.