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FuboTV DD (First time making DD, please give advice)

I tried to make it easy to skip around if you just want to see the financials or estimates. Just scroll to them if you don't care what the company is or their sectocompetition/management. TL;DR at bottom with final thoughts.
Introduction
“FuboTV ($FUBO) is an American streaming television service that focuses primarily on channels that distribute live sports, including NFL, MLB, NBA, NHL, MLS and international soccer, plus news, network television series and movies.
Launched on January 1, 2015 as a soccer streaming service, FuboTV changed to an all-sports service in 2017 and then to a virtual multichannel video programming distributor (vMVPD) model. As a vMVPD, FuboTV still calls itself sports-first but its expanded channel lineup targets cord cutters, offering a selection of major cable channels and OTT-originated features that can be streamed through smart TVs, mobile and tablets and the web. The service is available in the United States, Canada and Spain as of 2018."
From their home page:
They are the only competitors in their space of digital sports broadcasting, offer 4K streaming and upscaling of live sports, cloud DVR capability ranging from 250 or 1000 hours on standard plans, and is available on Roku, Apple TV, Amazon Fire TV, Chromecast, Samsung Smart TVs, Xbox One, Android TV, Android Smart TVs, and Android/iOS smartphones and tablets, with plans ranging from $24.99/month to $79.99/month (not including add-ons).
They have also recently acquired one company and have made plans to acquire another to allow for in-house sports betting. They have stated in a press release that they plan to release a sportsbook before the end of the year. This will push them into a broader spectrum outside of only TV and sports streaming, and into the sports betting sector along with DraftKings ($DKNG), FanDuel ($PDYPY), and Penn National Gaming ($PENN).
Plans and Add-ons
FuboTV offers three standardized plans as of February 8, 2021: the Family plan is priced at $64.99/month (normally $75.97/month), Elite at $79.99/month (normally $100.95/month), and Latino Quarterly at $24.99/month, along with offering additional add-ons. Each plan offers a range of channels, cloud DVR capabilities (which allows fast-forwarding through commercials), and casting to multiple devices simultaneously. Only the Elite plan does not offer a 7-day free trial (Channels page).
The Family plan includes 117 channels (mostly news and entertainment with roughly 40 that offer sports, including ESPN), up to 250 hours of DVR space, and casting to 3 devices at once. The quarterly prepaid includes a free upgrade to 1000 hours of DVR space and 5 casting devices at home with 3 on the go (Channels page).
The Elite plan includes 164 channels (includes an additional “47 entertainment channels”), up to 1000 hours of DVR space, and casting to 5 devices at home with 3 on the go. This plan does not offer a quarterly prepaid (Channels page).
The Latino Quarterly plan includes 250 hours of DVR space and can be streamed on up to 3 devices at once, but only has 32 channels. This plan needs to be prepaid every 3 months for a total charge of $74.97 and does not offer a monthly service (Channels page).
Upgrades include additional DVR space--1000 hours for an additional $6.99/month for the Family and Latino Quarterly--and increased device casting--an additional 2 devices at home with 3 on the go for another $9.99/month for the Family and Latino Quarterly plans. You can also add a variety of channels and sports packages (the Latino Quarterly has fewer channel add-ons compared to the Family and Elite plans, which both have the same channel varieties). Sports Plus with NFL RedZone is an additional $10.99/month, but includes all professional and college sports broadcasting services for football, basketball, baseball, hockey, tennis, fighting, etc. (Channels page).
Fubo has recently removed its former Standard plan, which included only 65 channels, up to 2 casting devices, and only 30 hours of DVR support for $60/month.
Financials and Growth
Fubo has yet to file an annual report as they have gone public in October of 2020, but they have filed a 10-Q for Q3 2020. All numbers in thousands.
Assets-
Between December 31, 2019 and September of 2020, assets have increased from $368,225 to $799,313 (a 117% increase) . Total current assets increased from $17,973 to $58,016, but accounts receivable decreased from $8,904 to $6,975--this may be attributed to the increase in prepaid subscriptions which increased from $1,445 to $12,177 which shows strong customer satisfaction and retention.
Liabilities-
Liabilities have increased from $145,049 to $290,376 (a 100% increase). The largest contributors to their liabilities are “Due to related parties” increasing from $665 to $85,847, “Warrant liabilities” increasing from $24 to $28,085, and “Accounts payable” from $36,373 to $61,679. Long-term borrowings have decreased from $43,982 to $25,905.
Revenues-
Subscription revenues increased by $53,433, totaling $92,945 for the year. Total revenues including advertisements and licensing have increased by $61,202, totaling $112,669 for the year and an increase of 47% YOY. Q4 revenue is estimated to be between $94,000 and $98,000 which would be a 77-84% increase YOY.
Expenses-
Subscriber related expenses total $114,315 for the year. Total expenses have totaled $500,249 for the year.
Subscribers-
Ended Q3 with 455,000 paid subscribers, a YOY increase of 58%, and plans to end 2020 with over 545,000, an increase of 72% YOY.
Competition
Its closest competitors are Hulu + Live TV (owned by Disney ($DIS)), YouTube TV (owned by Alphabet ($GOOG)), and Sling TV (owned by Dish Network ($DISH)).
Hulu + Live TV
YouTube TV
Sling TV Blue
Sling TV Orange
The vMVPD Sector
Cord-cutting has become increasingly popular over the last few years with consumers dropping traditional cable and satellite networks in favor of streaming services--such as Hulu, Netflix, Disney+, etc.--and vMVPD services.
In 2019 alone, 6.3 million people cut their cable connection, totaling 39.3 million. In a survey of what they might miss most from cable networks, 52% said they don’t miss anything, 23% missed live events on TV, 22% missed news, and 19% missed live sports. Although not all of those that miss aspects of cable will pay for another subscription service, the sentiment exists for a sports-focused platform that offers other large networks as well.
Another report by Parks Associates reveals that 17% of vMVPD subscribers switched from traditional TV within the last twelve months. In the same report, a survey conducted on current broadband households determined that 43% were “likely to switch to a… vMVPD within the next 12 months." The potential growth exists for the live digital broadcasting space, although it is slowing down.
With the spread of COVID and quarantines, people have been spending more time at home. When things open and quarantines end, that will be the true test for these providers as people will spend less time watching TV.
The Sports Betting Sector
Legal sports betting has taken a huge leap in recent years with the introduction of online sports betting; the ability to place wagers from anywhere at any time and have instant gratification has boomed with its slow legalization. This sector has a forecasted value of $150 billion with other competitors already having a completed project and vast market share. In 2019, DraftKings ($DKNG) and FanDuel (PDYPY) controlled 83% of the market share.
FuboTV plans to join into this space with its own sportsbook. Their recent acquisition of Balto Sports in December of 2020, whose business was in simulating fantasy sports games, is Fubo’s first step into sports wagering. They plan to create a free-to-play gaming system alongside online sports wagering.
Their next planned acquisition, which was announced in January of 2021, will be to acquire Vigtory, a sports betting and interactive gaming company. According to BusinessWire, they plan to utilize Vigtory’s “sportsbook platform and digital gaming assets, and its consumer-driven betting technology, to develop a frictionless betting experience for fubo’s customers."
These recent acquisitions set Fubo up to create an all-in-one viewing and betting experience, which could add new customers to their subscriber list and seal them into online wagering.
It has been over two years since the Supreme Court has denied the federal ban on sports betting, which would have made online betting illegal in all of the United States. Currently, more than two dozen states have legalized sports betting, but most have only legalized in-person betting. More states may be willing to legalize to take advantage of the increased revenues and taxes associated with gambling and online wagering. As of 2020, six additional states plan to legalize some form of betting, although some are only allowing in-person. There are an additional 14 states that are considering the notion to allow legal gambling, whether in-person, online, or tribal.
Management and Investors
David Gandler - CEO / Director / Co-Founder
Appointed as CEO and director in April of 2020. Prior to Fubo, Gandler had a 15 year career in marketing and advertising in local broadcast and cable TV within both general and Hispanic markets at companies such as Time Warner, Telemundo, and Scripps Networks Interactive.
Alberto Horihuela - CMO / Co-founder
In charge of marketing, Horihuela was head of Latin America for SVOD service DramaFever.
Simone Nardi - CFO
Nardi has worked as SVP and CFO of Scripps Networks Interactive where he was responsible for the finance and strategic planning for the company’s international business. Was also a key player in refinancing TVN S.A.’s billion dollar debt.
Large Investors
Analysts and Estimates
Average analyst ratings put Fubo at a Buy to Strong Buy rating with an average price target of $45.50 with a high of $60 and a low of $30. EPS estimates are estimated to be -5.23 for 2020 and -1.64 for 2021.
Currently has a short float of about 75%, but the short volume has been holding at roughly 15-20% over the last month and has drastically declined from its October short volume of over 50%.
Originally valued at $700 million less than a year ago, a current valuation of $3.19 billion is respectable for this company and is on par for its current performance.
Risks
Final Thoughts / TL;DR
With its drastic growth over the last year (400% in the last 4 months), support from FaceBank and well-known investors, and plans to join the sports betting sector, FuboTV has potential to become a household name and grow well beyond its current valuation by combining both sports broadcasting and online sports betting into one convenient place. Although unlikely to overthrow any of the current forces, it can become the best live sports broadcaster that people can turn to when they cut cable but want to keep live sports. It has many hurdles to overcome (creating their sportsbook, better marketing, increasing subscriber count, etc.) before it is any real competition to its already established competition.
At a $3.19 billion market cap and very high (75%) short interest, it will be very difficult to realize consistent growth, but it is on par for a company with almost $100 million in revenue.
My Position
25 shares at $47.30
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Edit: edited final thoughts/TL;DR
Please provide feedback! First time actually researching and compiling information for a company and not just reading about them on here. Also, please ask questions to clear up any confusion; it was kinda hard to put everything together neatly, so I might have accidentally left stuff out or oveunder explained some things.
submitted by AlbibiG to stocks [link] [comments]

Why Dogecoin to $1 is Only a Matter of Time

Why Dogecoin to $1 is Only a Matter of Time
​
The Bubble
It’s February of 2021, and let’s be completely honest: We’re in a bubble. It’s kind of like 1999 but not the same. In 1999, interest rates were much higher. Today, they are nearly zero. In some countries, they are even negative. From a long-term perspective, this is very bad.
The Federal Reserve is completely to blame for this. Their policies are entirely reckless, and officials refuse to acknowledge what is going on here. The Coronavirus hysteria caused by the media and enabled by officials made the crash last summer the worst man-made disaster in the history of our financial system. The Great Depression was caused by over-speculation and a lack of regulation in an emerging financial system. The Great Recession was caused by greed and fraud (strangely, no one is in jail for this). This market collapse was caused by elected officials and the fed, who got trigger-happy and cut rates to zero back in the spring of 2020.
Whatever we wind up calling the burst of this bubble is to be determined. It will, however, be entirely manmade because the fed refuses to acknowledge the speculative behavior currently going on in SPACs, Cryptos, Penny Stocks, and anything else that serves as a legal Ponzi scheme for inflating the bubble. Even real, dividend-paying stocks have gotten way overvalued in some sectors. Also, since the fed has no plans of raising rates within the next two years (so they say for now, at least), if you’re searching for yield, you have nowhere else to look than the equities markets or one of these legalized forms of Ponzi schemes. It’s extremely unfair to conservative or retired investors looking for an honest return on their savings. This all is actually why it is a great time to look at Dogecoin, as I will get to in a moment. So long as rates are near zero, the bubble will continue to go on for longer and longer. And while it continues, people will constantly look for the next big thing.
For How Long?
Now, this may sound all doom and gloom, but that’s not my point. One day the bubble will burst, but I’m not making a prediction of when that will happen. Anyone making up dates for when the bubble will burst is either clueless or a con artist. No one knows when this bubble will burst. It could be weeks, months, or even years. One thing is for sure, the bubble will not burst just because things are overvalued. That’s not how bubbles work.
There needs to be a catalyst to burst the bubble. A major military conflict. An unexpected move or comment by the fed (raising rates, calling out the bubble for what it is, etc.). Another nationwide lockdown. I can go on with examples, but a little selloff here and there (August 2020) that causes the financial media to lose its mind is not enough. Just because you claim the bubble is bursting isn’t enough either. If you follow the media, you will get burned over and over again. That’s how it works. They want you to go to their sponsors for help, and once they burn you (sell you gold, overcharge you for poor investments, etc), you’ll come back to them hoping to figure things out. It’s a shell game. When the bubble burst, it will happen extremely fast and unexpectedly. There’s nothing wrong with playing the bubble, but you need to be mindful of when it ends because once the music stops, there will be a mad rush for the exits. You don’t want to be stuck holding the bag because everything will get crushed when the bubble burst. Even the blue-chip stocks that pay solid dividends will get hammered.
Fundamentals Don’t Matter (For Now)
In this bubble environment, fundamentals don’t make sense and, quite frankly, they don’t matter. You can argue back and forth all day long about whether something has a practical future or whether something is overvalued. I’m not here to do that about Dogecoin, Bitcoin, or any other crypto. The same could be said about Penny Stocks right now. (Hint: virtually all of these companies are way overvalued). You can find tons of articles of that nature, and I’m not likely to change your preconceived notions anyway. If we look at all the irrational bubbles that have occurred lately, you are a complete fool if you believe that TSLA or BTC is worth nearly a trillion dollars. It’s worth nowhere near that valuation.
How do I determine what something is worth, and who do I mean? It is called the market cap. In layman’s terms, that is where you take all the stock shares and multiply it by the share price. And I’m not recommending buying or selling TSLA or BTC, I’m just pointing out that these valuations are absurd. Does that mean they will not pass 1 trillion dollars? Of course not. There’s a very reasonable chance they do pass a $1 trillion market cap. That sounds absurd to write but it’s true. When the bubble bursts, you better believe fundamentals will be back in play. This disconnect can’t last forever. But it can go on for a while. And while it lasts, we all want to make some money
A Quick Word About ALL Cryptos
While I don’t believe Cryptocurrencies are going anywhere (as in, people will always buy and sell them), I also do not see any APPLICABLE future in them other than trading with other people. In fact, the biggest use I see of Cryptocurrencies is for illegal and untraceable transactions. The government will do all they can over the next several years to bring in lost tax revenue and track transactions better, but that’s the extent to which Cryptos will have relevance. How do I know this? Because the federal reserve, which is backed by the taxing authority of the US Government and the might of the US military, isn’t about to let some alternative currency usurp the US dollar. How do you think we can afford to provide all this government stimulus to fight Covid? If you think about this, you will see why other countries are much worse off. They must play by our rules, while we get to export our inflation to other countries because they must use the USD to buy commodities on the international exchanges (look at what happened when Saddam tried to circumvent this). If they print more money, their currency gets devalued. That’s why as bad as things look, relatively speaking, the US isn’t in terrible shape compared to the rest of the world.
If your financial future is so married to Bitcoin, ask yourself this: what happens if your account gets hacked? Who will you call? Who will make you whole again? If you have a brokerage account with legitimate stocks, there are regulations in place. There is the SIPC which protects again brokerage failure. With Bitcoin, you are completely gambling. This lack of regulation and lack of price stability means that there is no viable path to Bitcoin being a legitimate currency. Does it mean people can buy and sell it? Of course. But if you are in the cult of believing that Bitcoin is the future world reserve currency, you need to get your head examined.
Gold and Silver con artists have been trying for decades for people to get on this alternative currency train. At least gold and silver have some practical industrial applications. And hundreds of years of history on its side. Crypto isn’t anything but something people agree upon as having value. Why do I point this out? Because the one thing you need to do is separate yourself from what you think you know about Crypto and Blockchain, etc. While it all sounds cool and revolutionary, it really doesn’t matter. The US government could easily create their own form of Crypto that gives them more control. The decentralized part just doesn’t jive with our current global hegemony. If you don’t understand this, you should think more and read less. Once you accept this, you can start to see all Crypto as fundamentally worth the same: virtually nothing. The technicals, however, are why we want to look at Dogecoin.
Relative Valuation of Dogecoin
Now that you understand a little more background into where we are, I believe Dogecoin is extremely undervalued. Why? It’s simple. Relative valuation. This is one of the easiest and most efficient ways to compare investments. Ok, so maybe this isn’t really investing anymore; it’s gambling. Still, we can apply the same concept. Imagine two companies: they are in the same industry and have similar margins, earnings, growth prospects, etc. One company is valued at $50 billion and costs $120 per share, and one is valued at $85 billion and costs $80 per share. Which one would you invest in? Of course, you would invest in the one that is worth $50 billion at $120 per share. The cost per share means absolutely nothing. It is psychological.
Now, you say Dogecoin isn’t on par with Bitcoin and that where I’m going with this isn’t a fair comparison. Go back and read the last section. That’s why I wrote about the practical applications of Cryptocurrencies in general. None of that matters. The only thing that matters is the general sentiments shared by people that buy and believe in Cryptocurrency. So, let’s look at the current valuations:
Bitcoin – Price $40,500, Market Cap $755B (estimated as of 2-6-21)
Dogecoin – Price $.05, Market Cap $4.4B (estimated as of 2-6-21)
(Source: Yahoo Finance)
Now, I’m not saying Dogecoin is worth what Bitcoin is. I’m not even saying it's worth half or a third of Bitcoin. Who really knows? No one does. You certainly cannot say for certain that one is better than another. One is more “established” and has more name recognition. What I am saying is this: if Dogecoin goes to $1, it will have a market cap of just over $85 billion. Even at Bitcoin’s current market cap, that’s just over 1/10 of its value. And that isn’t even pricing in more appreciation of Bitcoin’s value over time. This means I see tons of room for Dogecoin to run. (I know some will mention dilution via minting of new coins, but that’s another discussion and not entirely relevant to the points I am trying to make in this piece.)
Could Dogecoin match Bitcoin? That sounds absurd, but let’s look just for fun: if Dogecoin were to have the same market cap as Bitcoin, that means it would have a current price of $8.55. So, what am I saying here? You must know the range of possibilities (within reason, if that even exists anymore) before you start thinking about price targets. To say Dogecoin is going to $100 is just absurd; things need to be put in the proper context.
Why Dogecoin?
Using relative valuation, I believe you could make a case for any Crypto. Will they all run to Bitcoin’s level? Of course not. The last question is why Dogecoin? This is the most important one that we have to answer before deciding on buying Dogecoin. The answer is simple: hype and name recognition. If I look at the most valuable cryptocurrencies by market cap, Dogecoin is number 12. I have taken an informal survey of probably 100 people over the last two weeks. I showed them the top 15 Cryptocurrencies by market cap to see which they were familiar with: Stellar, Binance Coin, Cardano, Polkadot, XRP . . . almost all of these were completely unheard of. But, somehow, they have valuations of 2-3 times Dogecoin.
Dogecoin has a few things going for it. First, hype. Elon Musk and many other prominent celebrities are pilling in. Mark Cuban has said he’d buy it over a lottery ticket. That alone can help aid a very quick lift off. Second, the name Dogecoin is very easy to remember and a trendy thing. What the heck is Cardano anyway? XRP? I mistakenly called it XPR before I edited this piece. And if you are still hung up on the practical use of Dogecoin or other Cryptos, you are missing the point of this piece entirely. Look at the story behind Bitcoin. An anonymous person online created a decentralized platform for money movement or something like that. What? How in the world did that idea ever take traction? It’s just like people online arguing over which Penny Stock is the next big thing. Neither person is right, but the perception is really all that matters.
Third, stimulus checks will be hitting within weeks or months. This naturally promotes price inflation when people have more dollars chasing few goods. People will inevitably pile into whatever they think is the next great thing. Dogecoin has momentum right now. And this brings me to number four.
Fourth, and perhaps most importantly, FOMO is very powerful right now. There are people all over the world that know people who have won big money in this bubble. Penny stocks, GameStop, Bitcoin, and many others that you can name. How many people do you personally know that have won big in the lottery? Probably none. This is a unique time in history. People have won big in this market and are looking for the next thing.
Dogecoin is something that could pick up steam quickly. It could blow up overnight. It may not, and that is the risk you take. At the end of the day, it’s just money that you can always make more of. Life-changing money is worth the risk when you find the right risk-reward ratio.
Do your due diligence, but also think ahead to a scenario that you could imagine. Would you be that surprised if Dogecoin reached $1? And if it did, would you be surprised if it started running towards multiple dollars? $1 is a psychological number that typically leads to a further breakout. The current market cap suggests this is all very possible. Now imagine getting in at four or five cents.
Disclosure: Long Dogecoin with Diamond Hands. No positions in any other things mentioned. -BJ
submitted by brayjones1985 to dogecoin [link] [comments]

Detailed DD post [re-post after r/pennystocks removed it]

Detailed DD post [re-post after pennystocks removed it]
I posted this yesterday morning (UK time) but after 5 hours or so, pennystocks deleted the original post. A few people messaged me asking for it to be shared in a few High Tide specific pages. So here it is!
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This is my first time posting a DD post – a friend of mine who moderates on SPACs has shared some analysis I have written previously, but I’m keen to share this here, and see if there is any appetite for sharing my own personal written DD I have on the 30 stocks I have across a number of different portfolios.
I have modified this format, as it was originally a script for a video which I created on the stock. If you prefer to listen – check it out here: https://youtu.be/qsjwU7kkPsw
Some of the market stats (market cap, current multiples, etc.) are correct as of Feb-06, and clearly a little outdated since the price movements.
Not a financial advisor, do your own DD. I am long HITI and have an expectation of a long term hold on this stock.
Overview
  • High Tide Canada-based cannabis retail company, operating under multiple brands. It operates under 3 core divisions:
  1. Brick and mortar retail – 4 key brands with just under 70 locations in Canada. Brands include: Canna Cabana, New Leaf, Meta Cannabis and Kushbar. Forecast to have around 115 stores by end of 2021
  2. Online retail – has 2 brands, both of which attract millions of viewers per month – Grasscity.com and CBDcity.com
  3. Wholesale – manufacturer of paraphernalia in US and Canada. Number of products are branded with various celebrities, Snoop Dogg, Paramount Pictures, Trailer Park Boys and many more
  • Has good c-level execs and experienced executive board; hold significant stake in the business. CEO Raj Grover holds just over 21% of the shares
  • Currently has a market cap of around $280m. Still significant upside to the valuation – see analysis later in post
Investment Merits
Very strong market growth:
  • Business has demonstrated growth both organically (through new store openings, more online sales and greater wholesale sales), as well as inorganically through M&A
  • Growth in markets which High Tide has a physical presence in is expected to be very strong. North American cannabis market (Canada and US) is forecast to grow by 30% a year to 2027 (source: research and markets)
  • Analysts covering High Tide are forecasting growth in excess of this, which is positive to see and implies capturing market share
  • New markets / geographies ‘opening up’, legalizing and regulating cannabis is also an exciting and realistic prospect for incremental growth:
  1. The US federal legalization debate is on the table
  2. Many other countries are considering this too and High Tide is well positioned for these; this is catalyzed by the fact that government debt has increased significantly as part of the response to the COVID-19 health crisis. This needs to be repaid somehow, and increasing tax rates on existing taxes is an unpopular political move. Finding new tax revenues is a more palatable way of increasing tax revenues for governments. This is especially important in countries where elections are upcoming.
  • Personally I do expect to see this accelerate the agenda for the regulation and legalization of cannabis in many new countries
  • Whilst predominantly Canada and US based, High Tide does have presence in some markets where cannabis is not regulated or legalized, the UK for example (~10% of Grasscity sales are made here) and so it is well positioned with a strong and established brand to capitalize on this opportunity, when / if the market ‘opens up’
Regulation
  • High Tide benefits from the regulatory focus and overhang on the cannabis retail sector as it represents a strong barrier to entry, making it more challenging for new competitors to enter market
  • Participants in the market need to have licenses and ensure consistent compliance with laws to continue operating – failure to comply can result in significant financial penalties
  • Personally I normally don’t like investing into retail. There are usually fairly limited barriers to entry, minimal differentiation and negligible customer loyalty, however the cannabis market does have different characteristics in this respect and makes it a more compelling proposition
  • Regulation also benefits those with scale, something High Tide has as the leading player in the market. It costs money to obtain and retain licences to operate and it costs money to ensure compliance with all the laws and regulations and that all staff are acting in accordance with these
  • Some parallels in this respect which can be drawn to casino gaming in casinos; you don’t see new casinos popping up at the same rate which you see new restaurants or apparel stores opening
Demand
  • There’s a lot to like about the demand dynamics for High Tide. It’s vice-nature means that demand is less correlated to disposable incomes. Given where we are in economic cycle, especially important consideration
  • For those doubting this, check alcohol, tobacco or gambling expenditure across economic cycles historically, for a proxy
Strong performance throughout COVID-19 crisis
  • Despite heavy weighting towards brick and mortar, (the most hard hit part of retail) it has effectively managed the shift to online, which is a positive
  • Has relied on government support and financial assistance in the form of job retention schemes (address in more detail later in post)
  • This demonstrates management are capable and have effectively navigated the challenging situation
Data
  • Massively summarized from the video, (and my video on KERN) so check that out if interested in this point, however, they have unique access to supply chain data which could be monetized effectively and generate strong levels of recurring revenues
  • Other established sectors have a trusted party with such unique access to data (e.g. alcohol, lithium, different foods, etc.) and the opportunity here is enormous
  • I would like to see High Tide capitalize on this
Forecasts financials & analysts
  • Currently 2 analysts covering High Tide, both have a buy rating on the business
  • Their coverage is slightly outdated (expect this being updated soon and a further catalyst for positive price action) and their price targets are 60c; at the time their reports were published, they were forecasting a 4x upside (HITI was trading at ~15c)
  • Same analysts also forecasting strong growth - 77% CAGR to 2022. They are forecasting revenues of around $250m and EBITDA of $46m. A reminder here, these are professional analysts, not YouTube students – these come from their financial models, the assumptions of which are discussed with management
https://preview.redd.it/nfq8h5fpvmg61.png?width=602&format=png&auto=webp&s=f48977ca9c0072003ac71206cef28b0a493dd583
Valuation
  • Going to go quick here, its explained more slowly in the video but High Tide is currently valued at a significant discount to the other listed peers
  • Looking at EV / FY+1 Sales multiples – EBITDA not meaningful as some of the peer group are EBITDA negative and High Tide itself has only recently become EBITDA positive
​
https://preview.redd.it/4t4n303rvmg61.png?width=342&format=png&auto=webp&s=636bca248743272bed283af97780d3e1e121312f
  • Personally, I think Planet13 is the most comparable given its business model
  • Taking both Planet13 multiple and peer group average multiple, this is then applied to High Tide’s forecast FY+1 sales to calculate an enterprise value – this is adjusted for net debt to get to a market capitalization and then divided by the share count to get an implied share price
  • The table below shows the implied stock price valuations from this analysis
​
https://preview.redd.it/1mks0oxrvmg61.png?width=406&format=png&auto=webp&s=587ca8e2468b825103905931ebe7ab5b42314c6f
NB – assumed the following:
  1. Net debt will change in coming year given the capital structure and a large number of convertible notes – this has been ignored given it will have small impact on the price
  2. The share count will change as a result of dilution from various instruments – if this bothers you massively then look at the valuation discount on the basis of the enterprise value as it does not impact this (and only slightly on the market cap given minimal impacts to cash from instrument execution, etc.)
  3. Not accounting for any stock split, consolidation or any other M&A deals
  4. The FY21 financials are on the basis of the mean broker estimates from Thomson Reuters – Seeking Alpha has different and slightly outdated ones
Investment Risks & Mitigants / Outstanding DD points
Exposure to changing regulation
  • US is only a small part of the market which High Tide addresses, while a change in regulation would have a big impact on the company, currently it is unlikely this would happen, given the discussions about potential federal legalization
  • Canada regulation is established and not going anywhere
  • Other countries likely to legalize and regulate cannabis, as outlined earlier
Dilution
  • No escaping that there will be some significant dilution for shareholders, as pointed out in the table below, but this should be already priced into the stock
  • Potential that new equity issuances could occur to help finance growth, but provided this growth is delivered, it should be accretive for the stock price
​
https://preview.redd.it/vkrb2ousvmg61.png?width=602&format=png&auto=webp&s=40f8f4c65b92efc15af0eba42bb873c774700eff
Potentially misleading cost basis information
  • A risk that investors need to be aware with for all companies which have relied on government financial support during COVID-19 measures. Such support has resulted in the number of businesses going bankrupt decreasing massively – this is at a lower level than it ever normally is and is masking some real underlying issues within companies. As investors we need to be open eyed about this
  • As High Tide has benefited from support in the form of the Canada’s Emergency Wage Support scheme, there is the risk that once this is lifted it may become apparent that the cost base has not been effectively managed
  • Personally, I think this is mitigated by the synergy analysis conducted as part of the M&A. A full cost base analysis would have been conducted to calculate the potential $8.4m synergies so strong likelihood that this is under control, but should keep on our radar and reassess
Marketing expenses and celebrity licenses
  • Need more information to ascertain whether these are underpinned by a compelling ROI. Seen a lot of people suggest this is a great positive, but the impact on sales volumes from these is unknown, as is the terms of these license agreements (e.g. split between upfront fee vs. volume-based fee)
  • No escaping the fact that it is an increased cost and so need to understand the ROI this generates to determine whether it really is compelling
  • Is there really more demand to pay a premium for Snoop Dogg bongs, Guns n Roses papers, Cheech & Chong grinders, or whatever they may be?
  • So far management have suggested this has been helpful in driving new sales, but this is something to dig into more
If you want to check out the video, it would be appreciated: https://youtu.be/qsjwU7kkPsw
submitted by AlexM-YT to HITIFSTOCK [link] [comments]

Not your parents PLAYBOY: How Playboy is reinventing themselves and why you should Invest $MCAC

I know what you're already thinking. Playboy is a dead porn brand that publishes a magazine and doesn't appeal to millennials or gen z right?
Wrong.
Leadership
Let's start with Ben Kohn, the CEO. Kohn has worked in private equity for 25 years and started a firm called Rizvi Travers which invested in pre IPO tech companies. They were the largest investor when Twitter went public and invested in Facebook, Snapchat, Square, SpaceX, Instacart, and Uber.
In 2011, Kohn partnered with Hugh Hefner and took Playboy private. Kohn became the CEO in 2017 with the goal of revitalizing one of the largest, most recognizable brands in the world. Since becoming CEO, Kohn has been shutting down most of the legacy business and most recently discontinued producing a domestic magazine. He's focused most of his attention so far on growing the high margin licensing business and direct to consumer business, transforming Playboy into a consumer lifestyle brand focusing on 4 categories:
Kohn is also placing a strong emphasis on appealing to women and young people, something that Playboy had never done in the past. Over the last 3 years, the female audience has grown by 70% and 90% of their audience today is under the age of 40. Out of the total e-commerce sales, 40% of customers are women.
Financials
Playboy is already a profitable business. They have a highly efficient, high margin business model that accelerates with growth.
For the first 9 months of 2020, Playboy grew revenue by 78% from 57 million to 101 million and grew adjusted ebitda 129% from 9.5 million to 22 million. For 2021, they reaffirmed guidance of 167 million of revenue and 40 million dollars of ebitda. By 2025, Playboy is conservatively projecting 296 million of revenue and 140 million in ebitda, but expects it to be much greater. It's also important to note that they have over 400 million of forward booked minimum guaranteed cash flow, but they only recognize 67 million of that today, so the actual revenue numbers are much higher.
Playboy's business is monetized in two primary ways, licensing and direct to consumer. Licensing is a key part of the revenue stream and they anticipate it more than doubling moving forward. However, Playboy is extremely excited about its growing direct to consumer business as well which I will dive into in the next section.
Growth
Playboy has huge growth opportunities in each of their 4 product categories. First I want to point out that Playboy is HUGE in China and it's growing rapidly in India. In China, Playboy is one of the leading men's apparel brands with over 2500 brick and mortar stores and over 1000 e-commerce stores. Playboy sells products in over 180 countries and is the 17th most licensed brand in the world.
Style & Apparel:
Over the last 3 years, Playboy has partnered with Pacsun, Misguided, Supreme, and others. The Pacsun and Misguided businesses have increased almost 15x over the last 3 years. Playboy also launched Playboy Labs and partnered with Steve Aoki to promote the brand. Playboy intends on transitioning this business from a pure licensing business to a direct to consumer business going forward. They have future collaborations with Yandy planned as well.
Sexual Wellness:
The sexual wellness category is a 240 billion dollar industry today and is projected to grow to 400 billion by 2024. Currently, the industry is fragmented and made up of small businesses with no ability to scale. Playboy is poised to become the leader in this category through strategic acquisitions of existing companies and by growing its product offerings. Yes, I'm talking about lingerie, condoms, sex toys etc. They recently acquired the sexual wellness retailer Lovers for 25 million and expect them to add 45 million in revenue over the next 12 months. They are planning on making more strategic acquisitions in this space moving forward to become the leading direct to consumer brand in this field. They also began offering online sexual wellness classes for women, which have seen large growth since inception.
Gaming & Lifestyle:
The growth opportunities in this category are huge. Playboy is diversifying into online gambling, mobile gaming, CBD/Marijuana, and virtual reality. They have a social club/poker room opening in Houston this year in addition to their casino in London. They currently have partnerships with Microgaming as well as Scientific Games for mobile gambling apps like slots and poker, with plans to build more. They are also planning on entering the sports gambling market through partnerships with well known sports betting operators.
Moreover, they recently launched an exclusive furniture collection on Wayfair and plan on offering more in the future. They currently offer 3 CBD products and have plans to enter the legal marijuana market when it's legalized at the federal level, which might happen soon under the Biden administration. As of now they sell Playboy branded smoking materials like ash trays and grinders. They are planning on launching 4 more CBD products in 2021. Lastly, Ben Kohn said that experiencing Playboy through a virtual world format is something that is "extremely interesting to us". He gave an example of the Travis Scott and Unreal Platform collaboration.
Beauty and Grooming:
Currently, Playboy offers men's and women's fragrances and color cosmetics in Europe. They have plans to expand their product line and enter the North American market this year. In China, a place where Playboy has a large market presence, Men's grooming is one of the fastest growing categories and an area that Playboy is not in today. They are planning on entering this market in the near future with Playboy branded skincare and grooming products.
SPAC Merger
Playboy has a DA with Mountain Crest Acquisition Corp, $MCAC, with the shareholder vote taking place THIS TUESDAY 2/9/21. Once it's approved, the ticker will change to PLBY shortly after. One of the great things about this deal is that there are absolutely no warrants outstanding, meaning there will be very little dilution. They only have 1/10th of a right per share outstanding which automatically convert to common stock. Upon completion of the merger, PLBY will have only 37 million shares outstanding, which is a very low float. Any increase in volume and demand will send the stock price higher.
After the merger, PLBY will have a market cap of approximately 413 million. For comparison to other global brands, Nike's market cap is 185 billion, Disney's is 329 billion, and Lululemon's is 45 billion. Now I'm not saying Playboy is near those companies today. However, if they continue growing and realize their potential, they're massively undervalued.
Additionally, the management team all signed 12-month lock ups, preventing them from selling for at least one year. This is not a transaction sale, but a true capital raise to accelerate growth. They are in this for the long haul.
Conclusion
Playboy has big growth opportunities in multiple product categories to become a leading consumer lifestyle brand. They have a high margin profitable business model and a very healthy balance sheet. They have 100 million in free cash right now and only 40 million in net debt, or one times 2021 adjusted ebitda. They already have global brand awareness and the bunny logo alone has tremendous value. Ceo Ben Kohn knows what he's doing and has a proven track record of success.
It might be flying under the radar right now because all the hype is surrounding GME and EV socks. I believe when the ticker changes to PLBY and people realize that Playboy is no longer what it used to be, this has huge long term upside.
FYI: All of the statistics I mentioned are directly taken from the CEO Ben Kohn in his 1 hour webinar interview with SpacInsider.
Disclosure: Long 500 commons $MCAC
Disclaimer: Do your own due diligence too
submitted by pucklife21 to SPACs [link] [comments]

Playboy going public: Porn, Gambling, and Cannabis

NEW INFO 5 Results from share redemption are posted. Less than .2% redeemed. Very bullish as investors are showing extreme confidence in the future of PLBY.
https://finance.yahoo.com/news/playboy-mountain-crest-acquisition-corp-120000721.html
NEW INFO 4 Definitive Agreement to purchase 100% of Lovers brand stores announced 2/1.
https://www.streetinsider.com/Corporate+News/Playboy+%28MCAC%29+Confirms+Deal+to+Acquire+Lovers/17892359.html
NEW INFO 3 I bought more on the dip today. 5081 total. Price rose AH to $12.38 (2.15%)
NEW INFO 2 Here is the full webinar.
https://icrinc.zoom.us/rec/play/9GWKdmOYumjWfZuufW3QXpe_FW_g--qeNbg6PnTjTMbnNTgLmCbWjeRFpQga1iPc-elpGap8dnDv8Zww.yD7DjUwuPmapeEdP?continueMode=true&tk=lEYc4F_FkKlgsmCIs6w0gtGHT2kbgVGbUju3cIRBSjk.DQIAAAAV8NK49xZWdldRM2xNSFNQcTBmcE00UzM3bXh3AAAAAAAAAAAAAAAAAAAAAAAAAAAA&uuid=WN_GKWqbHkeSyuWetJmLFkj4g&_x_zm_rtaid=kR45-uuqRE-L65AxLjpbQw.1611967079119.2c054e3d3f8d8e63339273d9175939ed&_x_zm_rhtaid=866
NEW INFO 1 Live merger webinar with PLBY and MCAC on Friday January 29, 2021 at 12:00 NOON EST link below
https://mcacquisition.com/investor-relations/press-release-details/2021/Playboy-Enterprises-Inc.-and-Mountain-Crest-Acquisition-Corp-Participate-in-SPACInsider-ICR-Webinar-on-January-29th-at-12pm-ET/default.aspx
Playboy going public: Porn, Gambling, and Cannabis
!!!WARNING READING AHEAD!!! TL;DR at the end. It will take some time to sort through all the links and read/watch everything, but you should.
In the next couple weeks, Mountain Crest Acquisition Corp is taking Playboy public. The existing ticker MCAC will become PLBY. Special purpose acquisition companies have taken private companies public in recent months with great success. I believe this will be no exception. Notably, Playboy is profitable and has skyrocketing revenue going into a transformational growth phase.
Porn - First and foremost, let's talk about porn. I know what you guys are thinking. “Porno mags are dead. Why would I want to invest in something like that? I can get porn for free online.” Guess what? You are absolutely right. And that’s exactly why Playboy doesn’t do that anymore. That’s right, they eliminated their print division. And yet they somehow STILL make money from porn that people (see: boomers) pay for on their website through PlayboyTV, Playboy Plus, and iPlayboy. Here’s the thing: Playboy has international, multi-generational name recognition from porn. They have content available in 180 countries. It will be the only publicly traded adult entertainment (porn) company. But that is not where this company is going. It will help support them along the way. You can see every Playboy magazine through iPlayboy if you’re interested. NSFW links below:
https://www.playboy.com/
https://www.playboytv.com/
https://www.playboyplus.com/
https://www.iplayboy.com/
Gambling - Some of you might recognize the Playboy brand from gambling trips to places like Las Vegas, Atlantic City, Cancun, London or Macau. They’ve been in the gambling biz for decades through their casinos, clubs, and licensed gaming products. They see the writing on the wall. COVID is accelerating the transition to digital, application based GAMBLING. That’s right. What we are doing on Robinhood with risky options is gambling, and the only reason regulators might give a shit anymore is because we are making too much money. There may be some restrictions put in place, but gambling from your phone on your couch is not going anywhere. More and more states are allowing things like Draftkings, poker, state ‘lottery” apps, hell - even political betting. Michigan and Virginia just ok’d gambling apps. They won’t be the last. This is all from your couch and any 18 year old with a cracked iphone can access it. Wouldn’t it be cool if Playboy was going to do something like that? They’re already working on it. As per CEO Ben Kohn who we will get to later, “...the company’s casino-style digital gaming products with Scientific Games and Microgaming continue to see significant global growth.” Honestly, I stopped researching Scientific Games' sports betting segment when I saw the word ‘omni-channel’. That told me all I needed to know about it’s success.
“Our SG Sports™ platform is an enhanced, omni-channel solution for online, self-service and retail fixed odds sports betting – from soccer to tennis, basketball, football, baseball, hockey, motor sports, racing and more.”
https://www.scientificgames.com/
https://www.microgaming.co.uk/
“This latter segment has become increasingly enticing for Playboy, and it said last week that it is considering new tie-ups that could include gaming operators like PointsBet and 888Holdings.”
https://calvinayre.com/2020/10/05/business/playboys-gaming-ops-could-get-a-boost-from-spac-purchase/
As per their SEC filing:
“Significant consumer engagement and spend with Playboy-branded gaming properties around the world, including with leading partners such as Microgaming, Scientific Games, and Caesar’s Entertainment, steers our investment in digital gaming, sports betting and other digital offerings to further support our commercial strategy to expand consumer spend with minimal marginal cost, and gain consumer data to inform go-to-market plans across categories.”
https://www.sec.gov/Archives/edgadata/1803914/000110465921005986/tm2034213-12_defm14a.htm#tMDAA1
They are expanding into more areas of gaming/gambling, working with international players in the digital gaming/gambling arena, and a Playboy sportsbook is on the horizon.
https://www.playboy.com/read/the-pleasure-of-playing-with-yourself-mobile-gaming-in-the-covid-era
Cannabis - If you’ve ever read through a Playboy magazine, you know they’ve had a positive relationship with cannabis for many years. As of September 2020, Playboy has made a major shift into the cannabis space. Too good to be true you say? Check their website. Playboy currently sells a range of CBD products. This is a good sign. Federal hemp products, which these most likely are, can be mailed across state lines and most importantly for a company like Playboy, can operate through a traditional banking institution. CBD products are usually the first step towards the cannabis space for large companies. Playboy didn’t make these products themselves meaning they are working with a processor in the cannabis industry. Another good sign for future expansion. What else do they have for sale? Pipes, grinders, ashtrays, rolling trays, joint holders. Hmm. Ok. So it looks like they want to sell some shit. They probably don’t have an active interest in cannabis right? Think again:
https://www.forbes.com/sites/javierhasse/2020/09/24/playboy-gets-serious-about-cannabis-law-reform-advocacy-with-new-partnership-grants/?sh=62f044a65cea
“Taking yet another step into the cannabis space, Playboy will be announcing later on Thursday (September, 2020) that it is launching a cannabis law reform and advocacy campaign in partnership with National Organization for the Reform of Marijuana Laws (NORML), Last Prisoner Project, Marijuana Policy Project, the Veterans Cannabis Project, and the Eaze Momentum Program.”
“According to information procured exclusively, the three-pronged campaign will focus on calling for federal legalization. The program also includes the creation of a mentorship plan, through which the Playboy Foundation will support entrepreneurs from groups that are underrepresented in the industry.” Remember that CEO Kohn from earlier? He wrote this recently:
https://medium.com/naked-open-letters-from-playboy/congress-must-pass-the-more-act-c867c35239ae
Seems like he really wants weed to be legal? Hmm wonder why? The writing's on the wall my friends. Playboy wants into the cannabis industry, they are making steps towards this end, and we have favorable conditions for legislative progress.
Don’t think branding your own cannabis line is profitable or worthwhile? Tell me why these 41 celebrity millionaires and billionaires are dummies. I’ll wait.
https://www.celebstoner.com/news/celebstoner-news/2019/07/12/top-celebrity-cannabis-brands/
Confirmation: I hear you. “This all seems pretty speculative. It would be wildly profitable if they pull this shift off. But how do we really know?” Watch this whole video:
https://finance.yahoo.com/video/playboy-ceo-telling-story-female-154907068.html
Man - this interview just gets my juices flowing. And highlights one of my favorite reasons for this play. They have so many different business avenues from which a catalyst could appear. I think paying attention, holding shares, and options on these staggered announcements over the next year is the way I am going to go about it. "There's definitely been a shift to direct-to-consumer," he (Kohn) said. "About 50 percent of our revenue today is direct-to-consumer, and that will continue to grow going forward.” “Kohn touted Playboy's portfolio of both digital and consumer products, with casino-style gaming, in particular, serving a crucial role under the company's new business model. Playboy also has its sights on the emerging cannabis market, from CBD products to marijuana products geared toward sexual health and pleasure.” "If THC does become legal in the United States, we have developed certain strains to enhance your sex life that we will launch," Kohn said. https://cheddar.com/media/playboy-goes-public-health-gaming-lifestyle-focus Oh? The CEO actually said it? Ok then. “We have developed certain strains…” They’re already working with growers on strains and genetics? Ok. There are several legal cannabis markets for those products right now, international and stateside. I expect Playboy licensed hemp and THC pre-rolls by EOY. Something like this: https://www.etsy.com/listing/842996758/10-playboy-pre-roll-tubes-limited?ga_order=most_relevant&ga_search_type=all&ga_view_type=gallery&ga_search_query=pre+roll+playboy&ref=sr_gallery-1-2&organic_search_click=1 Maintaining cannabis operations can be costly and a regulatory headache. Playboy’s licensing strategy allows them to pick successful, established partners and sidestep traditional barriers to entry. You know what I like about these new markets? They’re expanding. Worldwide. And they are going to be a bigger deal than they already are with or without Playboy. Who thinks weed and gambling are going away? Too many people like that stuff. These are easy markets. And Playboy is early enough to carve out their spot in each. Fuck it, read this too: https://www.forbes.com/sites/jimosman/2020/10/20/playboy-could-be-the-king-of-spacs-here-are-three-picks/?sh=2e13dcaa3e05
Numbers: You want numbers? I got numbers. As per the company’s most recent SEC filing:
“For the year ended December 31, 2019, and the nine months ended September 30, 2020, Playboy’s historical consolidated revenue was $78.1 million and $101.3 million, respectively, historical consolidated net income (loss) was $(23.6) million and $(4.8) million, respectively, and Adjusted EBITDA was $13.1 million and $21.8 million, respectively.”
“In the nine months ended September 30, 2020, Playboy’s Licensing segment contributed $44.2 million in revenue and $31.1 million in net income.”
“In the ninth months ended September 30, 2020, Playboy’s Direct-to-Consumer segment contributed $40.2 million in revenue and net income of $0.1 million.”
“In the nine months ended September 30, 2020, Playboy’s Digital Subscriptions and Content segment contributed $15.4 million in revenue and net income of $7.4 million.”
They are profitable across all three of their current business segments.
“Playboy’s return to the public markets presents a transformed, streamlined and high-growth business. The Company has over $400 million in cash flows contracted through 2029, sexual wellness products available for sale online and in over 10,000 major retail stores in the US, and a growing variety of clothing and branded lifestyle and digital gaming products.”
https://www.sec.gov/Archives/edgadata/1803914/000110465921005986/tm2034213-12_defm14a.htm#tSHCF
Growth: Playboy has massive growth in China and massive growth potential in India. “In China, where Playboy has spent more than 25 years building its business, our licensees have an enormous footprint of nearly 2,500 brick and mortar stores and 1,000 ecommerce stores selling high quality, Playboy-branded men’s casual wear, shoes/footwear, sleepwear, swimwear, formal suits, leather & non-leather goods, sweaters, active wear, and accessories. We have achieved significant growth in China licensing revenues over the past several years in partnership with strong licensees and high-quality manufacturers, and we are planning for increased growth through updates to our men’s fashion lines and expansion into adjacent categories in men’s skincare and grooming, sexual wellness, and women’s fashion, a category where recent launches have been well received.” The men’s market in China is about the same size as the entire population of the United States and European Union combined. Playboy is a leading brand in this market. They are expanding into the women’s market too. Did you know CBD toothpaste is huge in China? China loves CBD products and has hemp fields that dwarf those in the US. If Playboy expands their CBD line China it will be huge. Did you know the gambling money in Macau absolutely puts Las Vegas to shame? Technically, it's illegal on the mainland, but in reality, there is a lot of gambling going on in China. https://www.forbes.com/sites/javierhasse/2020/10/19/magic-johnson-and-uncle-buds-cbd-brand-enter-china-via-tmall-partnership/?sh=271776ca411e “In India, Playboy today has a presence through select apparel licensees and hospitality establishments. Consumer research suggests significant growth opportunities in the territory with Playboy’s brand and categories of focus.” “Playboy Enterprises has announced the expansion of its global consumer products business into India as part of a partnership with Jay Jay Iconic Brands, a leading fashion and lifestyle Company in India.” “The Indian market today is dominated by consumers under the age of 35, who represent more than 65 percent of the country’s total population and are driving India’s significant online shopping growth. The Playboy brand’s core values of playfulness and exploration resonate strongly with the expressed desires of today’s younger millennial consumers. For us, Playboy was the perfect fit.” “The Playboy international portfolio has been flourishing for more than 25 years in several South Asian markets such as China and Japan. In particular, it has strategically targeted the millennial and gen-Z audiences across categories such as apparel, footwear, home textiles, eyewear and watches.” https://www.licenseglobal.com/industry-news/playboy-expands-global-footprint-india It looks like they gave COVID the heisman in terms of net damage sustained: “Although Playboy has not suffered any material adverse consequences to date from the COVID-19 pandemic, the business has been impacted both negatively and positively. The remote working and stay-at-home orders resulted in the closure of the London Playboy Club and retail stores of Playboy’s licensees, decreasing licensing revenues in the second quarter, as well as causing supply chain disruption and less efficient product development thereby slowing the launch of new products. However, these negative impacts were offset by an increase in Yandy’s direct-to-consumer sales, which have benefited in part from overall increases in online retail sales so far during the pandemic.” Looks like the positives are long term (Yandy acquisition) and the negatives are temporary (stay-at-home orders).
https://www.sec.gov/Archives/edgadata/1803914/000110465921006093/tm213766-1_defa14a.htm
This speaks to their ability to maintain a financially solvent company throughout the transition phase to the aforementioned areas. They’d say some fancy shit like “expanded business model to encompass four key revenue streams: Sexual Wellness, Style & Apparel, Gaming & Lifestyle, and Beauty & Grooming.” I hear “we’re just biding our time with these trinkets until those dollar dollar bill y’all markets are fully up and running.” But the truth is these existing revenue streams are profitable, scalable, and rapidly expanding Playboy’s e-commerce segment around the world.
"Even in the face of COVID this year, we've been able to grow EBITDA over 100 percent and revenue over 68 percent, and I expect that to accelerate going into 2021," he said. “Playboy is accelerating its growth in company-owned and branded consumer products in attractive and expanding markets in which it has a proven history of brand affinity and consumer spend.”
Also in the SEC filing, the Time Frame:
“As we detailed in the definitive proxy statement, the SPAC stockholder meeting to vote on the transaction has been set for February 9th, and, subject to stockholder approval and satisfaction of the other closing conditions, we expect to complete the merger and begin trading on NASDAQ under ticker PLBY shortly thereafter,” concluded Kohn.
The Players: Suhail “The Whale” Rizvi (HMFIC), Ben “The Bridge” Kohn (CEO), “lil” Suying Liu & “Big” Dong Liu (Young-gun China gang). I encourage you to look these folks up. The real OG here is Suhail Rizvi. He’s from India originally and Chairman of the Board for the new PLBY company. He was an early investor in Twitter, Square, Facebook and others. His firm, Rizvi Traverse, currently invests in Instacart, Pinterest, Snapchat, Playboy, and SpaceX. Maybe you’ve heard of them. “Rizvi, who owns a sprawling three-home compound in Greenwich, Connecticut, and a 1.65-acre estate in Palm Beach, Florida, near Bill Gates and Michael Bloomberg, moved to Iowa Falls when he was five. His father was a professor of psychology at Iowa. Along with his older brother Ashraf, a hedge fund manager, Rizvi graduated from Wharton business school.” “Suhail Rizvi: the 47-year-old 'unsocial' social media baron: When Twitter goes public in the coming weeks (2013), one of the biggest winners will be a 47-year-old financier who guards his secrecy so zealously that he employs a person to take down his Wikipedia entry and scrub his photos from the internet. In IPO, Twitter seeks to be 'anti-FB'” “Prince Alwaleed bin Talal of Saudi Arabia looks like a big Twitter winner. So do the moneyed clients of Jamie Dimon. But as you’ve-got-to-be-joking wealth washed over Twitter on Thursday — a company that didn’t exist eight years ago was worth $31.7 billion after its first day on the stock market — the non-boldface name of the moment is Suhail R. Rizvi. Mr. Rizvi, 47, runs a private investment company that is the largest outside investor in Twitter with a 15.6 percent stake worth $3.8 billion at the end of trading on Thursday (November, 2013). Using a web of connections in the tech industry and in finance, as well as a hearty dose of good timing, he brought many prominent names in at the ground floor, including the Saudi prince and some of JPMorgan’s wealthiest clients.” https://www.nytimes.com/2013/11/08/technology/at-twitter-working-behind-the-scenes-toward-a-billion-dollar-payday.html Y’all like that Arab money? How about a dude that can call up Saudi Princes and convince them to spend? Funniest shit about I read about him: “Rizvi was able to buy only $100 million in Facebook shortly before its IPO, thus limiting his returns, according to people with knowledge of the matter.” Poor guy :(
He should be fine with the 16 million PLBY shares he's going to have though :)
Shuhail also has experience in the entertainment industry. He’s invested in companies like SESAC, ICM, and Summit Entertainment. He’s got Hollywood connections to blast this stuff post-merger. And he’s at least partially responsible for that whole Twilight thing. I’m team Edward btw.
I really like what Suhail has done so far. He’s lurked in the shadows while Kohn is consolidating the company, trimming the fat, making Playboy profitable, and aiming the ship at modern growing markets.
https://www.reuters.com/article/us-twitter-ipo-rizvi-insight/insight-little-known-hollywood-investor-poised-to-score-with-twitter-ipo-idUSBRE9920VW20131003
Ben “The Bridge” Kohn is an interesting guy. He’s the connection between Rizvi Traverse and Playboy. He’s both CEO of Playboy and was previously Managing Partner at Rizvi Traverse. Ben seems to be the voice of the Playboy-Rizvi partnership, which makes sense with Suhail’s privacy concerns. Kohn said this:
“Today is a very big day for all of us at Playboy and for all our partners globally. I stepped into the CEO role at Playboy in 2017 because I saw the biggest opportunity of my career. Playboy is a brand and platform that could not be replicated today. It has massive global reach, with more than $3B of global consumer spend and products sold in over 180 countries. Our mission – to create a culture where all people can pursue pleasure – is rooted in our 67-year history and creates a clear focus for our business and role we play in people’s lives, providing them with the products, services and experiences that create a lifestyle of pleasure. We are taking this step into the public markets because the committed capital will enable us to accelerate our product development and go-to-market strategies and to more rapidly build our direct to consumer capabilities,” said Ben Kohn, CEO of Playboy.
“Playboy today is a highly profitable commerce business with a total addressable market projected in the trillions of dollars,” Mr. Kohn continued, “We are actively selling into the Sexual Wellness consumer category, projected to be approximately $400 billion in size by 2024, where our recently launched intimacy products have rolled out to more than 10,000 stores at major US retailers in the United States. Combined with our owned & operated ecommerce Sexual Wellness initiatives, the category will contribute more than 40% of our revenue this year. In our Apparel and Beauty categories, our collaborations with high-end fashion brands including Missguided and PacSun are projected to achieve over $50M in retail sales across the US and UK this year, our leading men’s apparel lines in China expanded to nearly 2500 brick and mortar stores and almost 1000 digital stores, and our new men’s and women’s fragrance line recently launched in Europe. In Gaming, our casino-style digital gaming products with Scientific Games and Microgaming continue to see significant global growth. Our product strategy is informed by years of consumer data as we actively expand from a purely licensing model into owning and operating key high-growth product lines focused on driving profitability and consumer lifetime value. We are thrilled about the future of Playboy. Our foundation has been set to drive further growth and margin, and with the committed capital from this transaction and our more than $180M in NOLs, we will take advantage of the opportunity in front of us, building to our goal of $100M of adjusted EBITDA in 2025.”
https://www.businesswire.com/news/home/20201001005404/en/Playboy-to-Become-a-Public-Company
Also, according to their Form 4s, “Big” Dong Liu and “lil” Suying Liu just loaded up with shares last week. These guys are brothers and seem like the Chinese market connection. They are only 32 & 35 years old. I don’t even know what that means, but it's provocative.
https://www.secform4.com/insider-trading/1832415.htm
https://finance.yahoo.com/news/mountain-crest-acquisition-corp-ii-002600994.html
Y’all like that China money?
“Mr. Liu has been the Chief Financial Officer of Dongguan Zhishang Photoelectric Technology Co., Ltd., a regional designer, manufacturer and distributor of LED lights serving commercial customers throughout Southern China since November 2016, at which time he led a syndicate of investments into the firm. Mr. Liu has since overseen the financials of Dongguan Zhishang as well as provided strategic guidance to its board of directors, advising on operational efficiency and cash flow performance. From March 2010 to October 2016, Mr. Liu was the Head of Finance at Feidiao Electrical Group Co., Ltd., a leading Chinese manufacturer of electrical outlets headquartered in Shanghai and with businesses in the greater China region as well as Europe.”
Dr. Suying Liu, Chairman and Chief Executive Officer of Mountain Crest Acquisition Corp., commented, “Playboy is a unique and compelling investment opportunity, with one of the world’s largest and most recognized brands, its proven consumer affinity and spend, and its enormous future growth potential in its four product segments and new and existing geographic regions. I am thrilled to be partnering with Ben and his exceptional team to bring his vision to fruition.”
https://www.businesswire.com/news/home/20201001005404/en/Playboy-to-Become-a-Public-Company
These guys are good. They have a proven track record of success across multiple industries. Connections and money run deep with all of these guys. I don’t think they’re in the game to lose.
I was going to write a couple more paragraphs about why you should have a look at this but really the best thing you can do is read this SEC filing from a couple days ago. It explains the situation in far better detail. Specifically, look to page 137 and read through their strategy. Also, look at their ownership percentages and compensation plans including the stock options and their prices. The financials look great, revenue is up 90% Q3, and it looks like a bright future.
https://www.sec.gov/Archives/edgadata/1803914/000110465921005986/tm2034213-12_defm14a.htm#tSHCF
I’m hesitant to attach this because his position seems short term, but I’m going to with a warning because he does hit on some good points (two are below his link) and he’s got a sizable position in this thing (500k+ on margin, I think). I don’t know this guy but he did look at the same publicly available info and make roughly the same prediction, albeit without the in depth gambling or cannabis mention. You can also search reddit for ‘MCAC’ and very few relevant results come up and none of them even come close to really looking at this thing.
https://docs.google.com/document/d/1gOvAd6lebs452hFlWWbxVjQ3VMsjGBkbJeXRwDwIJfM/edit?usp=sharing
“Also, before you people start making claims that Playboy is a “boomer” company, STOP RIGHT THERE. This is not a good argument. Simply put. The only thing that matters is Playboy’s name recognition, not their archaic business model which doesn’t even exist anymore as they have completely repurposed their business.”
“Imagine not buying $MCAC at a 400M valuation lol. Streetwear department is worth 1B alone imo.”
Considering the ridiculous Chinese growth as a lifestyle brand, he’s not wrong.
Current Cultural Significance and Meme Value: A year ago I wouldn’t have included this section but the events from the last several weeks (even going back to tsla) have proven that a company’s ability to meme and/or gain social network popularity can have an effect. Tik-tok, Snapchat, Twitch, Reddit, Youtube, Facebook, Twitter. They all have Playboy stuff on them. Kids in middle and highschool know what Playboy is but will likely never see or touch one of the magazines in person. They’ll have a Playboy hoodie though. Crazy huh? A lot like GME, PLBY would hugely benefit from meme-value stock interest to drive engagement towards their new business model while also building strategic coffers. This interest may not directly and/or significantly move the stock price but can generate significant interest from larger players who will.
Bull Case: The year is 2025. Playboy is now the world leader pleasure brand. They began by offering Playboy licensed gaming products, including gambling products, direct to consumers through existing names. By 2022, demand has skyrocketed and Playboy has designed and released their own gambling platforms. In 2025, they are also a leading cannabis brand in the United States and Canada with proprietary strains and products geared towards sexual wellness. Cannabis was legalized in the US in 2023 when President Biden got glaucoma but had success with cannabis treatment. He personally pushes for cannabis legalization as he steps out of office after his first term. Playboy has also grown their brand in China and India to multi-billion per year markets. The stock goes up from 11ish to 100ish and everyone makes big gains buying somewhere along the way.
Bear Case: The United States does a complete 180 on marijuana and gambling. President Biden overdoses on marijuana in the Lincoln bedroom when his FDs go tits up and he loses a ton of money in his sports book app after the Fighting Blue Hens narrowly lose the National Championship to Bama. Playboy is unable to expand their cannabis and gambling brands but still does well with their worldwide lifestyle brand. They gain and lose some interest in China and India but the markets are too large to ignore them completely. The stock goes up from 11ish to 13ish and everyone makes 15-20% gains.
TL;DR: Successful technology/e-commerce investment firm took over Playboy to turn it into a porn, online gambling/gaming, sports book, cannabis company, worldwide lifestyle brand that promotes sexual wellness, vetern access, women-ownership, minority-ownership, and “pleasure for all”. Does a successful online team reinventing an antiquated physical copy giant sound familiar? No options yet, shares only for now. $11.38 per share at time of writing. My guess? $20 by the end of February. $50 by EOY. This is not financial advice. I am not qualified to give financial advice. I’m just sayin’ I would personally use a Playboy sports book app while smoking a Playboy strain specific joint and it would be cool if they did that. Do your own research. You’d probably want to start here:
WARNING - POTENTIALLY NSFW - SEXY MODELS AHEAD - no actual nudity though
https://s26.q4cdn.com/895475556/files/doc_presentations/Playboy-Craig-Hallum-Conference-Investor-Presentation-11_17_20-compressed.pdf
Or here:
https://www.mcacquisition.com/investor-relations/default.aspx
Jimmy Chill: “Get into any SPAC at $10 or $11 and you are going to make money.”
STL;DR: Buy MCAC. MCAC > PLBY couple weeks. Rocketship. Moon.
Position: 5000 shares. I will buy short, medium, and long-dated calls once available.
submitted by jeromeBDpowell to SPACs [link] [comments]

Women's group warns of major sex trafficking if casino plan goes through

Hawaii casino could increase sex trafficking, report warns. Excerpt:
A state agency that works toward equality for women and girls issued a blistering report Monday outlining the ills associated with casinos, particularly as they relate to the sex trade...“Casinos bring more than just revenue. They bring a bachelor party culture,” said Khara Jabola-Carolus, executive director of the Hawaii State Commission on the Status of Women...
= = =
Some of the social science assertions coming from Khara Jabola-Carolus’s report: Gambling With Women’s Safety: – A Feminist Assessment of Proposed Resort-Casino:
Nationally, a person being sex trafficked in a hotel/resort setting is forced, coerced, or intimidated to perform sex acts on an average of 5 to 10 customers per day. (p. 2)
Sex trafficking is distinct from prostitution: sex trafficking is the means, prostitution, pornography and stripping are the ends. Both are relatively new problems in Hawaiʻi that became systematic after Western contact. (p. 2)
According to law enforcement (Spotlight) data compiled by The Avery Center, there (is an estimate of) a total 18,375 sex trafficking victims in Honolulu...(that's a total of)...23,887,812 commercial sex acts per year performed by sex trafficking victims in Honolulu. (p. 3)
= = =
Viewpoints on sex trafficking from other sources:
Reason, May 2019 The Sex Trafficking Panic:
When police charged New England Patriots owner Robert Kraft with soliciting prostitution, the press said the police rescued sex slaves. "They were women who were from China, who were forced into sex slavery," said Trevor Noah on The Daily Show. We're told this happens all the time.
It's bunk, says Reason Associate Editor Elizabeth Nolan Brown. In the Robert Kraft case, she points out, "They had all these big announcements at first saying they had busted up an international sex trafficking ring, implying these women weren't allowed to leave.” But now prosecutors acknowledge that there was no trafficking. The women were willing sex workers...
Politicians tell us that thousands of children are forced into the sex trade. "Three-hundred thousand American children are at risk!" said Rep. Ann Wagner on the floor of Congress…
...celebrities...perpetuate the myth that sex slavery is rampant. "You can go online and buy a child for sex. It's as easy as ordering a pizza," says Amy Schumer. "Thousands of children are raped every day!" says comedian Seth Meyers...
The Guardian, a decade ago: Prostitution and trafficking – the anatomy of a moral panic
There is something familiar about the tide of misinformation which has swept through the subject of sex trafficking in the UK: it flows through exactly the same channels as the now notorious torrent about Saddam Hussein's weapons. In the story of UK sex trafficking, the conclusions of academics who study the sex trade have been subjected to the same treatment as the restrained reports of intelligence analysts who studied Iraqi weapons – stripped of caution, stretched to their most alarming possible meaning and tossed into the public domain. There, they have been picked up by the media who have stretched them even further in stories which have then been treated as reliable sources by politicians, who in turn provided quotes for more misleading stories...
("...the conclusions of academics who study the sex trade..." More than a few academics will regularly come up with the exact conclusions they want to find.)
The New Republic, Oct. 2015: "Human Trafficking" Has Become a Meaningless Term – Politicians and activists often abuse it to push for punitive laws or to incite moral panic.
President Barack Obama has famously declared that "human trafficking" is "modern-day slavery." He's also said that it "is a crime that can take many forms." The second definition is a good deal more accurate. "Trafficking," in practice, is less a clear-cut crime than a call to moral panic. The vagueness of the definition allows or even encourages governments, organizations, and researchers to claim that there are tens of millions of trafficking victims worldwide on the basis of little more than hyperbolic guesses...
According to Alison Bass, author of Getting Screwed: Sex Workers and the Law, "trafficking has become a new name for an old problem, which is largely teenage runaways." Young people who run away from abusive situations at home, and who sell sex to survive, are considered trafficking victims by default under many federal and state laws. This, despite the fact that hardly any teen runaways have pimps or traffickers, according to a John Jay College of Criminal Justice study. Most see sex work as the best way to support themselves on the street, given the limited legal and social service options available for children who run away from home. And most, Bass told me, do not travel out of their own town or city, much less out of the country...
submitted by Markdd8 to Hawaii [link] [comments]

Not just another HITI / HITIF post... Serious DD incl. valuation analysis

Not just another HITI / HITIF post... Serious DD incl. valuation analysis
Reposting this DD after it was removed by mods first time around. Potential offending points have been removed.
---
Some of the market stats are a little outdated (market cap, current multiples, etc.) but are correct as of Feb-06. This was originally written for another purpose.
Not a financial advisor, do your own DD. I am long HITI and have an expectation of a long term hold on this stock.
Overview
  • High Tide Canada-based cannabis retail company, operating under multiple brands. It operates under 3 core divisions:
  1. Brick and mortar retail – 4 key brands with just under 70 locations in Canada. Brands include: Canna Cabana, New Leaf, Meta Cannabis and Kushbar. Forecast to have around 115 stores by end of 2021
  2. Online retail – has 2 brands, both of which attract millions of viewers per month – Grasscity.com and CBDcity.com
  3. Wholesale – manufacturer of paraphernalia in US and Canada. Number of products are branded with various celebrities, Snoop Dogg, Paramount Pictures, Trailer Park Boys and many more
  • Has good c-level execs and experienced executive board; hold significant stake in the business. CEO Raj Grover holds just over 21% of the shares
  • Currently has a market cap of around $280m. Still significant upside to the valuation – see analysis later in post
Investment Merits
Very strong market growth:
  • Business has demonstrated growth both organically (through new store openings, more online sales and greater wholesale sales), as well as inorganically through M&A
  • Growth in markets which High Tide has a physical presence in is expected to be very strong. North American cannabis market (Canada and US) is forecast to grow by 30% a year to 2027 (source: research and markets)
  • Analysts covering High Tide are forecasting growth in excess of this, which is positive to see and implies capturing market share
  • New markets / geographies ‘opening up’, legalizing and regulating cannabis is also an exciting and realistic prospect for incremental growth:
  1. The US federal legalization debate is on the table
  2. Many other countries are considering this too and High Tide is well positioned for these; this is catalyzed by the fact that government debt has increased significantly as part of the response to the COVID-19 health crisis. This needs to be repaid somehow, and increasing tax rates on existing taxes is an unpopular political move. Finding new tax revenues is a more palatable way of increasing tax revenues for governments. This is especially important in countries where elections are upcoming.
  • Personally I do expect to see this accelerate the agenda for the regulation and legalization of cannabis in many new countries
  • Whilst predominantly Canada and US based, High Tide does have presence in some markets where cannabis is not regulated or legalized, the UK for example (~10% of Grasscity sales are made here) and so it is well positioned with a strong and established brand to capitalize on this opportunity, when / if the market ‘opens up’
Regulation
  • High Tide benefits from the regulatory focus and overhang on the cannabis retail sector as it represents a strong barrier to entry, making it more challenging for new competitors to enter market
  • Participants in the market need to have licenses and ensure consistent compliance with laws to continue operating – failure to comply can result in significant financial penalties
  • Personally I normally don’t like investing into retail. There are usually fairly limited barriers to entry, minimal differentiation and negligible customer loyalty, however the cannabis market does have different characteristics in this respect and makes it a more compelling proposition
  • Regulation also benefits those with scale, something High Tide has as the leading player in the market. It costs money to obtain and retain licences to operate and it costs money to ensure compliance with all the laws and regulations and that all staff are acting in accordance with these
  • Some parallels in this respect which can be drawn to casino gaming in casinos; you don’t see new casinos popping up at the same rate which you see new restaurants or apparel stores opening
Demand
  • There’s a lot to like about the demand dynamics for High Tide. It’s vice-nature means that demand is less correlated to disposable incomes. Given where we are in economic cycle, especially important consideration
  • For those doubting this, check alcohol, tobacco or gambling expenditure across economic cycles historically, for a proxy
Strong performance throughout COVID-19 crisis
  • Despite heavy weighting towards brick and mortar, (the most hard hit part of retail) it has effectively managed the shift to online, which is a positive
  • Has relied on government support and financial assistance in the form of job retention schemes (address in more detail later in post)
  • This demonstrates management are capable and have effectively navigated the challenging situation
Data
  • Massively summarized from the other purpose, however, they have unique access to supply chain data which could be monetized effectively and generate strong levels of recurring revenues
  • Other established sectors have a trusted party with such unique access to data (e.g. alcohol, lithium, different foods, etc.) and the opportunity here is enormous
  • I would like to see High Tide capitalize on this
Forecasts financials & analysts
  • Currently 2 analysts covering High Tide, both have a buy rating on the business
  • Their coverage is slightly outdated (expect this being updated soon and a further catalyst for positive price action) and their price targets are 60c; at the time their reports were published, they were forecasting a 4x upside (HITI was trading at ~15c)
  • Same analysts also forecasting strong growth - 77% CAGR to 2022. They are forecasting revenues of around $250m and EBITDA of $46m. A reminder here, these are professional analysts, not YouTube students – these come from their financial models, the assumptions of which are discussed with management
https://preview.redd.it/csw4p0vpoxg61.png?width=602&format=png&auto=webp&s=143ac8f94e6fcd4df3d50d41f513da45367f28f1
Valuation
  • Going to go quick here, however, High Tide is currently valued at a significant discount to the other listed peers
  • Looking at EV / FY+1 Sales multiples – EBITDA not meaningful as some of the peer group are EBITDA negative and High Tide itself has only recently become EBITDA positive
https://preview.redd.it/zo0vr7vqoxg61.png?width=262&format=png&auto=webp&s=686be7e82e3fbfb3d7021823ed84f2cf795b49d2
  • Personally, I think Planet13 is the most comparable given its business model
  • Taking both Planet13 multiple and peer group average multiple, this is then applied to High Tide’s forecast FY+1 sales to calculate an enterprise value – this is adjusted for net debt to get to a market capitalization and then divided by the share count to get an implied share price
  • The table below shows the implied stock price valuations from this analysis
https://preview.redd.it/qp6qea1soxg61.png?width=277&format=png&auto=webp&s=3333aa9ea7213961a44bc37e4292bad316872b48
NB – assumed the following:
  1. Net debt will change in coming year given the capital structure and a large number of convertible notes – this has been ignored given it will have small impact on the price
  2. The share count will change as a result of dilution from various instruments – if this bothers you massively then look at the valuation discount on the basis of the enterprise value as it does not impact this (and only slightly on the market cap given minimal impacts to cash from instrument execution, etc.)
  3. Not accounting for any stock split, consolidation or any other M&A deals
  4. The FY21 financials are on the basis of the mean broker estimates from Thomson Reuters – Seeking Alpha has different and slightly outdated ones
Investment Risks & Mitigants / Outstanding DD points
Exposure to changing regulation
  • US is only a small part of the market which High Tide addresses, while a change in regulation would have a big impact on the company, currently it is unlikely this would happen, given the discussions about potential federal legalization
  • Canada regulation is established and not going anywhere
  • Other countries likely to legalize and regulate cannabis, as outlined earlier
Dilution
  • No escaping that there will be some significant dilution for shareholders, as pointed out in the table below, but this should be already priced into the stock
  • Potential that new equity issuances could occur to help finance growth, but provided this growth is delivered, it should be accretive for the stock price
https://preview.redd.it/aaslgozsoxg61.png?width=463&format=png&auto=webp&s=767bffe9d6906bf21340aecd884cfad5ec7219c4
Potentially misleading cost basis information
  • A risk that investors need to be aware with for all companies which have relied on government financial support during COVID-19 measures. Such support has resulted in the number of businesses going bankrupt decreasing massively – this is at a lower level than it ever normally is and is masking some real underlying issues within companies. As investors we need to be open eyed about this
  • As High Tide has benefited from support in the form of the Canada’s Emergency Wage Support scheme, there is the risk that once this is lifted it may become apparent that the cost base has not been effectively managed
  • Personally, I think this is mitigated by the synergy analysis conducted as part of the M&A. A full cost base analysis would have been conducted to calculate the potential $8.4m synergies so strong likelihood that this is under control, but should keep on our radar and reassess
Marketing expenses and celebrity licenses
  • Need more information to ascertain whether these are underpinned by a compelling ROI. Seen a lot of people suggest this is a great positive, but the impact on sales volumes from these is unknown, as is the terms of these license agreements (e.g. split between upfront fee vs. volume-based fee)
  • No escaping the fact that it is an increased cost and so need to understand the ROI this generates to determine whether it really is compelling
  • Is there really more demand to pay a premium for Snoop Dogg bongs, Guns n Roses papers, Cheech & Chong grinders, or whatever they may be?
  • So far management have suggested this has been helpful in driving new sales, but this is something to dig into more
    TLDR
Despite the recent rally in stock price, the business remains undervalued on a relative basis versus its peers (analysis in body of post). There is a compelling investment case for High Tide where in my opinion the merits of the investment outweigh the risks. Clearly given the small cap nature of the stock, this is inherently more volatile than larger blue chip stocks and carries with it a degree of risk.
submitted by AlexM-YT to pennystocks [link] [comments]

Detailed DD post [re-post after r/pennystocks deleted it]

Detailed DD post [re-post after pennystocks deleted it]
I posted this yesterday morning (UK time) but after 5 hours or so, pennystocks deleted the original post. A few people messaged me asking for it to be shared in a few High Tide specific pages. So here it is! Hope this is OK for the mods here?
--
This is my first time posting a DD post – a friend of mine who moderates on SPACs has shared some analysis I have written previously, but I’m keen to share this here, and see if there is any appetite for sharing my own personal written DD I have on the 30 stocks I have across a number of different portfolios.
I have modified this format, as it was originally a script for a video which I created on the stock. If you prefer to listen – check it out here: https://youtu.be/qsjwU7kkPsw
Some of the market stats (market cap, current multiples, etc.) are correct as of Feb-06, and clearly a little outdated since the price movements.
Not a financial advisor, do your own DD. I am long HITI and have an expectation of a long term hold on this stock.
Overview
  • High Tide Canada-based cannabis retail company, operating under multiple brands. It operates under 3 core divisions:
  1. Brick and mortar retail – 4 key brands with just under 70 locations in Canada. Brands include: Canna Cabana, New Leaf, Meta Cannabis and Kushbar. Forecast to have around 115 stores by end of 2021
  2. Online retail – has 2 brands, both of which attract millions of viewers per month – Grasscity.com and CBDcity.com
  3. Wholesale – manufacturer of paraphernalia in US and Canada. Number of products are branded with various celebrities, Snoop Dogg, Paramount Pictures, Trailer Park Boys and many more
  • Has good c-level execs and experienced executive board; hold significant stake in the business. CEO Raj Grover holds just over 21% of the shares
  • Currently has a market cap of around $280m. Still significant upside to the valuation – see analysis later in post
Investment Merits
Very strong market growth:
  • Business has demonstrated growth both organically (through new store openings, more online sales and greater wholesale sales), as well as inorganically through M&A
  • Growth in markets which High Tide has a physical presence in is expected to be very strong. North American cannabis market (Canada and US) is forecast to grow by 30% a year to 2027 (source: research and markets)
  • Analysts covering High Tide are forecasting growth in excess of this, which is positive to see and implies capturing market share
  • New markets / geographies ‘opening up’, legalizing and regulating cannabis is also an exciting and realistic prospect for incremental growth:
  1. The US federal legalization debate is on the table
  2. Many other countries are considering this too and High Tide is well positioned for these; this is catalyzed by the fact that government debt has increased significantly as part of the response to the COVID-19 health crisis. This needs to be repaid somehow, and increasing tax rates on existing taxes is an unpopular political move. Finding new tax revenues is a more palatable way of increasing tax revenues for governments. This is especially important in countries where elections are upcoming.
  • Personally I do expect to see this accelerate the agenda for the regulation and legalization of cannabis in many new countries
  • Whilst predominantly Canada and US based, High Tide does have presence in some markets where cannabis is not regulated or legalized, the UK for example (~10% of Grasscity sales are made here) and so it is well positioned with a strong and established brand to capitalize on this opportunity, when / if the market ‘opens up’
Regulation
  • High Tide benefits from the regulatory focus and overhang on the cannabis retail sector as it represents a strong barrier to entry, making it more challenging for new competitors to enter market
  • Participants in the market need to have licenses and ensure consistent compliance with laws to continue operating – failure to comply can result in significant financial penalties
  • Personally I normally don’t like investing into retail. There are usually fairly limited barriers to entry, minimal differentiation and negligible customer loyalty, however the cannabis market does have different characteristics in this respect and makes it a more compelling proposition
  • Regulation also benefits those with scale, something High Tide has as the leading player in the market. It costs money to obtain and retain licences to operate and it costs money to ensure compliance with all the laws and regulations and that all staff are acting in accordance with these
  • Some parallels in this respect which can be drawn to casino gaming in casinos; you don’t see new casinos popping up at the same rate which you see new restaurants or apparel stores opening
Demand
  • There’s a lot to like about the demand dynamics for High Tide. It’s vice-nature means that demand is less correlated to disposable incomes. Given where we are in economic cycle, especially important consideration
  • For those doubting this, check alcohol, tobacco or gambling expenditure across economic cycles historically, for a proxy
Strong performance throughout COVID-19 crisis
  • Despite heavy weighting towards brick and mortar, (the most hard hit part of retail) it has effectively managed the shift to online, which is a positive
  • Has relied on government support and financial assistance in the form of job retention schemes (address in more detail later in post)
  • This demonstrates management are capable and have effectively navigated the challenging situation
Data
  • Massively summarized from the video, (and my video on KERN) so check that out if interested in this point, however, they have unique access to supply chain data which could be monetized effectively and generate strong levels of recurring revenues
  • Other established sectors have a trusted party with such unique access to data (e.g. alcohol, lithium, different foods, etc.) and the opportunity here is enormous
  • I would like to see High Tide capitalize on this
Forecasts financials & analysts
  • Currently 2 analysts covering High Tide, both have a buy rating on the business
  • Their coverage is slightly outdated (expect this being updated soon and a further catalyst for positive price action) and their price targets are 60c; at the time their reports were published, they were forecasting a 4x upside (HITI was trading at ~15c)
  • Same analysts also forecasting strong growth - 77% CAGR to 2022. They are forecasting revenues of around $250m and EBITDA of $46m. A reminder here, these are professional analysts, not YouTube students – these come from their financial models, the assumptions of which are discussed with management
​
https://preview.redd.it/5pwznbe5xmg61.png?width=602&format=png&auto=webp&s=bb1be853d9db5eaa7dc3c7b26630a173bbd064cf
Valuation
  • Going to go quick here, its explained more slowly in the video but High Tide is currently valued at a significant discount to the other listed peers
  • Looking at EV / FY+1 Sales multiples – EBITDA not meaningful as some of the peer group are EBITDA negative and High Tide itself has only recently become EBITDA positive
​
https://preview.redd.it/l52oajp6xmg61.png?width=342&format=png&auto=webp&s=e31e1944101c6488a24f470bc3b91744f4c2dccf
  • Personally, I think Planet13 is the most comparable given its business model
  • Taking both Planet13 multiple and peer group average multiple, this is then applied to High Tide’s forecast FY+1 sales to calculate an enterprise value – this is adjusted for net debt to get to a market capitalization and then divided by the share count to get an implied share price
  • The table below shows the implied stock price valuations from this analysis
​
https://preview.redd.it/2j51fwigxmg61.png?width=406&format=png&auto=webp&s=f678c5c66ced846ac45fa698c7e454f71a4232b6
NB – assumed the following:
  1. Net debt will change in coming year given the capital structure and a large number of convertible notes – this has been ignored given it will have small impact on the price
  2. The share count will change as a result of dilution from various instruments – if this bothers you massively then look at the valuation discount on the basis of the enterprise value as it does not impact this (and only slightly on the market cap given minimal impacts to cash from instrument execution, etc.)
  3. Not accounting for any stock split, consolidation or any other M&A deals
  4. The FY21 financials are on the basis of the mean broker estimates from Thomson Reuters – Seeking Alpha has different and slightly outdated ones
Investment Risks & Mitigants / Outstanding DD points
Exposure to changing regulation
  • US is only a small part of the market which High Tide addresses, while a change in regulation would have a big impact on the company, currently it is unlikely this would happen, given the discussions about potential federal legalization
  • Canada regulation is established and not going anywhere
  • Other countries likely to legalize and regulate cannabis, as outlined earlier
Dilution
  • No escaping that there will be some significant dilution for shareholders, as pointed out in the table below, but this should be already priced into the stock
  • Potential that new equity issuances could occur to help finance growth, but provided this growth is delivered, it should be accretive for the stock price
​
https://preview.redd.it/t0im6idhxmg61.png?width=602&format=png&auto=webp&s=4bff366e68eeeadd5ac49ab5d97885685a327a6b
Potentially misleading cost basis information
  • A risk that investors need to be aware with for all companies which have relied on government financial support during COVID-19 measures. Such support has resulted in the number of businesses going bankrupt decreasing massively – this is at a lower level than it ever normally is and is masking some real underlying issues within companies. As investors we need to be open eyed about this
  • As High Tide has benefited from support in the form of the Canada’s Emergency Wage Support scheme, there is the risk that once this is lifted it may become apparent that the cost base has not been effectively managed
  • Personally, I think this is mitigated by the synergy analysis conducted as part of the M&A. A full cost base analysis would have been conducted to calculate the potential $8.4m synergies so strong likelihood that this is under control, but should keep on our radar and reassess
Marketing expenses and celebrity licenses
  • Need more information to ascertain whether these are underpinned by a compelling ROI. Seen a lot of people suggest this is a great positive, but the impact on sales volumes from these is unknown, as is the terms of these license agreements (e.g. split between upfront fee vs. volume-based fee)
  • No escaping the fact that it is an increased cost and so need to understand the ROI this generates to determine whether it really is compelling
  • Is there really more demand to pay a premium for Snoop Dogg bongs, Guns n Roses papers, Cheech & Chong grinders, or whatever they may be?
  • So far management have suggested this has been helpful in driving new sales, but this is something to dig into more
If you want to check out the video, it would be appreciated: https://youtu.be/qsjwU7kkPsw
submitted by AlexM-YT to HighTideInc [link] [comments]

“FuboTV DD/Analysis” [BULLISH] {FUBO}

"FubuTV DD" [BULLISH] {FUBU}
Introduction
“FuboTV ($FUBO) is an American streaming television service that focuses primarily on channels that distribute live sports, including NFL, MLB, NBA, NHL, MLS and international soccer, plus news, network television series and movies.
Launched on January 1, 2015 as a soccer streaming service, FuboTV changed to an all-sports service in 2017 and then to a virtual multichannel video programming distributor (vMVPD) model. As a vMVPD, FuboTV still calls itself sports-first but its expanded channel lineup targets cord cutters, offering a selection of major cable channels and OTT-originated features that can be streamed through smart TVs, mobile and tablets and the web. The service is available in the United States, Canada and Spain as of 2018."
From their home page:
They are the only competitors in their space of digital sports broadcasting, offer 4K streaming and upscaling of live sports, cloud DVR capability ranging from 250 or 1000 hours on standard plans, and is available on Roku, Apple TV, Amazon Fire TV, Chromecast, Samsung Smart TVs, Xbox One, Android TV, Android Smart TVs, and Android/iOS smartphones and tablets, with plans ranging from $24.99/month to $79.99/month (not including add-ons).
They have also recently acquired one company and have made plans to acquire another to allow for in-house sports betting. They have stated in a press release that they plan to release a sportsbook before the end of the year. This will push them into a broader spectrum outside of only TV and sports streaming, and into the sports betting sector along with DraftKings ($DKNG), FanDuel ($PDYPY), and Penn National Gaming ($PENN).
Plans and Add-ons
FuboTV offers three standardized plans as of February 8, 2021: the Family plan is priced at $64.99/month (normally $75.97/month), Elite at $79.99/month (normally $100.95/month), and Latino Quarterly at $24.99/month, along with offering additional add-ons. Each plan offers a range of channels, cloud DVR capabilities (which allows fast-forwarding through commercials), and casting to multiple devices simultaneously. Only the Elite plan does not offer a 7-day free trial (Channels page).
The Family plan includes 117 channels (mostly news and entertainment with roughly 40 that offer sports, including ESPN), up to 250 hours of DVR space, and casting to 3 devices at once. The quarterly prepaid includes a free upgrade to 1000 hours of DVR space and 5 casting devices at home with 3 on the go (Channels page).
The Elite plan includes 164 channels (includes an additional “47 entertainment channels”), up to 1000 hours of DVR space, and casting to 5 devices at home with 3 on the go. This plan does not offer a quarterly prepaid (Channels page).
The Latino Quarterly plan includes 250 hours of DVR space and can be streamed on up to 3 devices at once, but only has 32 channels. This plan needs to be prepaid every 3 months for a total charge of $74.97 and does not offer a monthly service (Channels page).
Upgrades include additional DVR space--1000 hours for an additional $6.99/month for the Family and Latino Quarterly--and increased device casting--an additional 2 devices at home with 3 on the go for another $9.99/month for the Family and Latino Quarterly plans. You can also add a variety of channels and sports packages (the Latino Quarterly has fewer channel add-ons compared to the Family and Elite plans, which both have the same channel varieties). Sports Plus with NFL RedZone is an additional $10.99/month, but includes all professional and college sports broadcasting services for football, basketball, baseball, hockey, tennis, fighting, etc. (Channels page).
Fubo has recently removed its former Standard plan, which included only 65 channels, up to 2 casting devices, and only 30 hours of DVR support for $60/month.
Financials and Growth
Fubo has yet to file an annual report as they have gone public in October of 2020, but they have filed a 10-Q for Q3 2020. All numbers in thousands.
Assets-
Between December 31, 2019 and September of 2020, assets have increased from $368,225 to $799,313 (a 117% increase) . Total current assets increased from $17,973 to $58,016, but accounts receivable decreased from $8,904 to $6,975--this may be attributed to the increase in prepaid subscriptions which increased from $1,445 to $12,177 which shows strong customer satisfaction and retention.
Liabilities-
Liabilities have increased from $145,049 to $290,376 (a 100% increase). The largest contributors to their liabilities are “Due to related parties” increasing from $665 to $85,847, “Warrant liabilities” increasing from $24 to $28,085, and “Accounts payable” from $36,373 to $61,679. Long-term borrowings have decreased from $43,982 to $25,905.
Revenues-
Subscription revenues increased by $53,433, totaling $92,945 for the year. Total revenues including advertisements and licensing have increased by $61,202, totaling $112,669 for the year and an increase of 47% YOY. Q4 revenue is estimated to be between $94,000 and $98,000 which would be a *77-84% *increase YOY.
Expenses-
Subscriber related expenses total $114,315 for the year. Total expenses have totaled $500,249 for the year.
Subscribers-
Ended Q3 with 455,000 paid subscribers, a YOY increase of 58%, and plans to end 2020 with over 545,000, an increase of 72% YOY.
Competition
Its closest competitors are Hulu + Live TV (owned by Disney ($DIS)), YouTube TV (owned by Alphabet ($GOOG)), and Sling TV (owned by Dish Network ($DISH)).
Hulu + Live TV
YouTube TV
Sling TV Blue
Sling TV Orange
The vMVPD Sector
Cord-cutting has become increasingly popular over the last few years with consumers dropping traditional cable and satellite networks in favor of streaming services--such as Hulu, Netflix, Disney+, etc.--and vMVPD services.
In 2019 alone, 6.3 million people cut their cable connection, totaling 39.3 million. In a survey of what they might miss most from cable networks, 52% said they don’t miss anything, 23% missed live events on TV, 22% missed news, and 19% missed live sports. Although not all of those that miss aspects of cable will pay for another subscription service, the sentiment exists for a sports-focused platform that offers other large networks as well.
Another report by Parks Associates reveals that 17% of vMVPD subscribers switched from traditional TV within the last twelve months. In the same report, a survey conducted on current broadband households determined that 43% were “likely to switch to a… vMVPD within the next 12 months." The potential growth exists for the live digital broadcasting space, although it is slowing down.
With the spread of COVID and quarantines, people have been spending more time at home. When things open and quarantines end, that will be the true test for these providers as people will spend less time watching TV.
The Sports Betting Sector
Legal sports betting has taken a huge leap in recent years with the introduction of online sports betting; the ability to place wagers from anywhere at any time and have instant gratification has boomed with its slow legalization. This sector has a forecasted value of $150 billion with other competitors already having a completed project and vast market share. In 2019, DraftKings ($DKNG) and FanDuel (PDYPY) controlled 83% of the market share.
FuboTV plans to join into this space with its own sportsbook. Their recent acquisition of Balto Sports in December of 2020, whose business was in simulating fantasy sports games, is Fubo’s first step into sports wagering. They plan to create a free-to-play gaming system alongside online sports wagering.
Their next planned acquisition, which was announced in January of 2021, will be to acquire Vigtory, a sports betting and interactive gaming company. According to BusinessWire, they plan to utilize Vigtory’s “sportsbook platform and digital gaming assets, and its consumer-driven betting technology, to develop a frictionless betting experience for fubo’s customers."
These recent acquisitions set Fubo up to create an all-in-one viewing and betting experience, which could add new customers to their subscriber list and seal them into online wagering.
It has been over two years since the Supreme Court has denied the federal ban on sports betting, which would have made online betting illegal in all of the United States. Currently, more than two dozen states have legalized sports betting, but most have only legalized in-person betting. More states may be willing to legalize to take advantage of the increased revenues and taxes associated with gambling and online wagering. As of 2020, six additional states plan to legalize some form of betting, although some are only allowing in-person. There are an additional 14 states that are considering the notion to allow legal gambling, whether in-person, online, or tribal.
Management and Investors
David Gandler - CEO / Director / Co-Founder
Appointed as CEO and director in April of 2020. Prior to Fubo, Gandler had a 15 year career in marketing and advertising in local broadcast and cable TV within both general and Hispanic markets at companies such as Time Warner, Telemundo, and Scripps Networks Interactive.
Alberto Horihuela - CMO / Co-founder
In charge of marketing, Horihuela was head of Latin America for SVOD service DramaFever.
Simone Nardi - CFO
Nardi has worked as SVP and CFO of Scripps Networks Interactive where he was responsible for the finance and strategic planning for the company’s international business. Was also a key player in refinancing TVN S.A.’s billion dollar debt.
Large Investors
Analysts and Estimates
Average analyst ratings put Fubo at a Buy to Strong Buy rating with an average price target of $45.50 with a high of $60 and a low of $30. EPS estimates are estimated to be -5.23 for 2020 and -1.64 for 2021.
Currently has a short float of about 75%, but the short volume has been holding at roughly 15-20% over the last month and has drastically declined from its October short volume of over 50%.
Originally valued at $700 million less than a year ago, a current valuation of $3.19 billion is respectable for this company and is on par for its current performance.
Risks
Final Thoughts / TL;DR
With its drastic growth over the last year (400% in the last 4 months), support from FaceBank and well-known investors, and plans to join the sports betting sector, FuboTV has potential to become a household name and grow well beyond its current valuation by combining both sports broadcasting and online sports betting into one convenient place. Although unlikely to overthrow any of the current forces, it can become the best live sports broadcaster that people can turn to when they cut cable but want to keep live sports. It has many hurdles to overcome (creating their sportsbook, better marketing, increasing subscriber count, etc.) before it is any real competition to its already established competition.
At a $3.19 billion market cap and very high (75%) short interest, it will be very difficult to realize consistent growth, but it is on par for a company with almost $100 million in revenue.
My Position
25 shares at $47.30
​
Edit: edited final thoughts/TL;DR
Please provide feedback! First time actually researching and compiling information for a company and not just reading about them on here. Also, please ask questions to clear up any confusion; it was kinda hard to put everything together neatly, so I might have accidentally left stuff out or oveunder explained some things.
submitted by JustOnTheHorizon_ to DueDiligenceArchive [link] [comments]

$DMYD & Genius Sports: Index for Sports Betting with Strong Tail Winds

$DMYD & Genius Sports: Index for Sports Betting with Strong Tail Winds

DMYD & Genius Sports: Index for Sports Betting with Strong Tail Winds

SPAC's nowadays run up to $15, $20, $25 on merger announcement. Shitty, obscure SPACs with poor fundamentals and obscure business models are all the rage the past few weeks.
Investor presentation linked before the DD: https://static1.squarespace.com/static/5e33152a051d2e7588f7571c/t/5f98173a9643aa67a4ced693/1603802943090/GSG+PIPE+Presentation+%2827-Oct-2020%29.PDF As everyone has noticed, SPACs have put investors on notice in 2020. With massive liquidity in the markets today, tons of money has been flowing into speculative SPAC investments this year.
Given that retail investors have no chance to profit from traditional IPOs that hit the market after a 100% run up (ABNB, DASH, AI, U, etc.) SPACs have presented an excellent opportunity to evaluate and invest in new companies before they actually hit the market. Personally, I have made fantastic returns through a number of SPACs.
That being said, not all SPACs are created equal. Some legitimate mature companies and high growth disrupters have emerged through SPACs: UTZ, DraftKings, ChargePoint, OpenDoor, Virgin Galactic, Eos Energy, and Butterfly are just a few examples.
However, many SPACs are performance chasing the EV hype by pursuing multi billion dollar acquisitions of EV start ups with 0 revenue for the forseeable future. I say good luck.
However, how often do you find a diamond in the rough? A SPAC with a definitive agreement, near NAV and outstanding fundamentals? Oh, and did i mention that they only have one competitor?
One SPAC with massive upside potential at a conservative valuation is DMYD-Genius Sports.
First, who is DMYD? dMY Technology Group https://www.dmytechnology.com/team is led by CEO Niccolo de Masi, the former CEO of Glu Mobile.
De Masi has consummated 25+ mergers and raised more than $1B in funding for various ventures. He seems to have a knack for the mobile/gaming sector, as his first SPAC: DMYT is taking Rush Street, an igaming company, public. De Masi is a veteran of this sector, which makes Genius Sports Group an interesting target.

Meet Genius Sports. ($DMYD)

(TL;DR at bottom)
​
Logo

Who is Genius Sports?

Genius Sports Group is one of two large sports data providers (the other being SportRadar) that collects and sells live data to sports books. This is incredibly important, as live betting needs constantly adjusted lines to reflect real time game updates. Genius Sports currently has contracts with the NCAA, PGA, NASCAR, FIBA, EPL, Bundesliga, and NBA, among other leagues, to be their sole or primary data provider.
These partnerships have staying power, as these leagues are unlikely to change partners once they are locked in for multiyear contracts. Additionally, acquiring rights to official league data is expensive, thus making a high barrier of entry for new competitors. They have 220 customers including DraftKings, FanDuel, William Hill, MGM, PointsBet, and Caesars. Important to note: Genius takes 5% of revenues of events they cover from ALL sports books. https://geniussports.com/home/partners/

Genius is above other SPACs due to its mature market position and strong financials.

The company has been growing at a 30% CAGR over the last several years, with revenue growing 250% from 2016 to 2020 ($42M to $145M). 60% of revenue is recurring due to multi year contracts, and the top 10 customers only account for 30% of revenue, thus lowering flight risk of any particular customer.
Genius is already EBITDA positive with 10% margins this year, and anticipates $68M in adjusted EBITDA (adjusted to ignore stock based compensation, a non-cash expense) with 29% margins in two years.

Why Genius Sports?

Genius has a clear economic moat built around:
Proprietary technology to track and record in-game statistics on behalf of major sports leagues, in exchange for data rights
7,000+ statisticians and agents on the ground, managing 240K+ events per year
Highly customizable software that manages every aspect of a sportsbook’s data and trading offering, including advertising and streaming services
Long-term contracts with sports leagues and customers
Significant opportunity for inorganic growth via M&A
Highly fragmented market for technology, content and media within sports ripe for consolidation to boost growth outside of plan.
​
Genius Sports

Genius Sports

Genius is above other SPACs due to its mature market position and strong financials. The company has been growing at a 30% CAGR over the last several years, with revenue growing 250% from 2016 to 2020 ($42M to $145M). 60% of revenue is recurring due to multi year contracts, and the top 10 customers only account for 30% of revenue, thus lowering flight risk of any particular customer.
Genius is already EBITDA positive with 10% margins this year, and anticipates $68M in adjusted EBITDA (adjusted to ignore stock based compensation, a non-cash expense) with 29% margins in two years. In a year where sports were disrupted by Covid, Genius still grew revenue from $116M to $145M. They also successfully resigned their contract with the NBA, ensuring a multi-year partnership with the premiere US basketball league.
Outside of the betting market, Genius’s ability to aggregate data has led to an interesting agreement with the NCAA. Until 2018, live data with college sports was incredibly inefficient. Genius signed a contract with the NCAA to create a new software: NCAA Live statistics https://geniussports.com/sports/sportsmanagement/ncaa-case-study/.
This is a uniform software for all divisions of college sports. As a former college athlete myself, I reached out to some of the athletic support staff from my University. They raved about how Genius has improved efficiency and accuracy for college athletics. NCAA Live statistics has overhauled the entire industry.
And as New York is in the works of legalizing sports betting, this will explode soon.
Genius Sports also has an impressive amount of customers and partnerships, and even more exclusive ones coming each week. Which ones below do you recognize?; with over 700 partners you're bound to know a few of them.
​
Some of Genius Sports major customers.
Basketball: NBA, NCAA, March Madness
Soccer: FIFA, Premier League, Serie A, Bundesliga
Golf: PGA, LPGA, European Tour
Racing: NASCAR
Online Sportsbooks: DraftKings & Fanduel
Traditional Sportsbooks: MGM, Caesars, SkyBet, William Hill
Likely Future Partner: Rush Street Gaming (DMYT)
  • Currently up 63% YTD, also went public with the same deal team (DMY)
​
More and more customers coming in each week.
they only lost 1 customer in last 3 years, and shortly after that customer RETURNED to Genius Sports. talk about real life FOMO, 'eh?

Financials & Trading Dynamics

Financials
  • Already makes $140M+ in revenue AND is profitable, with $14M in 2020 EBITDA
  • Growing at 30% CAGR, with $230M revenue and $68M EBITDA by 2022
  • $500M+ EBITDA potential in the horizon
  • Customer contracts have guaranteed minimums with upside on usage. The majority of 2020 revenue is locked in for 3-4 years on average
  • Only ever lost one customer in the past three years
Trading dynamics
  • Deal was overlooked because it was announced just before the election (10/27/20), one of the worst trading weeks for the entire market
  • Reddit following has been limited and Stocktwits nonexistent
  • If Genius Sports were to trade at similar 2022E revenue multiple of 19x as Draftkings, it would imply a stock price of $24-25
Additionally, with Pfizer’s vaccine approval, there is little to no risk of massive sports cancellations in the future. Genius still grew revenue during Covid’s massive disruption. I imagine that the revenue numbers for 2021 will be fantastic.
Now let’s focus on the stock movement and valuation.
Genius is valued as $1.4B, or 7.4x 2021 revenues. For a company with high CAGR and an industry with massive tailwinds, this seems like a fair, or cheap valuation. Note that Genius is trading at a steep discount to lower margin businesses such as sportsbooks Golden Nugget, DraftKings, and Penn.
https://twitter.com/ShortsHoward/status/1336686975554744320?s=20 Thanks to @ShortsHoward on Twitter.
While investors have been chasing the next hot EV IPO, Genius has slowly climbed from $10 to $13. Last summer, a rumored FEAC-SportRadar merger led to FEAC pumping to $15+. SportRadar was worth $2.8B in 2018, presenting 60% upside from Genius’ current price to reach its competitor’s 2018 valuation!
DMYD and Genius announced their merger in late October during a market downturn, thus letting it go overlooked. I think this is a sleeper SPAC that will have a massive influx of news in Q1, as its merger aligns with the climax of college basketball and the beginning of March Madness. A single Benzinga article pumped the stock by almost 20% last week.
​
https://preview.redd.it/h27vod4pet461.png?width=1048&format=png&auto=webp&s=4e7aad17d449e85642fd43b4919d025fbd42f4e9
Consistent growth
Last week, Genius Sports scored an exclusive partnership with the German Tennis Federation:
  • This is just one of the many partnerships Genius bring in. For example, a few days prior to this they scored a deal for Beach Soccer data. Over 700 partnerships and counting.
​
Exclusive partnership
​
Do you know who captures and provides the biggest sports betting event of the year - NCAA March Madness - data to sports betting sites?
  • It's Genius Sports and they'll be closing their merger with $DMYD right before that huge event. ESP March Madness for NCAA Basketball; One of the biggest gambling events of the year. The event occurs in Q1, which perfectly ties in with the merger with DMY Technology Group, Inc. II, $DMYD. Merger Q1 2021.
I also think the NCAA presents the biggest upside catalyst for Genius: March Madness. March Madness was cancelled due to the pandemic last year, but betters placed $4.8B in bets on the tournament in 2019. Who has a monopoly on NCAA data? Genius.
Who gets a 5% revenue share from ALL sports books for NCAA events? Genius. With the number of states with legalized betting doubling from 2018 to 2020, we could see upwards of $10B spent on March Madness this year. Along with March Madness, secular tailwinds for sports betting suggest high upside for Genius moving forward. 46 out of 50 states have either passed or presented legislation to legalize sports betting.
As states such as NY, CA, TX, and FL legalize betting, revenues streams will swell. Data will become increasingly important in this industry as live updates are constantly moving betting lines for books. With multi-year contracts with half of the US’s professional leagues, Genius serves as an index for the entire industry.
On top of that; just a few weeks ago Canada legalized sports betting; https://www.bloomberg.com/news/articles/2020-11-26/trudeau-government-moves-to-legalize-single-event-sports-betting
​
NCAA

Positions:

​
166K worth, 100% of portfolio.
Personally, I am long $166k in DMYD stock, and have no intention of selling anytime soon. Always do your own DD, but I hope this post helps. PT $18-20 EOM.
TLDR: Long DMYD as its a sleeping giant near NAV. There are currently no Arbs holding this down, so its primed to explode. Small float aswell. Only one competitor, Sportsradar. And SR is not even publically traded on any market.
Merger Q1 2021.
Market cap around $2B currently
"it's as undervalued as Tesla, both should go up at least 50% from here" - Warren Buffett.
submitted by zech_meme to SPACs [link] [comments]

Stock Market News for Today | NIO Stock News | DKNG, PENN & other Stock Market News [01-11]

Stocks finish at all time highs to close out the first trading week of 2021. What is my opinion on the NIO stock after their latest event? DraftKings & PENN soar after the latest New York developments, let’s talk about this and other stock market news
~Very Long Post~
Hello everyone and Good Morning! So, let’s start with the recap of Friday as we saw the Nasdaq Composite leading the way up over 1% and finished the week 2.4% up, the broad stock market SP500 also gaining more than half a percent on Friday and 1.8% for the week while the Dow Jones rose by 56 points and finished 1.6% higher in the first week of 2021, with all 3 big indexes finishing at new all-time highs. We also saw the VIX dropping below 22 again, despite a mid-day spike, as the volatility index dropped more than 23% since the high on Tuesday.
We saw an average DAY of trading to close out the week, with average volume and an almost equal number of companies that were advancing compared to the declining ones, as 7 of the 11 SECTORS finished in the green, with consumer Discretionary & Real Estate Leading the way, while the more value heavy industries lagged. For the week though, Energy outperformed, rising by more than 9%, Technology finished flat despite a very bad start to the week after the Georgia election and Real Estate lagged behind, losing 2.5% for the week, as we saw Large-Cap growth companies outperform on Friday, but in this fresh 2021, small & mid-caps have outperformed.
Here is the HEAT MAP from Friday, with big gainers coming mostly in the consumer cyclicals, with Tesla, Alibaba & MercadoLibre posting big gains, while the biggest losers were in the gold industry.
In THIS short year though, we can see the huge outperformance of the Energy Sector, the Banks and some other names like Tesla & TSM.
We also got some economic data, with the latest Redfin report showing a 13% increase in home sale PRICES over 2020, as ACTIVE listings of homes for sales keeps on dropping. The listings have seen a 32% decrease since last year to a new all-time low, though, the average sale to list PRICE ratio finally declined to 99.3%, as the housing market was red hot since June.
While December nonfarm payroll declined by 140K, worse than then 75k gains expected and is the first month since April that brings jobs losses with most of the JOBS losses coming from the leisure and hospitality business which has been hit hard again, losing almost half a million jobs, while the unemployment rate did inch lower to 6.7%.
So, this week pretty much starts of the EARNINGS season again, with the most interesting ones for me being, Aphria as a read on the cannabis sector, Delta Airlines for a read on how the Airlines are recovering and JP Morgan on Friday, while on the economic front we will see a lot of interesting DATA, mostly starting on Wednesday with the Consumer price index and the Federal Budget, while we continue these with the jobless claims on Thursday and more numbers about the economy on Friday.
This week we will also have some IPOs with the most interesting coming from Affirm Holdings, while I really expect to see what Biden SAYS on Thursday as this may be key to a further stimulus or fiscal package.
So, NIO DAY came and left me with rather somewhat of a disappointment, though I don’t expect most investors to really look at this, so they will probably jump on the stock again this week, so here is a quick recap of what they announced and what is my opinion on NIO:
They announced the first flagship sedan mode, the ET7 which will be AVAILABLE in 2 trim levels with 70 or 100KW battery starting from around $70K and $78K, but the good thing about NIO, and their main competitive advantage is the battery as a service. So, they will make this new sedan available for the same price with either battery pack if you do use the BAAS model at a price of $58K.
They also announced the next gen battery swap stations that can do over 300swaps/day, more than 3x the capability of the current one, as they also plan to build another 400 stations that would bring them to a total of almost 600 by the end of the year.
The “new battery technology” that they announced was the actual thing that disappointed me. So, they announced a 150KW battery with a claimed range of over 600miles, but that should be in perfect conditions, so expect the actual range to be somewhere in 400mile range, pretty much in line with Tesla’s current capabilities. The Launch DATE for the car is still only Q1 2022 while for the “New Solid-State battery” the timeline is for it to be available by the end of 2022. So, the bad thing is that everything is still at least 1 year away and we have to see if the claimed range for the new battery is real.
And there are a couple of big warning signs here with the new battery technology, they actually avoided saying they designed, created or engineered this new tech battery, by saying they will ADOPT this new technology. So, it seems they will adopt this new technology from their current battery supplier CATL. This is an issue as this battery will be available to other manufacturers like Hyundai, Mercedes BMW will get their hands on, so this will not actually be something innovative, ground-breaking or a proprietary solution.
Also, I don’t know how big this new Sedan thing is, because the Sedan market is really dying around the world. This new ET7 isn’t competition for TESLA 3, it’s targeted for competition against the model S, which is already a dying segment as you can see from Tesla’s SALES.
But on some more positive news, they did announce something better in my opinion, with their Self-Driving Feature, INCLUDING11 8megapixel cameras, as their collaboration with Nvidia will produce a super-computer that will generate up to 8Gigabyte/s of data, with the Nvidia CORE estimated to be 7x better than Tesla’s current computer. Though THIS doesn’t have an official release date and will probably come with the ET7 next year, so, another disappointment as this comp against Tesla will not be a huge advantage once Tesla does upgrade their computers as well.
So, for short the main competitive advantages that NIO has right now are that they use the subscription model for both the battery swap technology and for the full-self driving feature which costs around $100/month. This is are very good and smart recurring revenue streams, as they make the entry price for the car much lower and also provide a stable flow of revenues. But… I am disappointed in the “new battery technology” and have to wait for more developments. If this is a common technology that will be used by other car manufacturers, this is effectively not that big of a deal, but if somehow this is their own technology, that would possibly have better implications for the company. So, guys, I own both Tesla & NIO, and I think I might hold off right now on buying any more due to different factors. I think that Tesla has a good future, but this huge run-up has made it a good target for 10-20% correction at any point in the short-term future, while for NIO I expect this to rise in the next couple of days, and I am waiting for it to cool off a little before adding any more to my position. So, yeah, short-term I think both of them have some downside risk, but in the long run, I expect Tesla to trade at over $1000 and NIO to trade over $100.
In some other stock market NEWS, we saw gambling stocks like DraftKings and PENN rising on Friday after New York filed bills to legalize online betting in the state. DraftKings also just announced they will bring new stuff like drone racing betting, which is mind-blowing, that they are extending into such things. This is a continuing trend in the US and should be watched for future developments, as gambling will be legalized pretty much all over the US in the near future I believe, and I also expect this sector to be joined by the pot SECTOR, even if it’s really hard to believe there will be a nationwide bill to legalize it, I expect there will be some improvements for the sector, and companies like Aphria which are closer to profitability should benefit from this.
On some more sad new, we also saw a 27-year-old Boeing plane crash in Indonesia, this is very sad news, but as the stock market goes, this issue seems to be unrelated to Boeing right now. Indonesia has seen the most deaths in the past decades, with over 104 accidents, as this country is known for bad maintenance, pilot training and air-traffic controls problems.
And don’t forget, as I said in my earlier posts, don’t jump on these high-flying small cap stocks at all-time highs, this is a very good moment for this companies to raise cheap capital by issuing shares, with the latest example being BLNK.
So, let’s hope for a good day in the markets and the US FUTURES are pointing to a bad open right now, with all 3 big index futures down, as the DOW futures are down over 200 points
🙏Thank you everyone for reading!🙏 Hope you enjoyed the content! Be sure to leave a comment down below with your opinion on the stock market! Have a great day and see you next time❗
submitted by 0toHeroInvesting to stocks [link] [comments]

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Is Gambling Federally Legal, spela poker med kortspel, gambling biloxi, wide open gambling bill-August 18, 2019. Percentage. South Africa Start Playing on Sun Palace Casino read review. 100%. Read our full review Is Online Gambling Legal In Germany? Partly. In Germany, domestic online gambling is legal only for sports betting, lotteries, and horse racing betting, as outlined in the laws of the nation and its states. Domestic online casino gaming, however, is completely barred in Germany, excepting inside the state of Schleswig-Holstein (the allowance for which could soon expire). Whilst no German law But you don’t have to hold a law degree to see that the legal status of online gambling in the USA is questionable. Though we don’t believe that it is absolutely illegal in every case, we’ve shown you plenty of evidence that the federal government (not to mention state and local lawmakers) are concerned about it. Gaming regulations in America are changing. States like Maine, Delaware It's Legal Overseas . Antigua-based Bovada, one of the largest online sports betting sites, says that the only legal way for U.S. sports bettors is to bet offshore with online gambling sites. These sites are based in Antigua or Netherlands Antilles. "They take deposits by processing under international codes and have built up large and loyal The repeal of PASPA took care of freeing sports gambling as the last remaining federally prohibited form of state-regulated online gambling. As of now, all 50 states have the legal ability to legalize and offer online gambling such as casinos, poker, bingo, and sports wagering. To date, only a handful of states have taken advantage of legal domestic online gambling. However, many states have The US government has more stringently regulated online gambling. Some of the federal laws that encompass online gambling include the Federal Act Wire of 1961 and the UIGEA (Unlawful Internet Gambling Enforcement Act) of 2006. The former outlaws interstate wagering on sports but fails to address the other forms of gambling. The latter did not explicitly ban online gaming. However, it disallowed US-based payment processors from participating in any financial transactions involving online Until the State explicitly makes online gambling (in any form) legal, it is illegal. It is difficult to speculate whether or not the law is strictly enforced. RANK: Patently Illegal. Delaware. Regulated online gambling is legal in Delaware, and nothing in that bill would tend to make it appear illegal to play at unregulated sites. There are no federal laws that prohibit US residents from participating at online casinos, poker sites, bingo sites and legal online sportsbooks that are licensed, regulated and located outside of the United States. If you restrict your online gambling to these types of legally sanctioned gambling sites, then you will not be breaking the law. We do recommend however that you consider expert input regarding which sites are approved by professionals as providing a safe, high quality and PlayAmo Is Gambling Federally Legal offers a unique opportunity to play not only the most modern games but also appreciate the classics that made slots Is Gambling Federally Legal so popular in the first place. Use your bonus on some of the best live casino game providers such as Evolution Gaming. Watch and participate in games like online roulette, blackjack, and even Sic Bo ; Be the first to Illegal sports betting has real consequences, both for those placing and receiving wagers and for the safety of the American public.

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Gaming in South Carolina - YouTube

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is online gambling federally legal

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