Member Info for SP180

Https://www.adexchanger.com/online-advertising/mediamath-files-for-bankruptcy-after-acquisition-talks-fall-apart/

Hi Radium,

Thanks, appreciate the comments.

Hey Dawg,

Apologies for the belated response.

I’m well, putting Tremor’s share price aside, I’ve still been around in the background but not had much time or appetite to post since digesting all the court docs and I always knew that it would take some time and building for the VIDAA partnership to bear fruit. But I largely share the sentiment of Woutrius and Radium.

How’ve you been, how did the plot sales of your development go?

Yeah I used to forward various notes to you, glad to hear Finncap remedied the issue.

Re SVB:

On their investor site they list their ESG section above their governance section. Shows their priorities…

I didn’t realise when I last posted that the reason they disposed of the $21B AFS bonds was because Moody’s advised they were heading for a double downgrade (not because they thought recapitalising was the smart thing to do given the steady stream of withdrawals). SVB flew over to GS for advice, sold the AFS bonds to GS (who’ve probably already flipped them for a healthy profit), and started the raise to cover the $1.8B hit. The book was apparently subscribed but because of the necessity to complete before the Moody’s downgrade landed they didn’t have time to complete.

I wonder if they had tried recapitalising earlier, despite being technically insolvent with the bonds mark-to-market, whether they would have bought some time and been able to ride out interest rates.

Rather than debating the impact of retracting regulation maybe they should start by focusing on clawing back some of the c.$80mm the SVB management got over the last two years.

Also I’ve not seen anyone mention, Acuity Ads had 90% of their cash in SVB, trading was halted on Friday.

In addition to the insured $250k available Monday the FDIC have stated they will be paying an advanced dividend to uninsured deposits within the next week and issuing a receivership certificate for the remaining balance. While the amount hasn’t been specified by the FDIC there’s various suggestions circulating Twitter that it could be c. 50% of uninsured deposits.

https://www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/silicon-valley.html

The issue with SVB has been liquidity over issues over the quality or lack of its balance sheet. If it was able to see its bonds through maturity (which were paying down $3b each quarter) it wouldn’t have had an issue but given withdrawals were running off faster they sold $21B of available securities to sure up their liquidity. In doing so realised a $2B loss which sucked into SVB’s regulatory capital position they looked to do a raise. When they announced the restructuring (the same day Silvergate announced it was going into voluntary liquidation) VC’s recommended companies pull their money from the bank leading to depositors attempting to pull $42B out on Thursday.

With Tremor having taken a $90mm loan and drawing an additional $10mm from its $90mm revolving credit facility at Amobee close and given SVB is listed in the latest 20-F it’s anybody’s guess what the exposure to SVB is, hopefully we get some clarity.

I read many comments of tech companies that didn’t have deposits with SVB but because their payroll company used them staff payroll wasn’t made on Friday. I guess everyone will be wondering what the exposure of their partners and debtors are too.

Dawg,

While I agree with the sentiment, if they perform like Jeff Green they'll no doubt expect to be compensated like him to. He's just been awarded $800mm PSOs that vest over 10 years!

Has Gerstel had his two week vacation on his yacht yet, certainly deserves it, I'm amazed by the performance they've achieved.

SNN,

“They seem to be saying they will use third parties”

Yeah seems they acknowledge the value of staying focused on what they do, creating quality content, and leaving the ad tech to an array of others that focus on what they do. Which is refreshing, who knows though maybe in 5 or 10 years they’ll change their stance.

The news is a win for CTV and the open internet IMO.

In a pre earning note Piper Sandler did a survey of 2K US residents on the appetite towards an ad-supported offering: 49% No, I would continue with my subscription
23% Yes, I’d use an ad-supported tier
16% not sure I use someone else account
12% Yes, I’d unsubscribe and watch ad-supported

Post earnings:

Jefferies – “Password-sharing was cited as a vector to reaccelerate growth as well as the company being in the early stages of building an ad-supported tier. Details were light on both and timing is likely mid-2023 at the earliest for either (ad-supported possibly later).”

Oppenheimer “believe initiatives around password sharing and a potential advertising offering will take more than 12 months to develop…. Considering adsupported services for lower-tier plans and will utilize third-party services. We see advertising as accretive to revenue/profit if management deploys the proper pricing balance.”

Morgan Stanley – “Netflix is now making monetizing password-sharing a priority and plans to introduce advertising-supported tiers to reaccelerate revenue growth likely to start in '24E. We save this acceleration for the bull case for now, as we question how incremental these revenue opportunities are over the medium-term …

F o r N e t flix, it is less clear how incremental the revenue opportunity is from advertising in our view given how well Netflix already monetizes. We think over the long term Netflix can generate billions in advertising revenue, given in particular its massive scale in the US.For context, Hulu's SVOD business generates over $3bn in advertising revenues we estimate, with just over half the customer base and likely lower engagement than Netflix. However, in contrast to Disney Plus and Hulu, Netflixhas 75mm members in UCAN already generating over $15 in monthly ARPU with an expectation that was already ramping to over $18 by '24 simply through normal course price increases. As it migrates customers to an ad-supported tier at a lower price point, can it generate higher overall ARPU through the introduction of advertising revenues? This is less clear …

Netflix is just getting started on its advertising planning and we do not expectnew tiers until 2024 at this point.”

Separately there's a few more exhibits as of 11/04 that haven't been sealed (as yet?), painting a stronger picture now of the information LGA had on TRMR campaigns and email correspondence with P&G, OMG, Publicis and Horizonmedia (whom had rate cards upto $10mm+). LGA were pretty desperate to cutoff the data pipes before Fall '21 campaigns were locked in.

https://iapps.courts.state.ny.us/webcivil/FCASJcaptcha?forward_url=/webcivil/FCASSearch%3FtxtIndex%3D653266/2021%26cboCourt%3D60%26from%3DY

Hey SNN,

Seems like it beyond the point of initial consideration.

“one way to increase the price spread is advertising on low end plans and to have lower pricing with advertising and those who have followed Netflix know that I have been against the complexity of advertising and a big fan of the simplicity of subscription, but as much as I’m a fan of that I’m a bigger fan of consumer choice and allowing consumers who would like to have a lower price and are advertising tolerant get what they want makes a lot of sense. So that’s something we’re looking at now and we’re trying to figure out in the next year or two.” ~Reed Hastings Q1 Earnings interview

https://youtu.be/O1abP3Eo_RA?t=1004

“… phase in a couple years in terms of being material volume… online ad market has advanced … have people do all of the fancy ad matching and integrate all the data about people so we can stay out of that … getting monetised in a first class way by a range of different companies who offer that service … I’m sure we’ll just get in and figure it out as opposed to testing and maybe do it or not do it, I think we’ll really get in but again it will be a plan layer like it is at Hulu” ~Reed Hastings

https://youtu.be/O1abP3Eo_RA?t=1137

Tremor CEO Ofer Druker - Video, CTV And Data

https://seekingalpha.com/article/4489855-tremor-ceo-ofer-druker-video-ctv-and-data

Hey Dawg,

I sent them to g*********@g**-inc.com but I’ve just forwarded them to b*********5@gmail.com

Hey Dawg,

I’ve emailed you the notes, I assume your still on the same email.

Viant (DSP) is due to report on Thursday 12th.

Shame about the AGM being held in Tel Aviv…

https://sec.report/Document/0001193125-21-171330/

Resolution 11. Under Article 10 of the Articles, if the directors wish to allot any shares or grant rights over shares (other than pursuant to an employee share scheme and other specific events listed in the Articles) they must in the first instance offer them to existing shareholders in proportion to their holdings. There may be occasions, however, when the directors need the flexibility to finance business opportunities by the issue of shares for cash without a pre-emptive offer to existing shareholders, such as in the case of the proposed U.S. Dual Listing. This cannot be done under the Articles unless the shareholders have first waived their pre-emption rights. Resolution 11 asks shareholders to do this, and provides for non-pre-emptive allotments of up to 20,012,123 Ordinary Shares, representing approximately 15% of the Company’s issued ordinary share capital (excluding shares held in treasury) as at 24 March 2021 (being the latest practicable date prior to publication of this notice) until 31 July 2022 or, if earlier, the conclusion of the next annual general meeting of the Company, such authority to be limited to the allotment of equity securities, to be used only for the purposes of the U.S. Dual Listing

https://www.tremorinternational.com/wp-content/uploads/2021/03/TRMR-Notice-of-2021-EGM.pdf

SNN,

Thanks, appreciate the comments.

My view is the share price is just taking test flights at the minute, I suspect the real launch date will be upon the IPO. We shall see.

Can’t say I’d be too disappointed if the price holds for a couple weeks I’d like to get a reasonable amount into the coming ISA allowance.

Re Pixalate’s ranking:

They are still listed as a partner on the 1R website (along with DV) so I can’t see any suggestion that DV is in place of Pixalate (It may be TRMR still use Pixalate for some services or in some areas).

I won’t speculate on the argument they favor those with commercial relationships and they are MRC accredited (of which Pixalate and DV are the only companies currently accredited for CTV measurement & fraud by the MRC).

BUT and it is a big but, how Pixalate can verify ad impressions of a company that they don’t have a relationship with and get a holistic picture seems to be a mystery. Where a partner has a relationship with Pixalate, DV, IAS, Moat etc they will be included within the ad tag that allows them to analyse the URL, page etc. I don’t think anyone in the industry takes their ranking very seriously.

SpotX recently had a bust up with Pixalate over it though:
https://www.spotx.tv/resources/blog/spotxer/how-to-truly-assess-ctv-sell-side-platform-quality-and-why-companies-like-pixalate-dont-see-the-whole-picture/

Pixalate’s response:
https://blog.pixalate.com/ctv-360-pixalate-ctv-seller-trust-index

SNN,

Thanks for posting the links, the Pixalate report is very positive.

Essentially it is saying that Unruly has more direct relationships/contracts with app developers/publishers on Roku than any other SSP. In Q3’20 49% of all OTT/CTV programmatic spend was on the Roku platform...

Ads.txt
The IAB introduced ads.txt in May ’17 with the aim to prevent unauthorized inventory sales and specifically deal with domain spoofing and arbitrage inventory. Publishers (or the app developers in this case) publish a text file that states who they have relationships with and the nature of the relationship.

Direct = The publisher has an account/relationship with the SSP and directly controls the account. It generally means there is a contract in place between the publisher and SSP.
Reseller: Publisher has authorized another entity (SSP / ad network) to control the account and resell their ad space

Ultimately along with sellers.json (hosted by the SSP/exchange) it allows the demand side to authenticate the legitimacy of the inventory and those selling it. I’ve not seen any reports around how effective ads.txt at achieving its purpose and sellers.json followed to strengthen it though one issue with it is in some cases SSPs and ad networks have been known to ask publishes to incorrectly list them as direct.

All Pixalate have done is scrapped all of the app.ads.txt files on Roku devices and ranked SSPs by the number of direct relationships with Unruly coming out top with the largest direct footprint. Jounce Media does similar ads.txt analysis and reporting on the web.

The feast is just starting, bread and honey is the only thing on the menu and there’s lots of servings to come.

Astonishing growth. Am interested if this will translate to Q1 beats across the pond especially for TTD.

Dawg, you may want to buy some new sheets...

Tricky, they’ve not announced they are issuing new shares, I have simply speculated that they may do in order achieve the desired liquidity for the Nasdaq listing. There are 133.4mm ordinary shares and 29mm Treasury shares which is 17.8% of the total. Purely as an example if they wished to have 50% of the ordinary shares held with the depository bank then they would need to acquire 52.5mm of the ordinary shares through a tender offer, if the tender fell short the balance would have to be issued which would result in dilution but (hopefully) offset against a much higher share price and Tremor sitting on the proceeds. GW, I assume you were getting at the same angle?

Post IPO you could contact your broker and have your ordinary shares converted into ADR’s, likewise ADR’s can be converted back. The number/limit of ADR’s the depository bank can issue is outlined in the F-6 and when they get close to the limit they will normally issue a replacement F-6 to increase the limit. This is how AIM liquidity has dried up in some cases resulting in a de-listing.

Regarding IPO ‘overallotment’, it can be used to raise more capital on an oversubscribed IPO but is also a price stabilisation mechanism where the underwriters have the option issuing up to 15% more shares than were planned. E.g. the offering could be for 100mm shares but the underwriter sells 115mm shares putting them in a short position, if the price rises from the offering the underwriters can exercise the option with the company to issue the shares. If the price falls the underwriters can buy back from the market instead, closing their short and stabilising the price to stop it falling further.

Ideally an IPO would be priced at a level where it is sufficiently oversubscribed that there is a small ‘pop’ from the offering price to reward those taking part, if an IPO is significantly oversubscribed it generally means it has been priced badly and the founders/investors issuing the IPO could have either raised more capital or retained a larger holding. Royal Mail being an example where retail investors that applied for more than £10k didn’t get an allocation and the price rose c.35% on conditional trading – Gov took a grilling.

Dawg, while speculation is... I can’t imagine that this placing will look anything like the BLNX ADR’s not least because the primary reasons for doing so are clearly on the basis of achieving significant liquidity be it to narrow the gap with peers or have access to future US capital. Re Stifel, after being joint broker for 6 months you’d hope they’ve earned their fees.

P.S. Please do tell Andy I said hi, last time I spoke to him he did intend to ride a small amount out in his 401k. And congrats on the Idaho project.

Also slight correction to my 1am post yesterday, I forgot about Brexit, EU MAR has been superseded by UK MAR though I believe is, currently, pretty much a carbon copy - in any case the sentiment still stands.

SEC bulletin re ADRs:
https://www.sec.gov/investor/alerts/adr-bulletin.pdf

As far as I can see Dawg is right re the necessity to IPO
L1 ADR – Possibly unsponsored – Only traded OTC – No info on EDGAR - Can’t raise capital
L2 ADR – Sponsored – listed on an exchange – must file annual reports - Can’t raise capital
L3 ADR – Sponsored - listed on an exchange – must file annual reports – Used to raise capital.

Level-II ADRs
Foreign companies issuing level-II ADRs are mandated to fulfill all registration and reporting requirements imposed by the SEC. This includes submitting the company's F-6 registration statement, SEC Form 20-F, and annual financial reports prepared in line with either generally accepted accounting principles (GAAP) or international financial reporting standards.

Companies must also comply with the Sarbanes-Oxley Act, which requires accounting and financial disclosure, as well as other reporting standards. Level-II ADRs are allowed to be listed on a major U.S. stock exchange such as the New York Stock Exchange or the Nasdaq Stock Market. Level-II ADRs provide the issuing foreign company greater exposure in the United States without needing to complete a public offering.

https://www.investopedia.com/ask/answers/041015/what-are-differences-between-levels-i-ii-and-iii-american-depository-receipts-adrs.asp

TRMR registered with the SEC on the 5th so god only knows what the BOD and advisers were thinking signing off on the “time to time” comment in the results RNS. It took the SEC 20 days from GAN’s draft F-1 submission to publicly respond so we may see a response mid Apr.
https://sec.report/CIK/0001849396

Not all that relevant but VRP recently delisted on AIM as >90% of their shares were held in ADS form from <50% at closing of the offering in May ‘17. Aim Investors had to convert their ordinary shares to ADSs.

I do wonder why they have chosen to go down this path rather than delisting from this cesspit like GAN and saving listing and Nomad costs and resources of being listed on both and having to comply with FCA disclosure rules, EU Market Abuse Regulation etc. I also wonder how large the tender offer will be and if there will be a mix of treasury + tender + dilution.

Re Thornton’s comments, One would hope that Stifel already has a reasonable gauge on US interest.