Forum Replies Created
-
AuthorPosts
-
LoganRegistered BoarderLoganRegistered Boarder
Alphabet stock surges as resurgent Google ad sales deliver big earnings beat
“Regarding revenue, in the third quarter, we benefited from a broad-based improvement in advertisers spend across all geographies and nearly all verticals,” Chief Financial Officer Ruth Porat said on a conference call.
Online ad sales seem to have bounced back in the third quarter from early COVID-19-related weakness, as Pinterest Inc. PINS and Snap Inc. SNAP already disclosed big bumps in ad sales, juiced by greater customer engagement.
Shares in Google’s parent soar 6% on ad sales rebound
About 90% of Google’s revenue stems from advertising, much of it linked to search results. That business ground to a halt in the second quarter, as the pandemic decimated its biggest clients, travel and tourism companies. But as lockdowns wore on and people adjusted to spending more time at home, e-commerce has boomed and people have spent more time watching YouTube, helping the search giant business get going again. The U.S. economy also bounced back, notching record growth in the third quarter.
LoganRegistered Boarder@VALUEBUYER001, please take care of your health, you should always give preference to your health first.
See these price fluctuations will be there in stock market, it should not have an impact on your health. I know it’s easy said than done but please try not to concentrate too much on price changes.
Regarding LOC, I don’t want to give false hopes but I think the rules will be different in each and every country. BCG may not get loans in India but it may get them in the US. If the US banks won’t give loans they’ll directly tell BCG about that. Even BCG’s management knows about it and they wouldn’t have applied for loans if they knew they won’t get it.
The lenders ask each and every detail about the company, they look at complete history of BCG, then only they’ll give loans. They’ll know about the 150crs write off that BCG did and they’ll understand the situation.
LoganRegistered Boarder@VALUEBUYER001, we all know the history of BCG. That write off BCG did was because of LGS global and it was not BCG which defaulted on those loans. Even the banks know that so only they agreed to the ots. If banks found something wrong then they wouldn’t have agreed right?
Coming to 400cr profits, you have to understand that not all of that amount is liquid. Some amount is stuck in receivables, some amount is used to run the daily operations and also for improving the technology (very competitive industry). Whatever is left you use it to pay off the loans or pay dividends etc.
If all the profits were used to pay off loans, you’ll have to stop upgrading everything and also BCG doesn’t have large reserves either so you have to sell your assets to pay off the loans which leads to less revenues, profits etc and later you end up going out of business.
BCG wrote off close to 150 crores and they have paid close to 250 crores to banks (with interest).
LoganRegistered Boarder@odysee, it depends on how you see things.
It’s like Is the glass half empty or half full?
I see it as half full because I know, in the past, it was almost empty. I want to see further progress (I want the glass to be full) and the progress should be quick and not like how it was in the past.
The company has made good (but slow) progress on closing off bank loans of SBI and Canara and if Axis hadn’t gone to court then that loan would be closed by now.
I don’t know anything about the LOC process so I won’t comment about it but the CEO should share more details about it.
LoganRegistered Boarder@JRS, while analysing BCG you should always consider consolidated figures because all of BCG’s strengths are in BCG’s subsidiaries who do online/digital advertising business. BCG’s Israeli sub OMS is the best among the subs. It’s because of the Israeli team, BCG’S growth was high.
The parent company is more like an holding company. Once programmatic advertising picks up in India like in the western markets, BCG may start scaling up the operations in India. Once the issues are resolved, they may have other plans like the project with Mr.Pisipathi, AI & ML etc but their main focus has always been on online/digital advertising.
The problem is all the financial websites report standalone figures and they compare BCG with random companies which causes more confusions so it’s always best to read the annual report to understand things better.
There are many items in the annual report which are mentioned as other assets, loans and advances etc so to get a clear picture please read the asset impairment presentation that BCG shared.
If you have any doubt please let us know.
LoganRegistered Boarder@Antu, I think bankers can explain about the process better as they’ll have good knowledge on the topic.
Also the link which you have shared, in that they’ve discussed mostly about personal line of credit and I think the process is much more complex for businesses.
4+LoganRegistered Boarder@rahul, I don’t think that’s a good idea when you have other options. LOC which is taken against the receivables is a better option because you are taking your own money in this case.
With selling a part of a subsidiary you may have to listen to other investors and you can’t take decisions independently. In the future if you want to consolidate all the subs then you’ve to buyout the investors’ shares and that time you have to arrange funds. Those investors obviously will ask a premium price for their shares.
It doesn’t make sense to sell a part of a profit making company to get back Lycos or to pay off India debt. Though both are important from the market/valuation perspective, business wise it doesn’t make sense.
It’s the classic case of “kill the goose that lays the golden eggs“.
LoganRegistered BoarderI request everyone to send mails to the company asking them to keep this year’s (FY20) annual report as informative as possible (especially the balance sheet).
There are many items where proper details aren’t available and the company simply has mentioned those items as other assets, loans and advances etc. (They’ve followed the accounting standards but we need more information)
We investors know and understand what those items are but any random person (new investor or potential investor or even analysts) will have many confusions when they read the balance sheet.
They gave us good presentation after the asset impairment and we want them to do the same in annual report.
If anyone who wants to follow the company he/she will always read annual reports and they never will look at presentations that the company has shared with investors so it’s very important to provide proper details in the annual report.
We should put more pressure on the company to do it as I’ve seen many people complain about it on various platforms. Since many people don’t understand these things properly they’ll simply start saying nonsense things about the company.
LoganRegistered Boarder@odysee, the main reason for our frustrations is that there’s so much manipulation in share prices. It has been happening since many years and Oak selling made matters even worse.
Business wise, the company took few bad decisions which resulted in this current situation. They should’ve been more careful when they bought Lycos from Daum (they should’ve put some clauses in the agreement), then they shouldn’t have let LGS management lose focus on the business which resulted in the receivable write off. These 2 things are the main causes for the crash in stock price (what was already bad, PE selling made matters even worse).
Lycos Life was a failure where BCG burnt cash but if it had clicked then we’d have seen even higher growth rates and better cash flows (now almost everyone has a smart watch, BCG was early in that). I don’t think they spent much on Apollo Lycos and they never took it seriously.
The best thing is they didn’t lose focus on digital/online advertising, and in fact the best investment was made on programmatic advertising platform “Brightcom”. The online advertising industry was going programmatic and BCG’S management team took a great decision to start Brightcom. The future of advertising is programmatic and starting Brightcom opened up many opportunities for BCG.
LoganRegistered BoarderThe pandemic has accelerated the development of all sorts of business trends and technology. Two of them are digital advertising and connected TV (CTV).
Growth now, profit later
Neither Magnite nor Roku currently operate with the intent of maximizing profitability. Rather, both operate at a loss in order to capitalize on the growing CTV and digital ad market. Over the last 12 months, Magnite reported negative free cash flow of $16.7 million, and Roku reported negative free cash flow of $45.8 million.
2+LoganRegistered Boarder@Antu, no problem, we all have doubts and confusions on many topics. We can have meaningful discussions in this forum which will benefit everyone.
Not only you but everyone is nervous about the second corona wave so it’s natural to share your views and opinions on that topic.
I don’t know much about the LOC process so I won’t talk about it. Only the CEO could clear your doubts.
See the above post #8924, most of the major networks are converting their traditional business to streaming which will benefit adtech companies. Magnite Inc signed a new deal with Walt Disney. Disney+ subscribers have increased in just 3 months (33.5M to 57.5M).
We can see the same in IPL also, more people are streaming it instead of watching it on TV.
So for BCG, business wise, there are more opportunities (not just for present but for future too) but we don’t know when all the positives will reflect on the price. Even after posting good results BCG’s stock fell so it’s mostly to do with not resolving the outstanding issues yet.
LoganRegistered BoarderInvestors Should Love Walt Disney’s Latest Move
Walt Disney (NYSE:DIS) made a surprising move this week that sent its stock surging higher. The media giant announced a reorganization of its business that will accelerate its transition from traditional television to streaming.
Disney has good reason to accelerate its efforts to grow its streaming business. In the company’s third quarter of fiscal 2020, Disney+ subscribers hit 57.5 million, up from 33.5 million just three months earlier. Further, Disney’s Hulu subscribers increased from 32.1 million to 35.5 million over this same period.
Why Magnite Stock Surged Higher on Tuesday
The gain follows news that Walt Disney (NYSE:DIS), a major Magnite customer, is accelerating its efforts in streaming by creating a distinct unit focused on the distribution and monetization of its streaming content.
Magnite, which has an exclusive contract with Disney’s Hulu to serve all of the major streaming platform’s connected-TV ad inventory programmatically, could benefit from Disney’s invigorated effort to distribute and monetize streaming content.
LoganRegistered Boarder@VALUEBUYER001 and @odysee, if you want more articles like that then I can share them here. There are many articles on TTD, Criteo and other adtech companies where they talk about the importance of programmatic advertising and other ad related stuff. They all are very interesting to read.
LoganRegistered BoarderHow an advertising minnow outgrew the big beasts
Even after years of trying, he (TTD CEO) admitted it is still hard to explain the business model to people unfamiliar with the industry. “My mother still has no idea what I do,” he said.
The CEO of The Trade Desk himself has said even after years of trying, still many people don’t understand the business model properly. (I’ve been saying the same thing from the day I started writing here. The adtech industry is very complex and when BCG came to the market, not everyone understood it properly and only a few people did. The management didn’t take the effort to inform the markets properly).
The adtech groups that were meant to revolutionise the industry with automated, real-time and highly targeted ad buying have mostly come and gone, chewed up by a fast-changing sector and ferocious competition from Silicon Valley.
Even those that have survived — such as AT&T’s Xandr and Criteo — have been affected by tougher privacy rules and new restrictions on the data flows that are the sector’s lifeblood.
Many companies have failed to survive in adtech industry and even the big players have struggled. When I said this, some people mocked me but the reputed “Financial Times” has said the same thing.
Coming to BCG, business wise they know what they are doing and we will always support them but the problem has always been market/stock related and the management didn’t give importance to investors. They need to improve a lot on that.
Now, thankfully, everyone understands the importance of adtech sector and they are understanding the business model properly and if BCG improves on transparency then people will value the company properly.
LoganRegistered BoarderFacebook Users Interacting With Misinformation Way More Now Than In 2016, Study Finds
During COVID-19 times and election year, it’s very important to read genuine information.
BCG signing reputed publishers for their B-Local initiative is a very good move. People trust news that’s published in local newspapers/publishers more than they trust news shared in social media platforms.
Business wise we don’t have many complains but we always have issues with BCG’s corporate governance. If they improve that and if they are more transparent then price will catch up with intrinsic value sooner than later.
LoganRegistered Boarder@buffet, that amount is not hard cash (reserves and surplus), BCG doesn’t keep any reserves, they always put it to work. After balancing assets and liabilities you get a figure that some people say other equity and some say reserves and surplus.
You have to understand where the assets are used for. In BCG’s case, they buy media space from publishers (bought for advertisers), spend on product development (Compass platform and other products), pay advances to collocation centres, develop a number of databases etc.
Please read the Asset Impairment presentation to understand more.
Growing companies won’t keep assets in reserves, they always put it to work. The loans and advances that BCG gives are for buying media space and other things that I’ve mentioned above.
BCG doesn’t report it properly in the annual report and that’s causing many people confusions, when they see loans and advances and other assets, people think those assets are cash, bonds etc but that’s not the case. They should report it properly in the annual report to clear confusions and that’s what we (suggestions that we sent) asked them to do. Hopefully in this year’s annual report they’ll report everything properly.
You have to take out cash from the operations to pay off those loans and to pay Daum. You have to be ready to take a hit on the revenues and profits to do that. All these years BCG paid off loans from free cash flows. If they had better free cash flows or large reserves then they wouldn’t have waited all these years to resolve the outstanding issues. The main reason they are going for the LOC is because they want to improve free cash flows which helps in growth, pay dividends or for buyback of shares etc.
LoganRegistered Boarder@Antu, I’m not questioning your writing here or I did not misunderstand you, it was you who wrote that the meeting was a waste and I gave my opinion on that. You have also mentioned about price.
There’s no denying that the management has to improve on transparency and in fact we all have been putting pressure on them to improve that. If you see the topics we are discussing, most of them are concentrated on improving corporate governance. Most of the queries that we sent to the company during conference calls were on that subject. We are doing what we can do on that and if the company doesn’t improve then it’s not our responsibility.
5+LoganRegistered Boarder@Antu, the people who went to meet the CEO did it to get clarity on many issues. The meeting was not a waste at all in any sense, because of them we all got clarity on Axis, LOC, Daum and many other topics. You should be thanking them and you really should appreciate their efforts. They went to meet with the CEO during pandemic times, tell me, how many people are ready to do it?
You can’t relate stock price movements with the meeting. The meeting was done to get clarity on issues and not to jack up the prices.
LoganRegistered BoarderMy guess is that the audit was done mostly to get the LOC. Back in 2016-17, BCG’s subsidiaries were audited by EY at White Oak’s request/order. Since BCG has many subs, the lenders will always ask for a complete/thorough audit which usually takes time.
I don’t think they’d reveal the report to public because it contains all the sensitive information about the company. They shared many presentations with us during the lockdown which was good.
I agree with @odysee on lack of details given by the CEO on consolidation of subs. My guess is that they are not sure whether the parent company gets the LOC or the consolidated sub gets it. If they consolidate all the subs and if the parent gets the LOC then they have to make other arrangements (mostly tax related).
The business is good but the CEO doesn’t know how to communicate with the markets. If they improve corporate governance and stop giving wrong timelines then people will trust the company more. Appointment of Mr.Acharya is a good move.
-
AuthorPosts