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IDWM - IDW Media Holdings Inc.


whatdadil9

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IDW taking big first step on capital markets initiative / uplist. Presenting on June 7th at 4pm at LD Micro in LA. Hopefully it will be webcasted/posted on their website. Because the Company does not routinely do conference calls, et. al this will be a unique opportunity to hear about the growth strategy at IDW...

 

http://www.events.ldmicro.com/agenda/

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I am assuming this is the deck

http://idwmediaholdings.com/about/

 

That might be it, but that one's quite old and is missing most of the recent developments.  I hope they've put together something more recent that sheds some light on the economics of the TV shows.

 

Yeah, what's on the website isn't the deck.  You can get audio of the presentation and the deck by clicking on the "Webcast Registration" link in the June press release.

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Yes. Webcast had some pretty monster reveals. Most notably: wormwood is direct to series. wynonna is def getting second season. TMNT board game will be largest product by revenue in idw's 17 year history.

 

the Company doesnt want to discuss too much what the economics of the tv shows are for competitive reasons but if you are an astute investor you can figure out what the economics are based on what networks the shows are being pre sold on / tranching of the other windows --- SVOD/ALL you can eat/etc. If you are lazy you can throw up your hands and say I dont know what the economics of tv are. If you are smart, you can do scuttlebutt and talk to people at networks. There is an intiation report on Entertainment One that Credit Suisse did awhile back. they do an acceptable job showing how TV economics work. The variance is obviously how succesful it is: multiple seasons/addtional windows etc.

 

I am still highly confident that 2017 could produce EBITDA in the 25-30mm range...

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  • 2 weeks later...

Pretty rough quarter on the comics side. Can tell they're not BSing about industry weakness; Diamond publishes market share and YOY numbers monthly. Industry as a whole is getting hammered at the moment.

 

Also got a look at the Wynonna Earp revs. Looks interesting. I looked at DHX about a year ago. I'm curious if what's reported in the quarter is for the full season of Earp or just what had aired as of April 30th. Makes a big difference.

 

Also curious to see if Earp gets renewed; ratings don't look spectacular. If it doesn't, I'd be interested in buying more shares at what would likely be a lower price.

 

If TV and film is to be the big business moving forward, profitability from the comics division is less important to me. It basically serves as a cheap internal R&D program to see what sticks; same thing as Marvel has done, basically. The stories for its films are mostly based off of storylines that originated in the comics.

 

I bought a small position at $35. I remember looking at this right after the spin-off and passed. Oops.

 

http://idwmediaholdings.com/investor-relations/financial-reports/

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Rights offering is straight out of John Malone playbook.

 

But even better...

 

We got a movie with Jim Carey!!!! Scott Hall sees it. Comic books is just this emporium of content to get tv/movies done. I think it will do better over time but it is this massive untapped goldmine. Other production companies like Dreamworks,LGF, Summit, etc. have to acquire the rights. We already have them!!!!

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Look at it in balance. Bill Martin just got a board seat....They are obviously involved in that discussion also....Every decision that has been made so far has been smart and benefitted all shareholders...

 

What they are doing here is minimally dillutive and allows them an opportunity to see the entertainment thing and potentially raise "external" capital at much higher valuation. This seems smart. The suspension of the dividend+small capital raise internally was actually quite favorable for minorities versus going and raising a larger amount externally to finance growing TV production -- which I might add is only really working capital based on the upfront commitments....

 

All in all, I think this is great transaction and gives us all nice optionality in the future.

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The suspension of the dividend+small capital raise internally was actually quite favorable for minorities versus going and raising a larger amount externally to finance growing TV production -- which I might add is only really working capital based on the upfront commitments....

 

The shares are trading (admittedly with little liquidity) at $35-$38, but they chose to price the offering to insiders at $21/share.  How is that "actually quite favorable for minorities" relative to, for example, taking on some debt?

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Well.... They are giving the same deal to minorities...Alllowing them to also purchase shares at 21.00.

 

The argument is that minorities may not do so b/c they dont have the cash or dont have more than 3k shares.... To be completely honest, I am really happy that Ted and Robbie from IDW converted their shares into IDW Media Holdings and if they get pick up a little equity pro-rata from squeeze-out of shareholders of less than 3k shares who the eff cares. Ted is a beast and for all intents and purposes was a minority before. Governance is improving alot and these are good first (and necessary) steps towards re-listing on a major exchange/sec registation. Call me any rand'ish but if you are one of the people who own less than 3k shares...tough noogies... Can always buy more.. Also, on an economic basis the fact that they are only raising 4mm bucks really limits reall dilution in aggregate when you think about it...

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Well you've gone 180 degrees from saying this deal is "quite favorable" to minority shareholders to saying "eff them" and "tough noogies" to anyone who holds less than $110,000 worth of the company's shares.  Your second take accurately reflects management's attitude, I think. 

 

The next time around, you might be on the wrong side of the line.  Will you be saying "eff me" and "tough noogies to me" then?

 

The deal would be perfectly fine and fair if all shareholders were given an equal opportunity to participate.  Was there any reason why they couldn't have had a rights offering for all shareholders?  If not, then insiders are simply lining their own pockets at small shareholders' expense, and it's disgusting. 

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I guess im on the other side of the 3k shares...but then again I have also owned since spin so 3k shares didnt cost much then....

 

I hear you. But perhaps there are alot of small shareholders who own less than 3k shares and the administrative cost/hassle of filling out/processing all those subsctiption documents / enforcing the "PIPE" trading rules were too difficult. As an issuer of a "PIPE" there are also certain accredited investor rules. more than 1.5m of liquid networth or income test greater than 300k for two consecutive years..Perhaps this is a backwards way of enforcing that? I dunno. I am sure if you went to the Company with 2k shares and wanted to petition I am sure you could prob get your allotment. All things being equal, I think this addtional capital will improve "MINORITY minority" shareholders and if owning 98 pct of smthg that can be alot bigger thats worse than owning 100 pct of smthg that doesnt get there.

 

I get it. It's not ideal. But if you are that passionate about it, I suggest you email the CFO and see if they will make an exception for you. My experiences with them have been quite favorable.

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  • 4 weeks later...

Looks like Wynnona Earp is getting second season US and will air in 2017. Here is the potential lineup as I see for TV at IDW in Fiscal 17:

 

1. Wynnona Season Two

2. Dirk Season One

3. Wormwood (Company said at LD Micro going to market very soon on it --> should be quick turnaround)

4. Locke and Key (Joe Hill said pilot writing almost done and at LD Micro company said networks already banging down door -->quick turnaround)

5. Brooklyn Animal Control (Company is re-working pilot with USA). This title has the potential for real broadbase appeal. Even if USA doesnt follow thru (which i think they will eventually) I think this could easily be shopped to SyFY or NFLX given the demographics...

 

I think there is a very good shot of 5 TV shows hitting the financials next year....We also have the movies that are in development. Those are more back end loaded given the capital requirements but provided additional upside. Michael Bay movie and Jim Carrey both slated for 17...

 

 

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  • 2 weeks later...

This is a stock that trades on the pink sheets, they don't do quarterly conference calls, there are no sellside analysts, they have done one investor presentation in the last 5 years - I personally find it helpful to have facts shared about the company.

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