Member Info for stt1

Notbot
" this could likely have been passed post the repricing in March"

I don't think that is the case.
The sp went to 700p on Feb 15th. Tosca sold some.

On 12th March when they reduced further, a day after the fy results, the sp was significantly lower (than Feb) at 586p-616p
https://www.tremorinternational.com/wp-content/uploads/2021/03/TRMR-Holdings-in-Company-150321_Toscafund.pdf

One week before the results the sp was 580p-600p, similar to the day the results were published, so the price hadn't moved up as Yield suggests.

https://uk.finance.yahoo.com/quote/TRMR.L/history?p=TRMR.L

Both IBEX and Tosca reduced 1-2 days after the results were published.

To backup my stance about the questionable timing (I think they are desperately trying to list before H1 results), ie Alphonso court case, overhang and placing.

In March they announced Q1 expectations, 10 days before Q1 end.
https://www.tremorinternational.com/wp-content/uploads/2021/03/TRMR-Trading-Statement-220321.pdf

However, in this week's TU there was no mention of Q2 expectations(even if it's a month away, you would expect some mention of Q2/H1 expectation).
I think Q2 may have been impacted by trmr losing LG contract, due to the Alphonso court case. It might explain the placing.

https://www.tremorinternational.com/wp-content/uploads/2021/05/TRMR-Q1-2021-Trading-Update-250521.pdf

SNN
"SP settling at 8.00 sterling."

If the listing price is set at £8 then where's the upside?
The hope would be that the shares list at a premium, which is possible. There's also the arb in play between the US/UK price

The real problem I see is that PIs will be anxiously looking at the US market to gauge a reaction for UK price following morning.
As can be seen at the moment...

Pubm down a further 8% today at $31.30 - was $69.92 1st March
Magnite down 1.7% at $29.58 - was $62 12th Feb

Both down over 50% in 2-3 months. My post bout Ad Tech Bubble was in Jan.

1gw,
"yet you have repetitively been posting 2020 figures"

The fy2020 audit figures are the latest fy results available. Feel free to post the fy fy2021 lol

The 2019 debt provision of $22m was shortly after Sizmek filed for Chapter 11 and are relevant to gauge the impact of a major ad tech company filing for Chapter 11, as DSPs/SSPs partner with each other.

You know perfectly well you can't base a recovery on 1-2 qtrs, especially as those Qtrs include the US Election and there is now a court case which could impact trmr going forward.

I would have thought you would have learnt about basing your assessment on 1-2 qtrs figures by now.
Remember when rthm(now trmr) posted their H1-2019. It showed great improvement, yet I said at that time as well " I think it's too early to assess whether they have turned the business around.

I've re-state my conviction.
Read your and my posts under "rthm interims"

https://www.lse.co.uk/ShareChat.asp?ShareTicker=RTHM&share=Rhythmone-Plc&page=10

If I doubted it then (and was proven right), why should I change my stance now?
It maybe different this time but we won't know for a while.

1gw,

Those figures are during the hotly contested US Election and whilst LG were a data provider. Can you post Q2 expectations?

The figures which matter will be Q2/H1.
They were quick to publish the Q1 expectations early.

Why didn't they mention Q2 in this week's TU?

Q1 expectations published 10days before Q1 end.
https://www.tremorinternational.com/wp-content/uploads/2021/03/TRMR-Trading-Statement-220321.pdf

No Q2/H1 expectations mentioned in this week's TU...
https://www.tremorinternational.com/wp-content/uploads/2021/05/TRMR-Q1-2021-Trading-Update-250521.pdf

They are desperately trying to list before H1 results are published.
Placing.
Court Case.
Overhang.

1gw
"Out of date stt1"
"Look at 2H FY20 and 1Q FY21 to see how the business is performing. "

It's the latest fy results there are.
Looking at H2-2020 and Q1-2021 is pointless. It includes the hotly contested US Elections and the LG-Unruly partnership, which was signed in Nov but, given the Alphonso lawsuit, is now likely to be over. Therefore, Q2/H2 is important.

Also as you'll remember, you were ultra bullish when rthm(now trmr) was at eq sp of 590p, in 2017, when they announced a 11 fold increase in adj ebitda.
This included the previous US Elections.

What happened??? The sp fell towards 100p based on events, as expected.

https://investor.rhythmone.com/assets/pdf/RTHM_FY2017_ResultsRelease_15May2017.pdf

You were also ultra bullish when rthm(now trmr) announced their increased cash generation in 2018, just before the 2019 merger with trmr.
What happened? Trmr issued a profit warning a few months after merging with rthm, closing several of their operations.

https://www.tremorinternational.com/wp-content/uploads/2019/09/TRMR-Interim-Results_Final-240919.pdf

Radium,
"Yield’s background is in Capital Markets. His experience provides a welcome intellectual counter to the raison d’etre of our long-standing resident antagonist."

How do you know Yield's(a poster who created his profile yesterday) experience is? Reading his post, he also implies he's knowledgeable about the ad tech model and trmr. You'd have to be naive to believe a poster, who created the profile yesterday and hasn't posted any evidence to back up his stance.

However, I agree, it would be good to have a proper discussion, bull/bear points for a change, given the lack of it so far.
It would benefit all readers to form their own opinion, as it's their money.

In reply to the points raised post:

1. "you'd know that the F-1 and other relevant submissions takes months to produce. "
Exactly, that's the point. They would have known weeks in advance that they were going to FILE the draft registration. Yet they stated only 6 days before the registration that they were 'continuing to explore'. I see that as a contradiction and a bear point. The timing is too much of a coincidence when looking at the Alphono dispute/court case.

2. Data providers pulling out. "But again, its not like there aren't any other data providers out there"
ROKU and LG are 2 of the BIGGEST CTV data providers. This can have a big impact if big providers are lost and given the lawsuit they are likely to have lost the LG partnership, the consequence of which won't be known until after the US listing!!

3. Tosca selling out. "there cN be many reasons for it."
Tosca have held 29%. They have held for years, so, if IIs see value then why sell just WEEKS from the US listing?. Again, there recent sells were post the fy results, when I believe the Alphonso dispute would have been known about.
Not forgetting the CEO also sold 1/3 of his holding. Does he not 'know the value'?
4. Huge debt provision. "In case you haven't noticed, we are coming out of a crisis"
What crisis? Clearly Yield doesn't know when the huge 11 fold increase in debt provision was, ie fy2019 - there was no pandemic then.

5. Listing because of lawsuit. "If this were true, they would just have waited on the lawsuit (which they filed) until the dual listing was done."
This shows Yield is ignorant about processes. There are time limits for filing as well as any delays means delays to the outcome and money. If they are aware of a dispute they would have been legally obliged to mention it in the US listing filing anyway. That's standard.

Solid financial performance. What solid financial performance?. They have a history of missing expectations, as I've previously posted.

Having countered the 'bull' points, for me, it makes the bear case stronger.

1gw
"Difficult to discern any cashflow problems there, isn't it?"

Despite including the 1st fy contribution from Unruly(2019 NIL) and rthm(2019 8 months), they reported lower cash from operating activities compared to 2019.

The company themselves stated, from which it is clear they not paying dividends (despite previously doing so) because they are retaining cash to finance operations.

"Net cash from operating activities of $35.2 million (2019: $45.1 million) mainly due to working capital requirements during record H2 and Q4 2020 performance"

"Although the Company have paid dividends and share buybacks in the past, the Company does not anticipate paying any dividends in the foreseeable future. The Company currently intend to retain future earnings, if any, to finance operations and expand its business. "

https://www.tremorinternational.com/wp-content/uploads/2021/03/TRMR-Final-Results-100321.pdf

They also reported:

Total net revenue increased by only 12% to $184.3 million (2019: $164.0 million). Only $20m!!
Adj Ebitda up only £100k(2019 $60.4m)

These figures include a full year contribution from Unruly(2019 nil) and rthm(fy2019 8 months)

""The Company traded strongly during 2020 as a whole, achieving a 12% increase in net revenues to 184.3 million (2019: $164.0 million), primarily driven by the performance of our Programmatic activities generating an increase of 30% to $161.6 million (2019: $124.2 million) as a result of our strategic shift to focus on our Programmatic activities as a key growth driver""

Check the table in the results - fy2020 inc full year from Unruly & Rthm.

Revenues up ONLY 2%
Net revenues up ONLY 12%
GP up ONLY 10%

https://www.tremorinternational.com/wp-content/uploads/2021/03/TRMR-Final-Results-100321.pdf

Also in the fy results, the company themselves reported lower net cash from operating activities due to the record H2 and Q4....

"Net cash from operating activities of $35.2 million (2019: $45.1 million) mainly due to working capital requirements during record H2 and Q4 2020 performance"

"Although the Company have paid dividends and share buybacks in the past, the Company does not anticipate paying any dividends in the foreseeable future. The Company currently intend to retain future earnings, if any, to finance operations and expand its business. "

https://www.tremorinternational.com/wp-content/uploads/2021/03/TRMR-Final-Results-100321.pdf

Therefore, I that backs up my opinion that they NEED cash for working capital purposes, pay inventory suppliers. Hence the placing..

"Brands and agencies often pay DSPs on 90-day or even 120-day cycles. But DSPs pay SSPs between 30 to 60 days."

"DSPs shoulder this burden directly because they constantly owe money to inventory suppliers. The Trade Desk took out a $200 million loan in 2017 to preserve liquidity while it bridges inventory payments. MediaMath has raised more than $600 million, including $225 million last year."

https://adexchanger.com/online-advertising/sizmeks-bankruptcy-is-changing-how-the-supply-side-manages-dsp-debts/

Mdumba,
"The board will have been required by the NOMAD to make clear that the contemplation of a potential US listing is no guarantee that the listing will complete"

They said in their fy results they continue to explore FROM TIME TO TIME.
Yet ONLY 6 days later they file the draft registration. Given they were continuing to explore FROM TIME TO TIME, they were not intending to file a draft registration only 6 days earlier.

It's in their rns.

On 10th March, they published the fy account, without firm mention of US listing, they simply said:
"The Company continues to explore, from time to time, the possibility of transactions in the capital markets, including the potential for a dual-listing of shares in the United States. No assurance can be made that any such transaction will be completed in the near term or at all."
https://www.tremorinternational.com/wp-content/uploads/2021/03/TRMR-Final-Results-100321.pdf

Yet ONLY 6 days later on 16th March , they published their draft registration for a US listing:
https://www.tremorinternational.com/wp-content/uploads/2021/03/TRMR-Submission-of-Confidential-Draft-Registration-Statement-for-Proposed-Offering-160321.pdf

Alphonso court case was filed a few days ago. It's common for partnerships to try and resolve their disputes before going to court. Given it can takes weeks for mediation, it seems quite likely the dispute was there in March.

"your weak attempt to say this is a sign of having working capital issues even with 130m cash at bank "

It's not a weak argument. It's a fact.

Ad tech companies need huge cash piles because of the way inventory payments work. Requiring huge cash piles is normal for Ad tech, even The Trade Desk had to raise $200m.

The ad tech model works by DSPs/SSPs, partnering with each other. It is usually the case that the company would pay their 'supplier' (other ad tech companies) around 60 days but receive their cut from 'customers' (other ad tech companies) around 90 days. That gap("inventory payments") has to be covered from their own cash or they setup credit facilities.

"Brands and agencies often pay DSPs on 90-day or even 120-day cycles. But DSPs pay SSPs between 30 to 60 days."

"DSPs shoulder this burden directly because they constantly owe money to inventory suppliers. The Trade Desk took out a $200 million loan in 2017 to preserve liquidity while it bridges inventory payments. MediaMath has raised more than $600 million, including $225 million last year."

https://adexchanger.com/online-advertising/sizmeks-bankruptcy-is-changing-how-the-supply-side-manages-dsp-debts/

As the article shows, the need for a huge cash pile became more important when Sizmek filed for Chapter 11 bankruptcy. I think Sizmek's Chapter 11 was the reason trmr's debt provision increasing 11 fold to $22m in 2019.

Brubru
The LG partnership was signed in Nov 2020.

Trmr stated that strong trading continued in Dec, so post the deal.

The need for a US listing became urgent around March time... The Alphonso court case filing was last week. Therefore, they would have known many weeks ago, maybe March, of the dispute with Alphonso. Companies try and resolve the differences before taking court action.
So I think once the dispute with Alphonso was known they felt the need to US list (with the placing) asap. I think because the process to list was the reason behind the early Q1 TU (10 days before Q1 end).

On 10th March, they published the fy account, without firm mention of US listing, they simply said:
"The Company continues to explore, from time to time, the possibility of transactions in the capital markets, including the potential for a dual-listing of shares in the United States. No assurance can be made that any such transaction will be completed in the near term or at all."
https://www.tremorinternational.com/wp-content/uploads/2021/03/TRMR-Final-Results-100321.pdf

Yet ONLY 6 days later on 16th March , they published their draft registration for a US listing:
https://www.tremorinternational.com/wp-content/uploads/2021/03/TRMR-Submission-of-Confidential-Draft-Registration-Statement-for-Proposed-Offering-160321.pdf

That tells me there was a sudden need to list with days of the fy results being published.

The Alphonso court case and why it is likely to impact Trmr.
I think Trmr are desperately trying to list in US before H2 figures are published.

On 10th Nov 2020, Unruly signed a deal to offer Smart TV Inventory.

Unruly and LG Electronics to Offer Smart TV Inventory Through Global Partnership
https://unruly.co/news/article/2020/11/10/unruly-and-lg-electronics-to-offer-smart-tv-inventory-through-global-partnership/

On 6th Jan LG took a controlling stake in Alphonso, who were providing data to Trmr - renamed as LGAds.
https://www.businesswire.com/news/home/20210106005916/en/LG-Acquires-Controlling-Stake-in-TV-Data-and-Measurement-Firm-Alphonso

22nd March - Trmr surprise with Q1 TU, 10 days before Q1 end and days later announce the US listing.

This week, the say they are took legal action against Alphonso on 18th May.
https://www.tremorinternational.com/wp-content/uploads/2021/05/TRMR-Q1-2021-Trading-Update-250521.pdf

Given Alphonso is now LGAds and trmr has issued court proceedings, it is likely trmr have lost the access to Alphonso/LG.

LG are one of the BIGGEST CTV data sources around. I think losing one of the biggest data sources will impact trmr from Q2 onwards.


Roku bought DataXu. Rthm(now trmr) already took them to court in 2017 over opaque fees. They settled out of court.

There aren't that many CTV data sources around that Trmr can afford to lose.
"Roku (which bought DSP dataxu), Comcast (which bought DSP Beeswax), WarnerMedia (which bought AppNexus) and LG (which bought a controlling stake in Alphonso). Hulu built an ad server Disney plans to use across all of its media. Amazon uses its own tech. YouTube is only accessible through Google’s DSP."

https://www.adexchanger.com/tv-2/programmatic-meet-ctv-ad-techs-latest-gold-rush/

I think it explains their desperation since March to list and before H1 results.

It could also explain the need for the placing to raise cash for working capital.

I think the impact will become known in Q2/H2 when compared against Q1 and not Q2/H2-2020.

An articles from WhatMortgage:

Warnings of property market crash as house price growth hits double digits
"Conveyancers ‘overwhelmed’
But many believe the current buoyancy will not last and have predicted a correction is on the way later in the year.

Lloyd Davies, managing director of legal practice, Convey Law, said the property market could ‘fall off a cliff soon’ when the ‘rush to complete’ before the stamp duty holiday died down.

And he revealed how solicitors dealing with property transactions had seen a rise of around 30% in volumes, triggered by the Stamp Duty holiday. This had impacted the speed of the conveyancing process and put huge pressure on an already overwhelmed property industry.

He warned: “Currently, buyers are rushing to complete before the end of the Stamp Duty holiday in June to potentially save thousands of pounds.

“The government has already acted to taper some of the savings until September but that will not be enough for many purchasers.

“I believe we will see aborted transactions and disappointed house buyers this summer and autumn unless the government looks at a much longer form of SDLT tapering.”"

https://www.whatmortgage.co.uk/housing/warnings-of-property-market-crash-as-house-price-growth-reaches-double-digits/

Krusty,
"Viewings and completions are rising rapidly (based on HMRC records), house prices are still rising way above the rate of inflation (10.2% year-on-year in March, according to Land Registry) "

Viewing and completions are rising to beat the new Stamp Duty Hol deadline. The same happened prior to the previous deadline.

House prices have been rising. However, not New Build prices, which have been falling:

Official Gov figures:

Dec:
Look at the figures, avg new builds prices falling on quarterly basis, in UK & London.

Average prices plus annual increase:
UK: £251,500, up 8.5%
New Builds: £327,486, up 6.3% (qtr change -0.7%)
Existing: £258,708, up 5.6%, (qtr change 1.1)

London: £496,066 up 3.5%
New Builds: £505,833, up 3.4% (qtr change -2.1%)
Existing: £492,362, up 4.4% (qtr change -0.7%)
https://www.gov.uk/government/news/uk-house-price-index-for-december-2020

Jan:

New Build prices in Jan were down 0.8%
https://www.gov.uk/government/statistics/uk-house-price-index-scotland-january-2021/uk-house-price-index-scotland-january-2021

Sharenicely,

"Tremor, being unique in having a full stack, including a full data management platform, is bringing more of the data side in house."

Exactly, good to see someone else has now recognised that Trmr's business model is different from their 'US Peers'.

As previously posted:

Rthm(now trmr) had been operating a full stack for years. They had been making losses for years.

Telaria demerged from Trmr(TAP) because of the full stack model.
Why did Telaria ditch trmr and merge with Rubicon to form Magnite?

Below are Telaria and The Trade Desk's comments on operating the one side of the ad tech model.

Telaria (Magnite) reasons for demerging from trmr(TAP). perceived conflict of interest

"Clients were also uneasy with Tremor servicing both the buy- and sell-sides."
"There's always been a little bit of friction because we were selling agencies and advertisers different products while we were representing publishers," Zagorski said. "And the people who plug into that sell-side platform would always be somewhat hesitant to commit to it in a huge way because we had that perceived conflict."

https://adexchanger.com/digital-tv/tremor-video-sells-demand-side-business-taptica-50m/

****************************************************************************

The Trade Desk (TTD) previously quoted as saying that their one sided approach was the key to its success...other companies have also ditched both sides...

"Many companies that tried to run ad tech businesses on both sides later have sold one side off: Rubicon shut down buy-side platform Chango, with then-CEO Frank Addante admitting the acquisition was a failure. Tremor Video just sold off its buy-side business to focus on the supply side. Amobee sold its sell-side business to focus only on the buy side. The Trade Desk, which has seen its stock skyrocket post-IPO, consistently cites its single-side, agency-focused approach as a key to its success."

https://adexchanger.com/platforms/appnexus-buy-side-falls-wayside/

If anyone thinks the Alphonso court case isn't significant, do some research.

Bear points.
Court case.
Placings.
Overhang.

From the rns'

Court Case:
"On May 18, 2021, Tremor Video, Inc. (“Tremor”) filed a complaint against
Alphonso, Inc. (“Alphonso”) in the Supreme Court of the State of New York,
County of New York. The claim is for breach of contract, tortious interference
with business relations, intentional interference with contractual relations,
unjust enrichment, and conversion. The lawsuit arises out of Alphonso’s breach
of a Strategic Partnership Agreement and an Advance Payment Obligation and
Security Agreement (“Security Agreement”) with Tremor, along with related
misconduct. Tremor complaint is for damages and other relief, including an
order foreclosing on Alphonso’s collateral under the Security Agreement, from
the Court."

https://www.tremorinternational.com/wp-content/uploads/2021/05/TRMR-Q1-2021-Trading-Update-250521.pdf

Ginodog
"Completely ignores that Magnite, Perion, TTD are up between 100%-200% over the year. Just picks and chooses his points of reference to suit his agenda."

That's not the case.
The reference points I use are when I started posting that the US ad tech companies are in an Ad Tech Bubble, which was from Jan this year.
https://www.lse.co.uk/profiles/stt1/?page=19

Why would I use a reference point prior to my earliest mention of Ad tech bubble??.

Can you show me a post from a year ago where I stated the US Ad tech companies are in a bubble?

If you look at Magnite, Pubmatic etc they have fallen around 50% over the past 2-3 months and post my suggestion of a US ad tech bubble.
ie Magnite peak was 11th Feb sp around $62, now around $29.
11th Feb is only weeks after I initially said US Ad Tech companies are in a bubble.
QED.

Still no discussion on the company or the sector, just the messenger. How strange?

Pubm, down 4%, down 41% on the month
Magn, down 2.6%, down 26% on the month.

Backs up my stance that they are desperately trying to list before the US market gets any worse.

Ginodog,
"STT - thanks for telling we what my position is. For full disclosure my average is £7.70. So I’m now 6.4% up"

No problem. Well done for reaching 6.4% profit, even if it took 7yrs!
The rthm(now trmr) eq sp is now back to where it was in 2014 after the Jan sp crash from £28 and before the July 2014 profit warning.
It is around 200p higher than the rthm(now trmr) eq sp reached in Apr 2017, just after the previous US Election, before falling back on events.

Do you think it will crash again like it has done several times before?

The ad tech model is the same as rthm, the industry challenges have increased over the past 3 yrs, new court case, overhang, placing, US ad techs overpriced.