P: Dumb or Defeated? (Ticketfly)

Takeaway: Spending +60% of its cash to acquire an ancillary business ahead of a potentially crippling Web IV decision is a very telling statement.

KEY POINTS

  1. BRANCHING INTO TICKETING: P is acquiring Ticketfly for $450M, split equally between cash and stock.  Ticketfly generated $55M in 2014 revenue, and $35M in 1H15 revenue.  P didn't provide any info regarding Ticketfly's margin profile, but it's not likely that P will recoup the $225M cash acquisition price in Ticketfly cashflow anytime soon.  Note that this is a particularly aggressive move for a company with only $372M in cash on its balance sheet.  If P wanted exposure to ticketing, it could have done so through any number of partner agreements.  
  2. DUMB OR DEFEATED? Remember that P doesn't generate any material cash flow as it is, so spending over 60% of its remaining cash to acquire a new business ahead of a potentially crippling Web IV decision is a very telling statement either way.  P is either overconfident in the Web IV outcome to the point where it can start depleting its cash reserves, or it is getting ready to blow up its model ahead of an adverse outcome, and needs another story to pitch the street.  Either way P's financial flexibility will be considerably hampered after the close of the acquisition, so P will have even less wiggle room to absorb a rate increase.  And for those of you who think that can't happen, please read the note below. 

 

P: It's All About the Benchmarks (Web IV)

10/02/15 12:22 PM EDT
[click here]

  

Let us know if you have any questions or would like to discuss in more detail.

 

Hesham Shaaban, CFA


@HedgeyeInternet  


GOLD: A Deep Dive on What’s Next with a Top Commodities Strategist

“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.

read more

Exact Sciences Up +24% This Week... What's Next? | $EXAS

We remain long Exact Sciences in the Hedgeye Healthcare Position Monitor.

read more

Inside the Atlanta Fed's Flawed GDP Tracker

"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.

read more

Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

read more

People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

read more

UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

read more

Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more

Got Process? Zero Hedge Sells Fear, Not Truth

Fear sells. Always has. Look no further than Zero Hedge.

read more

REPLAY: Review of $EXAS Earnings Call (A Hedgeye Best Idea Long)

Our Healthcare Team made a monster call to be long EXAS - hear their updated thoughts.

read more

Capital Brief: 5 Things to Watch Right Now In Washington

Here's a quick look at some key issues investors should keep an eye on from Hedgeye's JT Taylor and our team of Washington Policy analysts in D.C.

read more