Is there a seasonal bias? 26:11
Is a dividend likely in the future? 26:49
With Cyber Ghost, what is your differentiating factor? 27:39
Is IoT useful to drive concerns amongst a new consumer base or are there new products you can develop in this area? 28:50
No new CEO, Don clue*ess, an IPO flop from the very start. Investors have been taken for a ride and Teddy S majority shareholder should now tender for the few shares he doesn't own and put this poor excuse for a company out of its misery
The sector bombed out. The advertisers were getting legged over by the likes of Crossrider, marimedia (now Taptica), Adgorithms, Blinkx etc as each in their different ways were directing traffic for their own gain and a lesser extent the advertiser. Then adblocks went mainstream on PC's, so advertisers just walked away to a large extent, thus the decline in revenues. The new holly grail is mobile, but how long this will last, with adblocks uptake for mobiles stats going through the roof, is difficult to predict. Something has to charge otherwise most of the web publishers (like interactive investors) will go out of business, as advertisers keep them alive. Also where does the digital advertising business go from here? It's not going to disappear, but will end up being smarter about it and Crossriders and others will just have to get smarter and stop going down the adware route.
As for Crossrider it has around £50m in cash and still has a business generating cash. The market is valuing its existing business a more or less nothing. This is obviously wrong as the business should still generate cash for many years to come.
What happens next is up to Teddy Sagi, as the majority shareholder. From my calculations he has put about £29m of his own cash into it (the rest of the £18m he capitalised when IPO'd was froth). He could tender for the remaining shares he doesn't own (i suspect he would pay quite a lot above cash value and still be quids in, as he would only have to tender for 22%) or use the cash to change direction of the business (perhaps why CEO left). He could delist, but this would be very bad PR, as it would look like he has shaft**ed investors, on a very poor IPO, and he would be the only one gaining - remember he has a large stake in Playtech, Market Tech and majority holding in Safecharge.
I have a modest holding at the current level, as I think the situation is madness and the business is still generating cash and it could use its technical know how in other markets (Playtech uses its platform).
Most probably wrong. We'll get a better steer on what's going on 15th of this month.
Now trading at below net tangible asset value, so have picked up a few. Always dangers with majority shareholder, but wouldn't do TS image much good for his other listed companies if he did something daft. Anyway with the the cash balance he would likely have to do a tender for the shares he doesn't own. Hopefully me will become CEO/non-ex chairman and bring some confidence back into the biz and do something else with it.
Ok not the most exciting sector, but still expected to do EBITDA of $10m for FY15 and $12m FY16. Can't see Teddy Sagi (Playtech) tolerating this situation for too long. EV/EBITDA 1x for FY15 and 0.8x FY16
Crossrider+ (CROS) Full year trading update, positioned for growth House Stock at 107p
Strong revenue growth
The ad-tech platforms and data specialist for monetising Web and Mobile media announces this morning that revenue growth through to the end of the year in December continued to be strong, confirming that results will be ahead of original expectations on the IPO (the company floated on AIM at the end of September, raising US$75m before expenses). Crossrider now indicates a revenue figure of cUS$71.0m for FY2014F. This compares to our upgraded forecast of US$69.7m, made post the earlier trading update given on the 18th December, and our original figure on IPO of US$64.3m.
At the technology frontier
The full year trading update indicates continuing strong organic development driven by the web division and 'app' distribution activities. Mobile activities continue to develop and grow also, with ad-serving and ad-exchange capabilities expanding; the company's Ajillion platforms remain at the technology frontier of this industry, in our view. We expect strategic development in mobile to continue apace.
We retain our current operating and earnings forecasts for Crossrider for the present for FY2014F and FY2015F, noting that the business remains strategically positioned within the ad-tech space for growth. Whilst detailed information on last years performance will be given in the results presentation, along with guidance on the outlook, Crossrider has given some clues in the trading update on its views on current market conditions for the company: The Directors remain confident in the execution of the Groups strategy of increasing traffic to its platforms, improving the quality of its data insights and expanding into new geographic regions through investment in accretive acquisitions and its existing operations.
Strong balance sheet offers potential
With a strong balance sheet (with cUS$72m of net cash) offering the potential for acquisitive development, upgrade potential remains positive in our opinion. We look forward to reviewing our forecast expectations in this light on the publication of the full year results on the 10th March.
Based on our current forecasts, Crossrider is trading on a current year (FY2015F), EV to sales multiple of 1.6x. This years EV/EBITDA multiple of c18.9x falls back to 10.6x in FY2016F, continuing to fall rapidly thereafter as profitability sharply accelerates a maturing operating margin profile is also expected to accelerate cash generation. The deployment of balance sheet resources could, of course, rapidly accelerate the development of the business in this highly valued segment of the market. House Stock.
+Shore Capital and Corporate is financial adviser to Crossrider and Shore Capital Stockbrokers is broker. As part of its conflicts of interests policy Shore Capital does not make a formal recommendation on house stocks.
Surprised this was published yesterday on a Friday. Norm is for companies to RNS the bad news on a Friday when the City is relatively quiet and push the good stuff out on Monday through to Thursday when it is more likely to get noticed. Whatever this looks pretty impressive to me - revenue growth is clearly strong. Not sure what is forecast for EBITDA. Anyone any ideas?
Bought a few last week.
An interesting company by many measures. The notes below may be of use to those looking at the Company for the first time:
Crossrider optimizes Internet surfing traffic, primarily for analyzing the digital ad market.
Crossrider, controlled by Teddy Sagi, raised $75 million in its IPO on London's AIM Stock Exchange on Friday at a company value of $250 million, after money. This will be Sagi's third company trading in London after Playtech Cyprus Ltd. (LSE:PTEC) and SafeCharge International Group plc (AIM: SAFE).
Shore Capital investment bank led the offering. After the offering Sagi is left with a 56% holding, the company's employees hold 14%, and the public now holds 30%.
Sagi acquired Crossrider for $37 million in 2013, only 20 months after being founded by CEO Koby Menachemi and CTO Shmueli Achdut in 2011, This means that Sagi has made quintuple his investment (before money) in the company. Even when the fact that Crossrider made two acquisitions (Israeli companies Ajillion and Definiti Media) for $15-20 million in May this year, after Sagi's acquisition is taken into account, Crossrider was offered at three times the investment in it, still not bad for a start-up that did not exist until the spring of 2011.
When it was founded, Crossrider focused on creating a platform for developing Internet browser applications. Since its acquisition by Sagi, however, and especially after completing the two above-mentioned acquisitions, Crossrider has specialized in optimization of Internet surfing traffic, primarily as a tool for analyzing the digital advertising market, which has made giant strides.
Crossrider disclosed its financial results for the first time, showing $15 million in revenue in 2013 (before the acquisitions of the Israeli companies) and $29 million in the first half of this year (including the acquisitions). It predicts its revenue in 2014 as a whole will reach $68 million, reflecting a 2.6 revenue multiple, before money. Like many companies in its field, Crossrider is making a profit; its EBITDA was $1.5 million last year and $8 million in the first half of 2014: an EBITDA margin of 28% and an estimated EBITDA multiple of 10, or even single digit, before money.
The company also said that it has recently set a new record of 150 million active users last month, and 1.8 million new users daily. At any given moment, Crossrider has 25,000 live campaigns by its customers. The company has 140 employees, mostly in Israel.
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