Out Fox The $treet

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...

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. 

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. 

Velti (VELT) announced a $27M deal for two years of mobile marketing services for a major US brand. The stock is soaring 13% in part due to the size of the deal, but most importantly is the payment terms of 30 days. The stock was absolutely crushed earlier this year on the news of weak DSOs and cash flow issues from European customers that were taking 270 days to pay bills. The recent 70% revenue growth in Q2 didn't push the stock up as investors remained concerned that customers were not paying bills. With the stock trading at a forward PE below 10, this stock has huge upside as this deal highlights the demand for mobile marketing. It also confirms management statements that US customers would pay on better terms making the going forward DSOs significantly lower. While the chart below shows a stock that has nearly doubled from the lows, it also highlights one that hasn't even recovered from the May highs. If investors start believing in the story, this stock has huge u...

fter reporting earnings on Tuesday morning, Velti (VELT) jumped nearly 12% after beating analyst revenue estimates. Combined with a big gain on Monday, the stock had a nearly 20% two day gain. Amazingly though, it still trades at extremely low valuations. 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. Read the full article at Seeking Alpha. Disclosure: Long VELT, CJES, and SODA. Please review the disclaimer page for more details. 

After repeatedly hearing so many issues with monetizing mobile traffic from the likes of Facebook (FB) , Millennial Media (MM) continues to report massive growth. The company reported 75% revenue growth in Q2 2012. This number bodes well for Velti (VELT) owned in our models. The CEO of MM went on CNBC this morning. Its worth a watch for anybody interested in the sector. One of the most important take aways from this industry is that companies moving from a reliance on desktop supported ads for revenue to mobile is having a hard time matching those numbers. In cases such as Facebook, the company wasn't even ready for the transition to mobile by customers. Another important distinction is that a major difference exists between a retailer advertising on mobile versus Facebook attempting to place ads on mobile devices.  Companies such as MM and VELT sees gains from all the new traffic migrating to mobile. Anything is a net positive to them no matter whether i...

Ever since Facebook (FB) filed in a S-1 prior to the IPO that it was struggling to monetize mobile ads, the sector has been crushed. Both mobile ad network Millennial Media (MM) and mobile ad agency Velti (VELT) were absolutely crushed. According to the Millennial Media CEO appearing on CNBC yesterday, mobile is monetizing just fine. The selloff was clearly over done and another example of a hot IPO that can be scalped in the after market at favorable prices for investors willing to be patient. Those chasing the initial nearly 100% surge were hammered. Not much to tell from the chart so far, but a potential bottom occurred last week. Disclosure: Long VELT. Please review the disclaimer page for more details. 

After a 33% drubbing today due to irrational fears over the cash conversion cycle, Velti's (VELT) CEO will present at 8:40 AM E.T at the J.P. Morgan Technology conference. Talk about ideal timing if he has a good story to tell. As posted last night on this blog, the CEO has a good explanation for the higher receivables. The company has now history of writing off bad debt so the concern is clearly overblown. The question is whether he can say anything that soothes the market or if the shorts will press even further if he doesn't provide something of substance. Details on the stock moving call: Alex Moukas, Chief Executive Officer will present at the J.P. Morgan Technology, Media and Telecom Conference, to be held at the Westin Waterfront Hotel in Boston, Massachusetts on Thursday, May 17 2012 at 8:40 AM ET. A live audio webcast of the presentation will be available at: http://jpmorgan.metameetings.com/webcasts/tmt12/directlink.php?ticker=VELT and will subsequently ...

Or at least for the moment, iAd has been one of the few recent product failures for Apple (AAPL) . As a long time Apple investor, this honestly doesn't move the needle for them so it isn't much of a concern. Actually, I'd prefer that the company stay out of the ad market all together. Focus on the phone, tablet, and possibly tv markets. As we've written over on Seeking Alpha in 2 articles ( I , II ) about the Millennial Media (MM) IPO, device makers just aren't going to be successful creating systems such as ad networks that only target just the users of those devices. Clearly Samsung has learned nothing from Apple's failure. On a bigger picture, this speaks to some of the issues Apple originally had in the PC market. It had the better PCs and operating system, but the ability of Windows based systems to create cheaper machines and more software eventually over took what Apple could do in a controlled environment. Will history repeat itself again in the p...

It was just over a week ago that the Millennial Media (MM) IPO opened nearly double the IPO price. The stock soared to $28 on high hopes of new investors hoping to capture a part of the fast growing mobile ad market. Now after the first full week of trading, the stock has plunged all the way down to $18.42. What happened? What caused a hot IPO to plunge 26% from the opening day closing price in just a week? My only guess is that the Samsung (SSNLF.PK) announcement of building its own mobile ad exchange for its wireless devices scared off the enthusiasm for the hot IPO. Velti Remains More Attractive To be fair, my recent assessment was that Millennial Media was vastly overpriced and that Velti (VELT) was a much better deal. The recent drop has brought Millennial's valuation more in line with reality, but the impact has also been felt by Velti making it that much cheaper as well. Not to mention, the impact of the Samsung mobile exchange will directly impact Millennial more t...