Member Info for jonhas

Https://docs.google.com/spreadsheets/d/1bJ3AQm_-7Tn6C5bxF6lc-x7X6eXwPLF8H2KdDxmCYw4/edit?usp=drive_link

Nice model to run thru and get the grey matter working on; I have a couple of thoughts on its accuracy which would be good for someone else to validate:

-Enquest pays taxes in arrears. The company explicitly guided to pay "significantly less cash tax during 2026". A more realistic figure for Tax + EPL is $77M rather than the $116M

-the $60M Magnus BP Settlement needs to be subtracted from the 26 FCF

Thanks Oldpal, however I think your reply assumes that the Fair Value that they have down for Starling is the same as in the FT article -without any evidence to reconcile. What I really wanted was some evidence that the two are indeed the same. Although they might be, its also possible that their Fair Value is somewhat different. Often they are not, Revolut has just had a funding round for 75bn but Grow still has Fair Value at around 55bn.

Does anyone have an idea what they have as fair value on Starling at present? Its valuation appears to have a chequered history, with the exit of Jupiter in 23, for 1.5Bn. I presume they would have reflected this at the time however I cannot see anything in their past submissions.

Yes, so it looks like their fair value calculation from Sept should be nearly doubled, as the previous funding round, Series D, valued it at 1-1.5bn USD. Do you, or anyone have any idea what they're fair Sept. fair value on Revolut is? I presume its less than the 45bn USD and hasn't yet been refreshed on the recent 75Bn funding round?

Anyone been following the results of the other ad-tec companies? Viant's (DSP) looked pretty good again, only hoping now that Nexn can follow it in some way, it won't be anywhere near as good but something that is on target would be really nice.

Hi Gdog, no doubt you've seen the latest Perion update. It does all seem cloak and dagger from Taj still; I listened to him on Needham's latest conference and didn't get a warm feeling and concluded at the time that the MS search biz should be seen as a write off - but as always its difficult to gauge exactly what's left.

Anyhow, more interesting from a Nexn perspective was that today's PERI guidance update also mentioned advertisers wanting to trade up and utilize more premium formats which for Perion is a cause of concern for some reason but Nexxen have been moaning about advertisers trading down for the past few quarters so its possible to see that Perion's issue is actually the reverse for Nexxen - more demand for premium higher margin inventory.

In their new model, the PH analyst talks about a near doubling of Group FCF for 24 and 25. When he mentions the doubling, its not clear what is being doubled ; not the actual 23 number but their initial view of 24 is what I'm assuming. However this % increase is far in excess of Cavendish's remodeling numbers from their note. Yes, it would be nice to see the PH numbers.

Hi Gdog, thanks - I took a look and yes lots of investors pondering similar thoughts. Probably too many questions at this point and the overriding concern that Tal was full of confidence on the MS relationship only a few weeks earlier. The conference calls were as (or more) misleading than any of Nexxens. Although Nexxen has spread its despair over two years. At this point ,I guess I'll stick with major holdings in Nexxen and Viant.

Hi Gdog, obviously the new guidance is all bad news but specifically does the drop in EBITDA guidance from 180 to 80 surprise you? It seems that this is a disproportionate drop which either leads me to think that the search biz was the more profitable or that other profitable parts of the biz outside search are expected to be also impacted. Any thoughts on which this is.

It does all seem to come as a big surprise to Tal. A month or two ago I listened to the broker conferences and he sounded very bullish about the MS relationship - made it sound like it was a given.

They have circa $500m in cash; which given the relatively low ad-tech valuations presently could be money very well spent but with the unexpected nature of the MS news perhaps there is a risk of a hasty purchase or two?

Hi Gdog, also sorry to hear the bad news on Perion. Ad tech is not for the faint of heart that's for sure.

Knowing the stock so well I'm interested in hearing your thinking now. After the shock; do you see it as a potential buying opportunity with the market over-reacting or is it a wait and see for now? If we assumed the search is a write off at this point is the rest of the biz even better value after the SP crash? For the brave is it a potential opportunity?

On the other board, they think Tosca maintained their overall position through derivatives, unsure whether this is pure conjecture on their part or not. The fact that they bought net ADRs and sold on London does suggest that its perhaps got more complexity than a straightforward reduction.

The ad-tech valuations are all very interesting at the moment. For example, when you consider Viant's valuation based on its fundamentals compared to both PERI and NEXN. PERI has performed well for the last two years and is either slightly down or flat, whilst DSP is up having performed relatively poorly over those same two years. But its up over 100% in the last year because its staged a recovery from after a poor year - lots to ponder over.

On the matter of another share investment interest - PERI.

NEXN is projecting 9% growth ex-TAC this year, coincidentally it achieved 9% in programmatic this year.

PERI is projecting 10% pro-forma. Last year it guided 14% and achieved 16%. There seems to be some convergence with other public ad-techs (outside of Viant and TTD) with the same growth range.

What's your thought on PERI's guidance? I guess the reduced growth of EBITDA is perhaps not too surprising given the progress over the past couple of years but the ex-TAC is more surprising perhaps? With the improvement in the macro, one may have thought Perion would be accelerating growth not the reverse. Or do you think its a matter of under-promising and over-delivering?

Gdog, I think concluding that the Amobee purchase was the BIG mistake might be incorrect, sure the wheels came off the cart at around that time but perhaps they were going to come off anyhow. In the recent Needham investor conference, in the Q&A, Ofer appeared to state that "managed service" was 50% of revenue. It appears from previous calls with other adtechs that the Managed service category has suffered perhaps the most in the downturn. I think Amobee with its enterprise self-service capabilities was seen as the solution to Nexxen's reliance on managed service revenues - but it didn't come in time to offset the downturn. In the Q4 results we were informed that self-service ex-TAC more than doubled in 2023. Unfortunately I've not pinned down precisely what % this makes it. Sure the communication around the acquisition was beyond abysmal, expectation setting was unbelievably poor - but Amobee itself may yet turn out to be a good deal.

Firstly, just to say I'm long on DEC and I'm only critiquing the OakBlokes's model as its worth the time to do so unlike the shorter's report which is so full of holes and half truths that its totally unworthy of a review.

So in OB's valuation model there is in my mind an apparent and significant issue with some of the associated conclusions. I want to discuss the key one in this post.

I've verified all the figures from DEC reports concerning PDP and PV10.

Total PDP is 607 in 2020 and 826.6 in 2023H2. That's a 36% increase.

PV10 of Total is 2000 in 2020, and 5904 in 2023H2. That's a 195% increase.

Now the issue is that DEC have been credited with a major uplift in PV10 however surely their role has only been partial, ie. the 36% increase in PDP which all things being equal equates to a corresponding 36% increase in PV10.

Now the question is what else has driven the PV10 increase of 195%? One factor I suspect is the forward pricing curve which I believe has significantly revalued since the end of 2019 but this alone is again not sufficient by my calculations so what else has driven it? The cash margins are pretty constant throughout the period.

Any thoughts? The valuation model interests me but until it can be fully explained.

Quite coincidentally, I just looking at Future and came across the piece below which mirrors my own previous post and even uses the buzzword of "stabilized" again:

"Since then, like a lot of companies, Future’s price has fallen sharply to just 843p due to various macro environmental factors such as falling ad spend and weak consumer confidence, which has reduced e-commerce volumes. Further investor concerns have stemmed from declining online audience numbers for both FY22 and the first half.

H2 shows the worm is turning

But when the company issued an update on 29 September, Future said audience numbers in the second-half had stabilized and it had seen positive month-on-month momentum in the final quarter."

Hi Radium,

Whilst in essence you are of course correct when you write: "it's clear that ad spend is subdued and it is being targeted to where it can produce a quick return rather than building Brands."

The point I was making in my post is that the above left in isolation is a little backwards looking. For trmr and many of the others serious issues in the macro environment started late last year and deepened in Q1 of this year. Although there are still issues and no-one is very confident, my reading is that for most, things have improved since July and some confidence has returned. Yes, SFOR and some others are still suffering but SFOR although in digital advertising; its not pure ad-tec. Most Q3s mentioned "stabilization of conditions" which seems to be the new buzzword for improvement or the returning to more normal conditions.

Anyhow do you have a view on TRMR's Q3 results, I'd be interested in comparing? I was off on Q1, got Q2 pretty much spot on, and now await Q3.

Hi Radium, I'm a little intrigued by your last post. Much like yourself, I have been closely reviewing Q3 ad-tech results and had formed the overall opinion that most were more positive about outlook than in previous quarters. Most have mentioned thru the year, the weakness at the end of last year and at the beginning of this one, and again most had seen further stabilization from July which further consolidated during Q3. From memory, most if not all described this picture to varying degrees.

TTD was somewhat new in describing the early October weakness but then went on to describe it being for two weeks before it re-stabilized. The TTD SP dip is I believe a mixture of factors:

-the SP is priced to perfection some would say so any deviance is punished, SP is still up 32% in a year;

-the strong Q4 growth last year made this year's comparable challenging;

From my analysis DSP has tracked TRMR the most closely quarter on quarter over the past 18 months and more so than any other ad-tech stock. Its Q3 was promising and Q4 guidance again okay so fingers crossed for TRMR.

I don't see the similarities but I don't suppose you posted it because there were any. Just find a company with a corrupt CEO and try and spread the muck - some PIs might be duped - yep same game as you've already played on the other threads. I think any PI looking at our thread can make an informed decision now.

Although nothing is impossible - I doubt if there are more than a select few companies that have gone into receivership 6 or even 12 months after a major equity raise, where the raise was for an acquisition and not to sure up finances. And what you have been suggesting is that DEC operates a fundamentally broken or devious business model - and I'm suggesting that IIs would have steered clear if that had been the case- they have all the resources and access to accounts to avoid it. Still you'll catch a few out with your games.