[Logan]

Issuance of Preferential Warrants (PW)

– The issuance of PW has caused a lot of anxiety among the investor community, the company/management/CEO didn’t give any reasons for issuing the warrants. The size of the warrants is very big, when announced, it was more than the market cap of the company. We would like to know why such a massive dilution at this time when the company is getting the Line of Credit (LOC).

– Many in the market are saying that the prices were kept low so that warrants could be issued. What are your thoughts on this? Why not be more open about the warrants. Your silence on this isn’t helping anyone and in fact making it easier for people to speculate (Warrants were declared on Dec 4th and we still don’t know the purpose for issuing the warrants).

– Why not announce the plans for the PW? What is holding you back?

– For any random person this looks like the allottees are getting so much for so little.

– One entity belonging to one of the allottees of the PW, did day trading and the reason given was to check the liquidity of the shares but the allottee is supposed to be a stable investor for the long term and doing trades will be seen as an insider trading or as someone who isn’t long term oriented. This incident raises a lot of concerns for the shareholders.

– Are all promoters okay with the decision to dilute the company by this much? We ask this question because out of 186,627,685 held by promoters and promoters group, only 52,870,400 votes have been polled. The promoter holding after the conversion of shares become less 22%. When the shares are massively undervalued, usually any promoter/s won’t dilute their stake (that too by this much). Why give away this much for so little?

– In the past, the CEO, who is also one of the promoters of the company, said that the company didn’t want to dilute the shares but now the company is doing the opposite. Why this sudden change?

– Why didn’t the company issue warrants or rights etc few years back? Doing that would’ve helped in sorting out almost all the issues. India debt could’ve been paid off years back and DAUM issue would be settled by now. As mentioned above, doing the dilution now raises lots of questions/suspicions. We need a definitive answer for all these.

Investors’ Exits

– Many investors who held significant quantity have completely sold their shares and this raises many questions/suspicions/doubts. We know this involves other parties but giving clarity on this will be appreciated by all the shareholders. There’s so much talk going on about this in the market and giving clarity will clear all the confusions that shareholders/potential investors have.

– We didn’t get a definitive answer on why OAK (which held over 7%) decided not to honor the agreement they had with the company i.e. to sell their stake to the parties appointed by the company.

– The Goenka Group, which held significant quantity in the company, have sold all their shares in just one quarter. What’s the reason for this? Their selling raises many suspicions like – they held their shares till the PW got approved and exited soon afterwards.

[Logan]

These are my queries as of now.

Business

– December quarter is usually the best quarter for BCG but this time there’s no growth in revenues or profits when we compare results Y-O-Y. Many adtech companies, including bigger companies like Google and Facebook have had greater growth rates in the December quarter. What should BCG do to have higher growth rates in revenues (and profits).

– We would appreciate if the company provides revenue break-up of SSP, DSP, DMP and CTV businesses.

– What is the impact of Magnite Inc buying SpotX on BCG’s business. With all the consolidation happening in the industry, how can we continue to grow, stay competitive/innovative?

– What is the impact of Apple’s upcoming privacy changes on the adtech industry? (Facebook says the policy changes have great impact on its business). How will it affect BCG?

– What’s the impact of all the browsers blocking/reducing third-party cookies?

– Privacy concerns related to Online Advertising is a hot topic these days. How does it impact BCG’s business going forward?

– Are you planning to expand BCG’s business in Europe? Is that the reason for opening an office in Berlin. When will you start Online Advertising operations in India and when will you expand your operations in Asia Pacific regions?

– How is BCG’s business different from The Trade Desk’s or Magnite Inc’s or Pubmatic’s?

– Magnite and Pubmatic have less revenues than BCG’s but are still valued many times more. Why is BCG going unnoticed? What steps have you taken for Value Realization?

– Is the company looking at any acquisition?

– What’s the progress on consolidation of the subsidiaries that you had planned? Why is it put on hold?

[Logan]

@explorer and @m4max1979, did you get any response to your mails asking for the details or did you send the details directly?

[Logan]

@odysee, if we ask that then he’ll say come to the office and check those reports yourself. I don’t think the company will share the reports publicly.

I think @rathi_b and team have checked OMS’ books audited by E&Y.

[Logan]

@buffet, also we should ask them to conduct the call for at least 75 minutes. CEO and the CFO can talk about business and numbers for 15 minutes and investors can ask their queries for 60 minutes. If we ask for 2 hours then they’ll not say yes.

If it’s for only 30 minutes then some people will waste everyone’s time. They ask only about dividends, buyback etc.

So, we should all send them mails asking them to extend the call by 30 minutes at least.

[Logan]

I think he likes valentine’s day very much that’s why all these announcements now.

So people, from now on, if we want anything from him, we should ask during valentine’s period. Other days if we ask him about something, he won’t be this open/interested.

If you all remeber, many times we requested for the conference call to be held for 2 hours but he said yes only for last year’s Q3 call which was during the valentine’s period.

(Just a joke, not to be taken seriously)

[Logan]

@VALUEBUYER001, I figured it out. You have to select that see all option. After going to that page, you can download these files.

The strange thing is that, on the main page, you can’t download the files but the same files can be downloaded if you go to the page that contains all the recent announcements.

[Logan]

@hw_tw, I have the file which I downloaded from BCG’s website and as you’ve mentioned, in that the details are correct.

I haven’t seen the copy that’s shared in BSE. Don’t know why but these days I’m not able to download files from BSE website using my phone.

[Logan]

The article’s headline is not correct. It says the profits went up 35% yoy which isn’t the case. I don’t think IIFL saw the results properly before sharing that. The profits are up qoq and not yoy, in fact there’s a decrease in profits yoy (3% or something).

Telangana Today and equitybulls have also written about the results but they haven’t made any mistake.

[Logan]

@m4max1979, even I haven’t received my dividends. I wrote to them several times but still no response from them.

[Logan]

Is there any understanding between BCG and Axis?

Surely Axis will look at all the announcements by BCG right? They must’ve seen yesterday’s announcement. To block the PO money, they used one of the announcements for their arguments.

People who attended the hearing – can you please share with us what was discussed in the court today.

[Logan]

There’s a difference between the August update and the recent update.

In the August update they mentioned that the company has sent a proposal on payment plan to close the loan. There was no mention about any settlement but in the recent update they have mentioned that the company has settled with Axis. They may even have paid off the agreed amount but they are waiting for Axis to send a formal acknowledgement regarding the closure of loans.

Since the matter is in courts, I don’t think they can reveal further.

If there was trust in the company/CEO/management then the market would’ve reacted positively. The CEO has said many things in the past but has not executed most of the things so the market will wait till material developments to happen.

[Logan]

@drjaysee, I don’t think it’s anything to do with the PW approval that he is conducting the conference call on 20th. Always they schedule the conference calls on Saturdays. This time since the results were published late in the night on Friday, and also since there’s an hearing in NCLT tomorrow, they must’ve scheduled the call on 20th, Saturday.

I don’t know whether the promoters will get back all the pledged shares, in one of the calls when somebody asked about it, he said some shares were pledged for personal loans. My guess is that they’ll get back majority of the shares.

(On a lighter note – he loves shareholders so much that’s why he waited till valentine’s day to announce the news)

[Logan]

I’m not able to share the PDF file here as I’m using my phone. The order was passed on 9-7-20, wherein NCLT ordered BCG not to use the PO funds.

There are so many things mentioned in that but I’ll just share the orders passed by the judges.

1) The Corporate Debtor is hereby restrained from utilising the proceedings of the issuance of equity shares till the date of passing an order on the admission of the petition filed under Section 7 of the Insolvency & Bankruptcy Code, 2016.

2) The Corporate Debtor is further restrained from alienating any of its assets to the date of passing an order on the admission of the petition filed under Section 7 of the Insolvency & Bankruptcy Code, 2016.

(If anyone has that file they can share it with us here)

[Logan]

No conference call this time? No updates from the company till now. They used to put out a media release after each and every quarterly results but this time till now they haven’t shared anything.

[Logan]

Disappointing results, we were hoping the revenues would be more because of the US elections but that has not happened. We can understand if profits didn’t go up (because there’ll be more expenses) but at least the revenues should have gone up.

Looks like LOC is very important to get the desired growth levels.

[Logan]

I still haven’t received dividends. I wrote to them several times but still no response from them.

[Logan]

@Diana, only the CEO could answer about the debt payment. I just shared my opinions based on what information I had but other than the CEO, no one else could answer these. Even if we ask him about that he’ll say the same thing which he has said all these years. With his decision making who suffered the most were/are shareholders.

Regarding DAUM, personally I don’t give much importance to it. I want BCG to buy a company like SpotX instead of getting back Lycos. I don’t think Lycos will add much to BCG’s business. But getting back Lycos plays an important role to change the market perception. Getting it back may (can’t say for sure) lead to BCG trading at a fair valuation. As you have also written in the past, Markets hate court cases and having an open case (don’t know legally whether it is still open or not) brings bad perception.

Except Mr.Acharya, I don’t think other board members will bring anything to the company. Only option we have is we have to get together, appoint a person who looks after retail investors’ interests.

This business is very good and we should not let the CEO take bad decisions again. Magnite, Pubmatic and Affle with lesser revenues and profits are trading at astronomical valuations. If things are done right then BCG’s stock may have a turnaround story like TANLA. The best part of being in a growing industry is that with good decision making (and enough liquidity) even older companies can compete with the newer ones and get better valuations. Magnite is one of the examples.

[Logan]

@harshay. My point is if there was no market sentiment, Tesla wouldn’t have become the #1 car company in the world so soon. If people valued looking at only financials then Tesla wouldn’t have become number1 company. Market sentiment plays a big part in that. Tesla’s market share is maybe less than 2% but it is the most valuable car company in the world.

Whatever you wrote is correct and those factors go into that market sentiment. Factors like growth, market share, confidence in the business, future prospects of the business etc will all be considered in that sentiment.

One more thing I’d like to add. There’s a difference between rightly valued considering future prospects and crazily overvalued. In Tesla’s case it’s crazily overvalued right now. Combined market cap of most car companies is less than Tesla’s but their market share is very huge. These companies are also investing heavily in EV segment and they are gaining more market share in that field too. I’m not saying Tesla is a bad company or anything like that but my point is people go crazy while valuing some companies.

(I’m a big fan of Elon Musk and Tesla by the way)

[Logan]

I think after this acquisition of SpotX, Magnite will become a very dominant player in the adtech industry especially on the seller side of things. The merger of Rubicon (seller side) and Telaria (CTV) to form Magnite made it the largest Sell Side platform and adding SpotX will make it very dominant. SpotX provides technology for “video ads” across all the mediums – desktop, mobile and connected devices.

SpotX can help both Telaria and Rubicon. With Telaria, it can add CTV revenues and with Rubicon it can add revenues from video advertising across mobile and desktop.

Many smaller players have merged or got acquired and some went out of business. Google, Facebook and other bigger companies are still growing. Don’t know how all these will impact BCG.

[Author]

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