Out Fox The $treet

  AppLovin's stock has dropped significantly from its peak due to fears and short attacks. The company excels in AI advertising for mobile games, with ad revenues surging 73% in Q4 2024, and is expanding into e-commerce and connected TV ad markets. AppLovin's efficiency is notable, with a 62% adjusted EBITDA margin and $2.1 billion in free cash flow, before divesting the Apps business. Despite short-seller concerns, the stock remains a promising AI ad tech company, trading at sub 20x EPS targets on a gap close to $175. AppLovin Corporation  ( NASDAQ: APP ) is a prime example of how good stocks with explosive gains shouldn't be chased. The stock soared after reporting great results for 2024 and guiding up Q1  '25  results, sending AppLovin to a record high, but the stock is now down over $300 from the peak due to fears, short attacks and economic fears. My investment thesis is ultra-Bullish on the stock due to the e-commerce advertising opportunity, especially on a di...

Verizon is slowly building up a mobile-ad service. The go90 mobile service offers a glimpse of the future though providing limited impact to current financials. The wireless provider continues to pivot toward the future while providing investors a 5% yield to enjoy in the mean time. Though the AOL deal didn't originally appear to offer much value to a wireless behemoth like Verizon Communications (NYSE: VZ ), considering its lack of growth and small size, some opportunties emerged that made the service all additive. In a similar manner, the purchase of Millennial Media (NYSE: MM ) for a meager $248 million doesn't appear to offer anything meaningful to a company worth over $180 billion. Read the full article on Seeking Alpha. Disclosure: No position mentioned. Please review the disclaimer page for more details. 

Last week, both Rocket Fuel ( NASDAQ: FUEL     ) and Millennial Media ( NYSE: MM     ) confirmed that the fourth quarter was a strong period for programmatic digital ads. While Millennial Media suggested the automotive sector might have pulled some revenue forward to the fourth quarter from the start of 2014, the general indication is that digital ads will increasingly move to programmatic platforms due to growing complexity. Read the full article here. Disclosure: Long FUEL and MM. Please review the disclaimer page for more details. 

After the announcement of the acquisition of Jumptap back in early August, Millennial Media ( NYSE: MM     ) plunged. The independent leader in mobile advertising was unable to satisfy analysts concerned about organic growth, but should that matter to an investor? The primary reason for the purchase of Jumptap is that the company supposedly spent the last few years building a mobile platform the exact opposite of Millennial Media. In fact, Jumptap focused on a programmatic buying network that recently fueled the strong IPO of Rocket Fuel ( NASDAQ: FUEL     ) . With programmatic buying seeing such strong growth, should investors care whether the growth was bought or built? Read the full article here . Disclosure: Long MM and FUEL. Please review the disclaimer page for more details. 

After an ad tech IPO opened up over 100%, will the other recent ad tech IPOs now rocket higher? Last week, the developer of an automated decision-making platform focused on digital advertising named Rocket Fuel ( NASDAQ: FUEL     ) had a fantastic day, suggesting that other ad tech stocks could finally perk up. Prior to this IPO surge, the whole sector had been seen as a major failure with disappointing offerings over and over. Rocket Fuel was probably the catalyst for recent surges in sector stocks of Tremor Video ( NYSE: TRMR     ) and Marin Software ( NYSE: MRIN     ) . Both stocks have traded horribly since recent IPOs, but the huge rally by Rocket Fuel might signal a major shift in sentiment in the sector. Read the full article here . Disclosure: Long FUEL and MRIN. Please read the disclaimer page for more details. 

Another quarterly report and another major sell-off of Millennial Media ( MM ) . Investors not reading the report would probably suspect that the leading independent mobile advertising company released earnings that didn't meet estimates. The nearly 19% loss on top of an 8% loss on the day earnings were released undoubtedly must have been due to extremely negative numbers. The sell-off was actually caused by a couple of factors, including the surprise merger of the second leading independent mobile ad network and revenue numbers that missed estimates. Considering the general weakness in the sector, it actually doesn't take much to send ad technology stocks down these days. Read the full article at Seeking Alpha. Disclosure: Long MM. Please read the disclaimer page for more details. 

Small Cap Insight Any time a stock falls 50% shortly after an IPO one has to wonder if the market isn't offering a bargain now. Currently the IPO process is so subjective to market forces and short-term market momentum that a stock can move 50% in either direction irrationally. Typically the process of deriving the offering price is built for obtaining a reasonable price though it usually leaves money on the table for those buying at that price. In the case of Marin Software ( MRIN ) , investors at the IPO price haven't seen much to smile about as the stock peaked at nearly $20 on the opening day and has done nothing but drop to $10 in the three months that it has been public. Read the full article at Seeking Alpha. Disclosure: Long MM. Please review the disclaimer page for more details. 

Small-Cap Insight With the mobile advertising market booming, the continued collapse of Velti ( VELT ) has remained perplexing. The company famously faced a cash crunch due to extremely long payment terms to only collapse after seeing the EBITDA and income plunge after cutting that business. The question still remains why cut a profitable business because of slow payments. The company is a global provider of mobile marketing and advertising technology and solutions that helps brands, advertising agencies, mobile operators and media to implement mobile campaigns. While the decision to cut the slow paying customers that would not agree to faster payment terms appeared correct, it hasn't helped the company or the stock yet. The irony continues to be that those customers also accounted for a decent part of EBITDA and earnings pushing the stock down further from above $10 in September to spending most of the last few months below $2. Clearly the market misunderstoo...

Great discussion on mobile advertising. Long video but worth watching if your interested in the mobile ad sector such as Google (GOOG) and  Millennial Media (MM) . For those paying attention, Millennial Media trades near all time lows yet there the ones involved in a discussion with Google. Disclosure: Long MM. Please review the disclaimer page for more details. 

After the market close on Tuesday, Yahoo! ( YHOO ) reported Q1 2013 results that provided limited progress at growing the business. The company has been busy updating main products such as the home page and mail yet it hasn't led to expanded revenue, adjusted EBITDA, or operating income. The consumer internet company continues to struggle in attracting the current generation of internet users focused on social media and attached to Google ( GOOG ) search. Yahoo! though has been able to dramatically increase the earnings per share based partially on the share buyback program and the exclusion of stock based compensation (SBC). Oddly the SBC number wasn't excluded in prior periods unlike other technology stocks. The company shared that engagements had increased on updated products, but clearly those numbers aren't flowing to the top or bottom lines. Read the full article at Seeking Alpha. Disclosure: No position mentioned. Please review the disclaim...

Back in August of last year, Stone Fox Capital wrote about the continuous decline of Zipcar's stock. The stock had traded down to $6 in a steady and unrelenting decline since going public around $30 back in 2011. The stock had become so punished that it wasn't long before Avis Budget Group ( CAR ) came knocking with a $12.25 per share offer in cash that gave bottom feeder investors huge gains. The latest action in Millennial Media ( MM ) is starting to replicate the action of Zipcar. First and foremost, Millennial Media traded at the highs out of the gate and followed the path of Zipcar with non-stop declines. It's debatable which stock had the worst chart. Second, the investment concepts remained intact despite the precipitous declines. Investors feared higher competition and delayed profits in pushing the stocks to incredible lows, yet the thesis of car sharing and mobile advertising both remain strong. Read the full article at Seeking Alpha. Disclos...

Typically when the RSI hits a figure below 30 the stock is oversold. When that number creeps below 27, the stock is reaching the significantly oversold position. Not many stock go lower than 24 other than complete destruction of the stock. Millennial Media (MM) is trading around 26 on the RSI as the stock plunges further to nearly $7 today from $8 on Friday. Remember the stock was trading over $14 prior to earnings. Incredible to see this much destruction with revenue growing 55% this year. Traders clearly do not believe the updated guidance. The fear is that Google (GOOG) is and will eat their lunch. The stock action is amazing because logically Yahoo (YHOO) should want the independent mobile ad network to compete against Google and Apple (AAPL) . Just don't see Google dominating the mobile display sector without a player like Millennial competing with it. The chart though tells a different story. See below: Investors will be wise to buy this stock as it settles out....

The independent mobile advertising sector just can't shoot straight or at least thats the opinion of the stock market. Largest independent mobile ad network provider Millennial Media (MM) broke down to new all time lows today. The stock now fetches a market cap of below $600M while supporting huge growth. The company did disappoint in Q412 (see Millennial Media: When 68% Growth Isn't Enough ), but one has to wonder if the punishment fits the crime. The CEO doesn't do the greatest job of explaining the situation on the Mad Money show back after the earnings report, but investors selling this stock off to new lows should take time to review it. Clearly the company needs to do a better job of containing expectations so that 68% growth isn't seen as a negative. The stock now trades at less than 1.5x forward revenue estimates. All other stocks with these growth rates trade in the 10x multiples. The CEO was clear that Google (GOOG) isn't stealing sha...

After the close on Tuesday, Millennial Media ( MM ) reported Q4 2012 earnings that greatly disappointed the market due to substantially lower revenue than expected. While the company reported earnings in line with expectations based on solid margins, it failed to predict the shortfall in several large brand deals sending the stock down over 25% in after-hours. The company is the leading independent mobile ad network provider. Its technology, tools, and services help developers maximize their advertising revenue, acquire users for their apps, and gain insight about their users. The company has a platform that enables advertisers powerful Mobile Audience Solutions (MAS) that use the significant scale, sophisticated targeting and uniquely engaging creative capabilities to deliver meaningful results. The article (see Buy Millennial Media Prior To Q4 Earnings ) had suggested buying the stock prior to this earnings release as all data pointed towards huge numbers. Even ...

Millennial Media ( MM ) remains the leading independent mobile advertising network with a market share behind Google ( GOOG ) . The company had one of the hottest IPOs in 2012 yet the stock fizzled from day one. As the mobile advertising market heats up should this stock trade near the lows? The company is the leading independent mobile ad network provider. Its technology, tools, and services help developers maximize their advertising revenue, acquire users for their apps, and gain insight about their users. The company has a platform that enables advertisers powerful Mobile Audience Solutions (MAS) that utilize the significant scale, sophisticated targeting and uniquely engaging creative capabilities to deliver meaningful results. The company reports earnings on the 19th and investors should consider entering the stock prior to the release as mobile advertising heats up. Read the full article at Seeking Alpha. Disclosure: Long VELT. Please review the disclaimer ...

This article is the second in a monthly series to analyze the stocks at the forefront of the monetization of the trend towards mobile data traffic. The original mobile monetization index highlighted the leading public companies. The concept was created as the market continuously lumped the new mobile stocks into the original failures of the relatively old companies such as Facebook (FB) and Google (GOOG) . Recently Facebook reported a huge improvement in the monetization of mobile traffic providing hope for the sector A range of companies benefiting from this shift to mobile traffic continues to grow. The industries range from Advertising to Real Estate to Travel with varying degrees of success and profits. Read the full article at Seeking Alpha. Disclosure. Long AAPL, GLUU, VELT. Please review the disclaimer page for more details. 

The below commerical is from Velti (VELT) , a leader in the mobile marketing and advertising sectors. The stock continues suffer though the company has substantial growth and profits. Interesting to see the possibilities as shown via this ad. Disclosure: Long VELT. Please review the disclaimer page for more details. 

With the much-published failures of Facebook (FB) and Google (GOOG) to monetize mobile traffic that switched from desktop, the sector has obtained a ton of bad press, mostly from uninformed journalists and investors not understanding the difference between legacy companies and new entrants focused on mobile. While other people focus on the rather large missteps, Stone Fox Capital has been focused on the companies benefiting from the monumental shift to mobile provided by fast wireless data networks and a movement to more advanced smartphones and now, more importantly, tablets. A whole slew of companies are benefiting from this shift as happens with every technological move. Legacy companies either aren't savvy enough to make the shift or the economic structure prohibits a move as revenue is cannibalized by the currently lower monetization rates. Read the full article at Seeking Alpha. Disclosure: Long VELT. Please review the disclaimer page for more details. 

Just a few days removed from the stock surging after announcing a huge deal with a U.S. brand, Velti's (VELT) stock ran into a couple of weak statements from analysts. After surging to over $10.40 on Wednesday, the stock ended down over 6% to $9.37 on Friday. The company engages in the provision of mobile marketing and advertising technology and solutions for brands, advertising agencies, mobile operators, and media companies around the world. Following a strong Q2 earnings report (see article here) in August, the stock had been on a huge run, so the drop on Friday might just be profit taking. The frustrating part for long-term investors is that the stock remains one of the cheapest around at only 9x forward estimates. How could any analyst say something to push the stock down from these levels? Read the full article at Seeking Alpha. Disclosure: Long VELT. Please review the disclaimer page for more details. 

Anybody following this blog for the last six months knows that Stone Fox Capital has been extremely bullish on the independent mobile advertising sector. Velti (VELT) remains our favorite while Millennial Media (MM) has quickly become a second favorite pick. Unfortunately the latter has jumped from $12 to $14 this week. The below interview on Mad Money has great review of the industry. The most important statement was that mobile monetization is not a problem, the problem is the migration from desktop to mobile. As with any industry, the legacy company is impacted while the new company gains the benefits. One part that concerns me is that Cramer didn't ask about the click fraud or click accidents on a mobile phone. The CEO mentioned the higher click thru rate, but it has largely been reported that users accidently click on mobile phones a lot more than desktops. Disclsoure: Long VELT. Please review the disclaimer page for more details.