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Daniel

22 Dec 20, 17 tweets, 5 min read

been looking in detail into $fubo & their financials & unless im a complete idiot being an investor in this stock at these levels is madness. Dont want to appear all knowing so please correct me if wrong (especially after My Tesla post) as dont want to Lways appear negative...

1) as far as I can see $fubo loses money on every subscriber & thats before any additional costs such as SG&A, r&d, broadcasting transmission are even added in. This company has a negative gross margin. Best comparison is their subscriber revs r like $roku hardware revs but worse

2) Ad revs make up 12% of $fubo’s revs so again in comparison to $roku which has 65% of revs as advertising with 60%+ margins and hardware revs at least contributing positive margins to gain users for their ad revs $fubo is completely backwards & again has negative gross margins

3) $fubo mrkt cap on every platform is listed @ 3.5B however that’s not accurate. The latest filing shows outstanding share count is not 65M as shown on brokerage sites but 132M + 4.6M warrants at 4.65/share!This company is over 2x as expensive as ppl think @ 8B+ mrkt cap already

4) $fubo balance sheet is a mess. Prior to facebank acquiring them in april the company had $18.5M in total assets with 8M cash & 195M in liabilities with a shareholder DEFICIT of 425M... in fact with their losses from operations if they didnt raise funds theyd have gone under

5) after $fubo was acquired their balance sheet swelled with 340M of intangible assets & a whopping $711M of goodwill. So where did this come from? Well facebank was a public company who did the technology behind celebrity holographic likeness (tupac at coachella)

6) the facebank acquisition was a reverse merger that valued facebank at 200M & $fubo at 700M valuation & as part of it has facebank issue 100M of debt as an enticer to get fubo to agree to a deal since they immediately needed funding & was used to bring $fubo public.

7) just one q later $fubo just wrote off 255M from intangible assets/goodwill from the acquisition already...imo facebank (makes digital humans) has little to no value as they had 5.8M revs in first 9 months of 2019 & was just used to get $fubo public along with that 100M loan..

8) upon facebanks acquisition of $fubo a big reason that was pumped about the value was Facebanks ownership of an entity named nexway AG which had an e-commerce subscription platform that was highly touted and 3 months later $fubo just sold it for a loss...

9) the meteoric rise in $fubo driven by what can i can only describe as retail mania to find the next niche small market cap company as the next $roku has provided $fubo with fantastic good fortune and i would not be surprised if they raised a lot of shares soon...

10) some ppl say $roku is expensive as they dont count hardware revs at all given their low margins in which case $roku platform revs at 1.2B this yr vs 45B mrkt cap is 37x this yrs sales & 25x next yr sales.

11) Well $fubo subtracting their negative gross margin subscription sales will likely have 20M in ad sales this yr which against 8B mrtk cap is 400x this yr sales and if they double that to 40M next yr 200x next years?!

12) the other huge difference between $roku and $fubo is that $roku has ZERO content costs, people provide them with free content to get on roku channel or rev share subscriptions & ad inventory for the large platforms which proves $roku has power over them as a gatekeeper

13) this is NOT the case for $fubo who has to purchase content... so what happens if at expiration those networks want more $? Its not clear to me (unlike $roku) that $fubo has any leverage & would have to drop content & potentially lose subs or lose more $ on future deals...

Can $fubo keep rising & make me look stupid? Absolutely as Im convinced the recent rally is all short covering (25% of float is held short). As a trade it could still work until the squeeze is over but if u want to know what ur holding, its not much & imo will end badly sometime

Why did i do all this? Many ppl i follow are super excited about $fubo & I was too as i started this to see if this was the next great small cap oppty that could 5x. I went into this WANTING TO INVEST not to trash it like some all knowing ego project but kept finding red flags

I will not be investing in $fubo and just hope that im wrong and ppl make $ and i look stupid, however i thought if i happen to be right & i can save someone a loss then id provide my thinking and let u decide what u want to do for urself. Worried bout those looking for 2-3x here

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More from @DPogrebinsky

Daniel

@DPogrebinsky

31 Dec 20

Want to be tra soarent since ive been so vocal on $trit that last night i reached out again given some discrepancies in financial statements related to account receivables being so high and their platform costs not being in r&d but in investing cash flows (higher ebitda shown)

While the comoany has not gotten back to me on the details of my additional questions they did say that they dont plan to have any formal quarter results for the q they just provided estimates for... they said their press release saying 17M rev plus 10M net income is all we get

Said their auditor kpmg is “budy” till january and would take thrm 30 days to do and by Feb it will be old news and they think spending 50k on that doesnt make sense. The next formal financial results they will provide will be for year end in feb and they said they have 120 days

Read 7 tweets

Daniel

@DPogrebinsky

30 Dec 20

Just spent an hour on the phone with $trit IR:
1) company has 56 employees of which 6 are engineers related to the platform who are managed by Ashish. The key is in addition they outsource to India additional 50-80 tech contractors at any given time who they used to launch Kratos

2) srinivas is a controlling investor in Rhodium but company has full time CEO and CFO and he doesnt control and is not privy to the day to day operations of the company. $trit started through him seeing a need for a better way to trade more effectively through Rhodium experience

They of course used Rhodium & its relationships with parties it does business with as the first customers of their platform which youd expect. In June 2019 related party rev was 100%, down to 26.5% by Feb 2020 & last q down to under 10% as they onboard more 3rd parties.

Read 12 tweets

Daniel

@DPogrebinsky

29 Dec 20

Some $trit thoughts:
1) def some red flags here however at this valuation vs the 65% rev growth rate and solid profitability i think its already more than reflected in the price of the stock here. Without these red flags i dont see why this stock wouldnt be 2-3x this price now

2) Lot of ppl looking at the connection between the founder of $trit and the company that has the financial issues ehich he also controls however did anyone listen to the update call? Company explained many customers in space affected by covid & asking for longer payment terms

3) Everyone understands & grants these terms (including lenders) except this one time for this customer the lender associated with the transaction didnt agree which is y rhodium has the issue. Company said the transaction in question was NOT even done through $trit’s platform!

Read 10 tweets

Daniel

@DPogrebinsky

28 Dec 20

$rkt IR responded. No comment on dividends or accelerated buyback which isnt surprising but did give a good response to my question on thr 21B in loans held on balance sheet. Doesnt seem like an issue to those concerned about it as 97% sold to govt and average days held is 18

From their 8k on 12/18. Funding facility has 29.3B as of 12/18 so plenty of funding

So basically shorts who think the 21B is debt or presents a risk to $rkt are dead wrong as company shows 97% of loans sold to govt (fannie/freddie) and only 2% to other parties last q. Average days held just 18 and company itself says this presents an “insignificant risk”

Read 5 tweets

Daniel

@DPogrebinsky

28 Dec 20

Been seeing lot of bullishness on $ozon. Not negative on it but not very high on it either. Honestly wouldnt surprise me to see it drop further & hit ipo price of $30/share at some point. Growth has def accelerated and expected to be 55% cagr next 5 yrs but seems too optimistic

Negatives: lot of competition & not even leader in its own space in Russia. What happened to owning the best & paying up for that? This clearly not it as seems more an example of this is what we’ve got available to invest in so lets work with it & frame narrative around the stock

Russia is a vast territory so delivery, logistics, & warehousing will never be as profitable and with the weather much more challenging. Also concerned about potential retaliation (tariffs, sanctions) when biden gets into office. Most of russia economy is oil and precious stones

Read 4 tweets

Daniel

@DPogrebinsky

27 Dec 20

$gogo why I’m long:
$gogo sold it’s CA biz for $400M in cash plus 17M/yr rev guarantee. Before sale company had 117M cash and 1.126B debt paying 120M a year in interest expense however the CA biz was where all the losses were. The remaining BA biz is actually profitable

Last q $gogo broke out that BA biz had operating income of 22M for the q, after subtracting 31M in interest expense they lost 9M. After sale of Ca biz they now have 460M in cash which they plan to pay down debt & refinance the 10% interest. They estimate this will save 50M/yr $

$gogo said they plan to refinance debt before May (which is why I bought May calls) & that its their top priority. $gogo has history of outperforming timelines, they said CA biz sale would happen before end of 1q and they finished it in Dec, expect refinance well before May

Read 11 tweets

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