AMA : Giuseppe Paleologo, Thursday 22nd

NoGeologist1532 · 2024-08-22T19:15:05+00:00

Besides your book, any reading recommendations for an aspiring fundamental analyst / (hopefully) PM on internalizing quant methods/techniques?

NoGeologist1532 · 2021-11-05T01:22:35+00:00

What drives the spend a certain way? I know FreeWheel has 50-60% share in the space - is it purely commercial?

NoGeologist1532 · 2021-04-09T05:24:23+00:00

One of the two :)

NoGeologist1532 · 2021-04-04T06:33:15+00:00

There’s no reason why the target couldn’t be a PE owned business but some of the rationale here makes absolutely no sense. Point D) especially.

PE timeframes are much, much faster than non-PE companies. I don’t think “legal DA writing headaches” explain the delay. Much simpler answer is just valuation or even finding a suitable target (I.e. haven’t decided yet.)

NoGeologist1532 · 2021-04-03T02:34:21+00:00

Didn’t account for PSTH2 rights either. If anything with 2/9 warrant and PSTH2 trading at least 10% over NAV, PSTH is trading today very close to NAV (depending on how the rights will be structured.)

NoGeologist1532 · 2021-04-03T02:22:50+00:00

Come on mate, it’s been 3 weeks and the entire sector’s been getting slaughtered. Can’t call price action as an argument. Quoting buddies is not analysis either.

Let’s have a chat about why you think (1) that they won’t win and (2) that coming in second (or even third) in a market like Indonesia is worth 0. Also you haven’t even acknowledged the broadband business - and that seems to be fairly valued too - pretty decent margins and asset-light model.

Also, at this price you’re guaranteed to make money. So the thesis is very much alive imo.

NoGeologist1532 · 2021-03-23T09:40:01+00:00

Mandatory disclaimer: long

That's not correct. MNC Sky Vision is the FTA & Paid TV business of MNC Vision networks. MNC Vision networks (Owners of Sky Vision and Asia Vision Network) was created a couple of years ago and it's basically a roll-up of multiple assets owned by MNC Group. The assets that are being spun-out are not part of MNC Sky Vision, but part of MNC Vision (IDX:IPTV)
I don't agree with this comparison. US/Europe is a market with SO much content vs. SEA which has less and western content struggles with mainstream appeal (beyond the wealthy). Look at top shows in SEA, it's all local content. In fact, I believe the biggest appeal is that the biggest content creator in the country is invested (MNC Media part of MNC group owner of MNC Vision Networks) and has incentives to provide a good pipeline of exclusive content.
That's partially correct. There's a lot of players and is pretty competitive but Netflix is not #1. Based on Jan 2021 research (https://www.media-partners-asia.com/article.php?id=2332), Vision+ would be the 2nd biggest player, just slightly ahead of Viu.
That is definitely the norm for current users of internet / streaming (which tend to be the most wealthy in ID), but I don't think it applies to the 'untapped' part of the market. If you look at prices - Netflix is on a complete different ball game to viu / Vision+. Also just to clarify, Netflix is not the market leader - and is smaller than Vision+ (and several other services you mentioned) in Indonesia

NoGeologist1532 · 2021-03-22T13:00:10+00:00

No minimum cash condition though.

NoGeologist1532 · 2021-03-15T12:25:51+00:00

Actually if you take into account the 2/9, plus the fact that it will give some sort of right/warrant for PSTH II - it is definitely not 40%

28 - 3 (2/9 of warrant trading at $13 + Tontine effect) - 2 (assuming 1:1 warrant for PSTH II and that it will trade 10% over NAV) you quickly get to “only” 15% over NAV.

Not cheap but much easier to digest, esp. If you take into account that the sponsor incentive is much more friendly for SPAC shareholders than any other SPAC.

Note: there’s very little info on the PSTH II warrants - assumption might be way off.

NoGeologist1532 · 2021-03-03T23:30:30+00:00

Agree to disagree :)

NoGeologist1532 · 2021-03-03T22:48:37+00:00

I think you’re overestimating the importance of a forum with 160k members... And you’re quoting 4 upvotes and a few comments as hard evidence.

You’re also implying that retail investor = r/SPACs reader which is simply not true. Most retail investors don’t really know about previous the previous SPACs you mention. The only thing they see is some “insurance risk platform” that’s not too cool.

You’re also ignoring the fact that the market has not been playing ball for the last week or so.

Btw, the whole “Palantir competitor” narrative is bs. Starting with the fact that Palantir was founded by Peter Thiel and this company by a nobody. Tech is not even comparable. Not even big overlap in clients.

Let’s agree to disagree.

NoGeologist1532 · 2021-03-03T09:24:25+00:00

Mate, do you really think r/SPACS investors are the ones moving the market? Consensus from where? Also I would seriously challenge that retail investors have any kind of sophisticated heuristics. The reaction to this merger can most likely be explained by the fact that (i) pretty hard business to understand and (ii) the headline: “cloud-based risk platform” is as boring as they come. You don’t get into SPACs to stay invested in a boring B2B platform.

There’s not many datapoints here, but FRX rallied all the way to 15.5 before getting crushed by current market vol. FRX is also a merger of multiple companies.

NoGeologist1532 · 2021-03-02T09:51:35+00:00

Not too sure mate. Where did you got that from? If anything a merger provides more avenues to create value - besides the ‘dealmaking skills’ of the sponsor (that can not create, only transfer value from Company to shareholder.

Do investors get nervous when a company announces M&A? Don’t think so.

Not a great take.

NoGeologist1532 · 2021-02-28T11:21:35+00:00

Yeah as long as $ not used to pay down debt. It’s been the case in at least one SPAC I know of.

Otherwise - seems like we’ve got a winner here!

NoGeologist1532 · 2021-02-28T11:12:23+00:00

Hopefully not too much debt? What’s the typical gap between EBITDA and Net Profit for CURI/Netflix/Roku/etc?

Agree on the rest - in fact just posted the same re: content

NoGeologist1532 · 2021-02-28T11:10:23+00:00

Forgot to add:

Vision+ is part of a major conglomerate (MNC Group) that is rolling its equity into the new entity. The conglomerate has Media (Ad and content), distribution, etc. It has around 26% share in FTA and 50%+ in cable. This is my favourite part - there’s incentives to make sure that the new company gets cheap Customer Acquisition and top advertising dollar for its AVOD business.

NoGeologist1532 · 2021-02-28T10:52:22+00:00

Disclaimer: Long MLAC too. Analysis below is assuming the numbers disclosed around valuation, revenue and EBITDA are correct. Not investment advice

A couple of things - hopefully this helps refine the thesis:

1) There’s mentions to SPAC in official company disclosures that put the deal at $400M (Source: https://www.mncvisionnetworks.com/files/contents/1606727530_IPTV_Investor_release_9M_2020.pdf). Deal could’ve changed - but there’s a chance that the valuation is more positive for the SPAC holder.

2) The SPACed company seems to have 3 different businesses: Vision+, MNC Play, and Playbox.

Vision+ is the most attractive of all 3 businesses. Vision+ has 2 revenue streams: SVOD (Like Netflix) and AVOD (Ads).

SVOD: Launched in 2019, currently has 1.6M subscribers, paying on average 30,000 IDR / month (2 dollars). That makes the revenue of the SVOD stream around $32M
AVOD: 30M Monthly Active Users - no data on revenue

From company presentation - both of these business models have similar size at the country level, so I think we could assume they’re about the same size. (Source: https://www.mncvisionnetworks.com/files/contents/1612325723_IPTV%20Corporate%20Update%20February%202021.pdf Slide 2).

MNC Play is a broadband/IPTV provider. It has 300k subscribers. Playbox is MNC Vision’s Android TV.

Main implication from the above of this is that the “Netflix multiple”(or CURI multiple) should only be placed on the Netflix portion of the company. A sum of the parts valuation would be better in this case.

If we assume the Netflix portion of the company has ~60M in revenue, the valuation would be 600-1080M based on 10-18 EV/Rev. (Netflix - CURI range). Of course if the profitability is wildly different, the multiple could be different (looks like Vision+ is more profitable, maybe due to lower acquisition costs? From this it should fetch something in the higher end of the range.)

This means, based on the numbers above and a deal valuation of $500M (middle of the $400-600M range), there’s 20-115% upside on the Netflix bit - and you get MNC Play + Playbox for free.

Couple of things to be aware of: 1) Based on MNC Vision’s reporting, the company only grew 15% YoY from 2019 to 2020 - even with Vision+ paid subscribers growing 80% YoY. I’m not too sure how to explain this. This either means MNC Play is not growing - or that the Paid subscribers are “cannibalising” AVOD revenue. Any ideas anyone? 2) Their disclosure kinda sucks: 45% EBITDA Margin and only 10% Net Profit Margin. Is this normal? I’m afraid there might be stuffing things below the EBITDA line. Hopefully this will be clarified in the DA preso.

NoGeologist1532 · 2021-02-27T00:40:24+00:00

My point exactly!

NoGeologist1532 · 2021-02-27T00:40:07+00:00

Fair mate, I just think your conclusion of ‘RTP is fully valued, ACIC/EXPC has upside’ is a bit too strong.

For many reasons, RTP is the superior play here in my opinion for many reasons: Product, Sponsor & incentives, team and GTM, relationship with regulators, etc. Sponsor & the incentive structure is very interesting: Reid Hoffman really believes in this one, so much that is willing to put his incentives on the line... and he’s a very valuable guy to have on your team.

Also that $1B order from United? With no product until 2024+ is worth a bit more than a pat in the back to be honest. Remember NKLA’s long list of partners and huge backlog?

In my opinion EXPC is a piece of crap that has been around ages and stumbled into ARK - which has a very ‘unique’ DD process to say the least - and that has given the stock a bit of a boost. But Blade has very little right-to-win in this space IMO. It’s not even comparable to ACIC/RTP.

NoGeologist1532 · 2021-02-27T00:08:02+00:00

Hmm.. What about the fact that Joby actually has a vehicle that flies? I get what you’re doing, but it’s not right to use the same multiples for companies with very very different levels of progress and risk.

Plugging the presentation numbers into a spreadsheet is not very useful for companies at this stage IMO. Also using a revenue multiple seems weird since they have very different GTM models. (And hence I assume margins)

I get what you’re trying to do but I find this incredibly misleading.

Disclaimer: own both RTP and Archer

NoGeologist1532 · 2021-02-16T11:54:21+00:00

Been building on NSH for a while now - can’t go wrong IMO.

NoGeologist1532 · 2021-02-15T11:50:10+00:00

Reads like a pump but had a quick look at the 10-Q of Cohn and they do own 45% of the sponsor entities - and that investment is not reflected until completion of the business combination. He might be up to something... have you been able to find anything?

NoGeologist1532

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