Ben Richardson, CEO at SulNOx, confident they can cost-effectively decarbonise commercial shipping. Watch the video here.
A trustworthy management could still fall victim to stale R&D spending especially when theyre being pressured by shareholders to improve the bottomline or purely to return them value. Blinkx started out with market leading tech and look what happened there. One eye on future always. Could always just acquire the tech though I suppose.
Anyway, the basic signal of the buyback, that management thinks the price is too low is amplified by the context - covid-19. Despite companys cutting their near 100 year dividends or taking on loans that lock out buy backs for a couple of years. Despite the extreme uncertainty, Tremor is still buying back its stock. What other signal do you need to know this is a buy?
Acquiring companies with stock is a longer term investment in eps growth. If an acquiree accepts stock you can be sure they've been persuaded that it's worthwhile over cash.
Dividends offer relatively little value when growth is on the agenda, especially inorganic growth in an industry known for consolidation. Cash on hand needed for "quick" buying opportunties if they present themselves.
Buybacks can also offer some support during volatile times.
If your share price is low, the logical thing to do is buyback because the benefits are cost effective. Buying stock anywhere above "low" levels would likely be a sign of a lack of imagination for growth, price inflation, something thats been systemic in the markets last 5+ years to cover up minimising profit margins.
The way you've presented it stt, seemingly Facebook are on the cusp of revenue collapse. For the first 3 weeks of April during the lockdown revenue was flat only even after having significant growth in previous quarters. They also donated $300M to those affected by the pandemic - seems their financial health is sound. The problem is business outlook, like many other companies the uncertainty is the real problem because of potential 2nd waves, the scale of unwinding the lockdown etc. They can't provide forward guidance. Also consider that Facebook is very much used by smaller businesses compared with Tremor, those who probably have no room whatsoever to keep up brand presence.
I'd take sustainable revenue over unsustainable revenue anyday, if they hadn't closed those revenues then they'd surely have to now. Who cares if revenue is revised down this year. With covid 19 we all have to think medium/long term now anyway because there are v few short term plays anywhere in the markets. The company is moving in the right direction with the agility to survive covid-19, that's all that matters.
This is a different company to Rhythmone with different management. I don't understand how you can draw comparisons like that. Cash in the hands of fools vs non-fools is night and day.
Besides, advertising isn't going to stop entirely, companies will reevaluate their marketing strategies and will focus on the most cost effective avenues (CTV). During 2008 recession the stocks that did well were comfort stocks because people were financially stressed. Content consumption over connected devices will no doubt continue to grow probably even more than it naturally has because everyone destresses by binge watching nowadays. When you self isolate for 14 days stt, what will you do? Binge watch probably.
@stt, this is why you humbly streamline a company to survive circumstances like these
Markets have been amazingly resilient last couple years wouldn't be surprised if they recover quickly. At the same time can easily see a major economic decline (personally I'm leaning towards the latter). Think the board might be prudent in the short term because they have the cash to wait it out but there's definitely consolidation opportunities ahead that they will (should) capitalise on. It's still a growth industry (CTV) and with the cash, any sort of recovery should see Tremor bounce back tremendously (as small companies do anyway) with less competition and a greater arsenal behind them. When investors come back into the market they'll be more focused on value therefore Tremor. At these prices, a buy and hold for sure though wouldn't begrudge anyone to hold cash for next few months as companies include 'covid-19' in their forward looking statements and the virus reaches its Western peak (and the financial disruption realised).
Desperate for a deal with Tremor yes stt you are correct. Seems to me the equity and general partnership is an admission of a company who sees Unruly being better managed in the hands of Tremor. They know theres a future but theyd rather not have to deal with the details given their own streamlining efforts. Let's also pause and appreciate the new non executive directorship, any doubts of management being shady (carried from those legacy R1 holders mostly including myself and stt of course) should now disappear entirely.
If you take a look at his stock challenge history (type in on google), you'll see he has a penchant for distressed small cap stocks. I would bet he saw an article on the advertising apocalypse and picked R1 now Tremor as the mode to profit off that. People shouldn't filter him, he is a devils advocate, if you still disagree with him putting aside confirmation bias youre on to a winner. Let him do the contrarian investment research for you even if that means enduring some repetitive posts.
Stt, alongside your posts on this why not reiterate the SPECIFIC ACTUAL effect this is going to have on Tremor's bottomline, otherwise it seems youre just throwing mud at the wall to see what sticks.
If they need the cash for cash flow stt why buy 20M worth of stock that according to you won't ever appreciate but depreciate? If they're so desperate to make operational ends meet.
But in those 5 years Rhythm acquired and was in the middle of a transition towards mobile. Missing context stt
A lot of what you say stt is somewhat believable. This, however, is one of those desperate attempts of yours.
The key quarter is the one after the next. If Tremor do not show decent organic growth after Christmas, their best quarter, that's a really bad sign. Especially as you'd think the partnership with LG should be in full swing. Black friday this week, hopefully everyone buys up LG tvs.
If Tremor need the cash pile for cash flow then surely you can then extrapolate that the larger the cash pile, the greater the business commitments Tremor have i.e. Tremor is involved in a lot of business which is a good thing.
But the healthy cash accumulation (growth despite 19M buyback funds) doesn't reflect it's purpose is for cash flow purposes unless they are expecting a proportionate increase in business which is again a good thing.
Stt, even if what you are saying is true, it is a positive not a negative.
With all this cash, you'd expect them to do something with it. Reinstate the dividend, another buyback but personally I think they're going to buy someone once this integration is over (no reason why, just seems like that they're accumulating cash). Maybe they just want to be mobile if anything attractive does come up on the horizon.
Organic growth in CTV that reflects the growth you'd expect to see from an opportune market as Ofer and others have said it is, is what I would like to see to feel reassured in the shorter term.
Performance as they have said will become less and less of a part of Tremor so decline there is fine in my mind. But if growth elsewhere doesnt outstrip to a good degree the decline in performance I'd be a little worried.
Ah right, Dataxu, that's it stt
A better use of relative value than sizmek eh stt?
There would be greater correlation though between the magnitude of buys/sells to the sp afterwards though? The board promised management buying, the Chairman's buy off the face of it seems measley compared to the CFO's sell with perhaps the latter being the real indicator of future outlook. But if this amount isn't out of thr ordinary for tax reasons, that is reassuring.
Not sure if institution to institution dealing makes it different though
I know institutions usually have routing order algorithms to minimise price impact so they don't buy/sell at a higher/lower price than necessary. Instead of a bulk order theyd split it up into child orders. That's my bet anyway
I would believe completely the sell for tax reasons if the amount was less so. Does anyone have a better understanding of whether the amount sold is believably due to tax reasons or a cover up?
Regardless of the reality of the LG partnership, whether it is lucrative or not, it shows that Tremor has some weight in CTV to achieve this 'exclusive partnership'. Stt said recently that Tremor are late to the party...this LG partnership says otherwise...
Stt refuses to discuss Tremor's CTV capability, the crux of their strategy going forward. Ignoring this only reinforces stt's bias and highlights the big hole in his invesment thesis. This will be their growth engine, why ignore it? Stts concerns are industry challenges but the industry outlook for CTV is great so why not at least talk about that?