KJP Posted August 12, 2016 Share Posted August 12, 2016 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. Same here Link to comment Share on other sites More sharing options...
sae85400 Posted August 12, 2016 Share Posted August 12, 2016 Price is up to high for me since April to make an entry point. However here is some good information from Greenhaven Road 2nd quarter letter: IDW Media ($22) Our purchase of IDW Media is very much in the vein of focusing on the journey of the company, which is very promising, as opposed to the quarterly earnings, which are not particularly promising or indicative of the future of the company. Since IDW has no analyst coverage, does not do quarterly conference calls, and historically has not done any investor presentations or investor relations, there is arguably not a consensus view of the company. IDW Media is a large holding of Adam Wyden of ADW capital. He was helpful in both highlighting the trajectory of the business as well as providing historical context. Adam generally holds fewer than 10 positions, so he knows as much about what is going on beneath the surface as is possible for his companies and was a far better guide than the whale watching captain. IDW Media has several attributes that we look for in an investment, including high insider ownership. In fact more than half of the company is owned by Howard Jonas. Howard’s name may be familiar, since IDW Media is a spinout from IDT, another Howard Jonas company. In the past we made several multiples of our money on our investment in Straight Path (STRP), was also a spinout from IDT and yet another Howard Jonas company. In addition to the Jonas family ownership, management owns another 15% of the company. In addition, the company has been able to grow revenue by more than 50% and EBITDA by more than 100% the last five years without raising additional capital through a combination of frugalness, execution, and the asset light nature of the industries they operate in. There is also an “ick” factor. Specifically, IDW Media trades “over the counter” or on the “pink sheets,” which is a non-starter for many investors. For me, the bar is higher with a pink sheet company. It requires more diligence as the likelihood of fraud is just higher. In the history of the fund, we have made one other pink sheet investment (Taro Pharmaceutical), which was ultimately a very profitable investment. IDW Media has two distinct businesses. The first is a boring, cash-flowing brochure distribution business. The company owns and manages more than 14,000 brochure stands in hotel lobbies that have paper brochures for all of the local attractions. This is a business where scale and route density matter. To be profitable, having as many stands as possible in a tight geographic proximity is ideal. IDW has grown through acquisition and is the largest player east of the Mississippi. This business generates a couple of million dollars per year in cash flow. We did not go wading into the pink sheets to own a piece of the brochure distribution business. It is a fine business with recurring revenue and reasonable margins, but it does not have the potential to return multiples of our investment, which is what we really need to be compensated for the lack of liquidity that comes with trading on the pink sheets. The more dynamic segment of IDW is its media business. IDW Media is the fourth largest publisher of comic books in the United States. They publish comic books for some widely known characters such as Teenage Mutant Ninja Turtles, Transformers, and Star Wars, but most of the content is far more niche. The company produces approximately 70 comic books and/or graphic novels per month Two years ago, the company made a conscious decision to stop licensing its characters to others media companies and to attempt to produce television shows and movies themselves. While this would require more work and upfront expense, if successful it would provide the company with creative and business control, as well as improved economics. Over the last two years, the company has invested substantial time and millions of dollars into this effort, without offsetting revenue. Revenues from TV shows are not recognized until a show is delivered to a network, which typically happens a week or two before the show airs. Even though the media production efforts are not currently showing up in the financials, in reality, the TV effort is off to a very promising start. The small IDW team has sold two shows to networks with a substantial and promising pipeline of additional opportunities. This year, the first show, “Wynonna Earp,” aired on SYFY Network. The second show, based off of a British detective series, “Dirk Gently,” will air this fall. The “Dirk Gently” show will star Elijah Wood, who previously starred in “The Lord of the Rings.” In addition to the two shows that will air, there is a pipeline of other shows in different stages of development. It is quite possible the company will have three to five shows on air in 2017. This is impressive from a standing start and would imply a more than $25M increase in revenue for a media company that did less than $30M last year, or almost a doubling. The company has been slow to disclose financial details on specific shows. The exact economics are difficult to model because each show will have a different revenue and contribution profile depending on the network it airs on, where it is shot, and its international appeal. From looking at the margin structures of other small television production companies such as DHX Media, EBITDA in excess of $12M is possible for the television segment, implying a company-wide EBITDA in excess of $20M with the potential to grow another 50% in 2018 as international rights revenues are received for the shows. In addition to television, the company is set to have success in movies and in games. For example, Stephen Spielberg’s Amblin Entertainment has announced a movie starring Jim Carrey based on IDW’s horror comic book title “Aleister Arcane.” The games division is small, with a little more than $2M in revenue for FY15 vs. an overall revenue base of just under $50M. The games division is attractive for a number of reasons. The first is that games can have a much longer shelf life than TV and comic books. This can lead to a base of more predictable earnings. It is also another way to monetize characters and fan engagement. The company recently announced that their Teenage Mutant Ninja Turtles game that will be released for the holidays will be the largest product in the history of the company. The core thesis behind our investment in IDW Media is that content is being increasingly fragmented. As we have gone from a media landscape with three broadcast channels to cable systems with hundreds of channels and YouTube, Netflix, Amazon, and other video platforms, there is a dramatic increase in the need for original content. In addition, as outlets increase and production costs decrease, increasingly niche content is viable. There are hundreds of cable channels trying to differentiate themselves based on original content, and for quality content, the lifespan is longer as video on demand becomes a preferred way to consume content. In addition, there are international rights, which can be as big or bigger than the domestic rights for shows. If the company executes on the plan, IDW will be able to monetize its library and storytelling skills in movies, television, and games. Effectively, there is a much larger opportunity beyond comic books. Our share purchases were made with an enterprise value of approximately $100M. As the economics of multiple television and movie products with their domestic and international rights begin to flow through the income statement, earnings can easily grow more than three times. In addition to earnings growth, the company may benefit from multiple expansion as management has indicated it will eventually “up list” and leave the pink sheets for the NASDAQ. Given all of the other Howard Jonas companies are trading on the Nasdaq in addition to several sound business reasons to “up list” I think it is matter of when and not if. Often when companies do this, a new segment of buyers who were either turned off by the pink sheet status – or even restricted from investing in companies listed on the pink sheets -- will invest. Interestingly, for investors who solely rely on Bloomberg, none of the progress in entertainment is evident. Not a single one of the press releases is listed in the news section. The pink sheets are littered with frauds and “story stocks.” Much like the minute-to-minute movements of a whale, the short-term economics of IDW Media are difficult to model as the company continues to invest in the division and the profitability is backend loaded after shows are delivered. Nevertheless, it is clear the company is headed in a very productive direction and, if Ted Adams and his team continue to execute, there is substantial upside in IDW Media’s journey from the pink sheets to the NASDAQ." Link to comment Share on other sites More sharing options...
whatdadil9 Posted August 16, 2016 Author Share Posted August 16, 2016 Interesting press release on "march trilogy" by Congressman John Lewis... http://finance.yahoo.com/news/congressman-john-lewiss-march-dominates-175242974.html March has been selling like crazy...Topping just about every best seller list. Between the three editions, I do not think it is unreasonable to think that min 150k copies will get sold this year. Could be alot more. These things sell 20.00 at retail.. That could be an incremental 3mm in sales. Incremental margins on these types of books by our estimation are around 60 pct potentially adding close to 2mm of EBITDA. More importantly, given the subject matter of March and its timeliness given today's climate... it would not be unreasonable to think networks/studios would be clamoring to make this into tv, mini-series, movie... clearly John Lewis is a big time figure and could garner alot of interest...it is certainly manifesting itself with book sales. The IP flywheel is spinning and our library is only growing.. While more and more tv production is growing/developing which will lead to step function growth in EBITDA in the intermediate term... so is the library of producible content which increases our optionality/probability of success. Link to comment Share on other sites More sharing options...
RedDaruma Posted August 17, 2016 Share Posted August 17, 2016 Can anybody share ADW's 1Q 2015 letter, in which IDWM was initially pitched by Adam Wyden? Thanks. Link to comment Share on other sites More sharing options...
whatdadil9 Posted August 18, 2016 Author Share Posted August 18, 2016 see attached...ADW_Capital_Management_LLC__Q1_2015_Investor_Letter.pdf Link to comment Share on other sites More sharing options...
RedDaruma Posted August 18, 2016 Share Posted August 18, 2016 see attached... Thank you very much, whatdadil9! Link to comment Share on other sites More sharing options...
whatdadil9 Posted August 18, 2016 Author Share Posted August 18, 2016 HUGE news Dirk Gently. http://deadline.com/2016/08/netflix-co-produce-dirk-gentlys-holistic-detective-agency-bbc-america-amc-studios-1201805456/ International rights already sold... .basically guarantees multiple seasons also... HUGEEEEE. Link to comment Share on other sites More sharing options...
RedDaruma Posted August 24, 2016 Share Posted August 24, 2016 Hi Aman- As you can imagine every TV deal is structured differently. What I can tell you is that for non major networks (ABC, NBC, CBS) like these 500k- 1mm per episode in revenues is not out of the ordinary. The margins are also very high. I encourage you to look at DHX Media for reference/comps. We think incremental EBITDA margins could be north of 50 percent maybe higher ---certainly at scale. So to answer your question: Yes, these three shows should move EBITDA on a consolidated basis materially. There is also a cross selling opportunity in terms of the board game and graphic novel biz. In connection with the recently aired Wynonna Earp, the publishing arm is releasing new comic books and plans to release a new board game as well. If you have ever invested in a "jonas" company you would know that these guys are intensely opportunistic and entrepreneurial. This Company is an interesting mix of current growing cash flow while seeding an increasing number of call options that can become recurring cash flow. Valiant Entertainment raised substantial dollars at a 100mm premoney valuation at the corporate level with only a couple mm dollars of sales and negative profits. They have also yet to "air" any of their properties. If we assume that IDW Entertainment is worth at least what Valiant was valued at (Its worth more) than you are getting publishing and the other biz for free. Or said another way, if you eliminate corporate overhead and investment in entertainment the core biz more than covers today enterprise value -- you are getting entertainment for free.... We think there are a ton of ways to win here and these companies rarely stay independent forever. Our guess is that in 2017 when the Conmpany has the entertainment EBITDA behind them the Company will pursue their previously announced uplist/get research coverage/pursue an IR campaign that will narrow the valuation discount... Content still is king and these guys have a really nice growing library of it... Hi whatdadil9, I'm doing my research on IDWM and your threads have been very helpful. From what you touched upon in the past threads, can you share your ests for its corporate overhead and investment in entertainment in 2015 and 2014? Plus, maintenance capex, if any. Also, can you tell me the exact date CS published an initiation report on Entertainment One? I’m trying to get more familiar with how TV economics work for those new entrants. Thank you for your help. RD Link to comment Share on other sites More sharing options...
whatdadil9 Posted August 24, 2016 Author Share Posted August 24, 2016 CS Report was December 16, 2015, I believe out of their European Office. I think they also have a deck online that is helpful also... Maintenance capex is diminimus prob relates exclusively for CTM side. Maybe a tiny bit for computers/tech at IDW for publishing... Here's the issue with approximating "growth investments/G&A" expense. There is some expense directly related to the production of entertainment -- scripts, marketing, etc. Not sure how much that is but dont think its a huge number prob less than 1mm bucks a year. Could be as low as 200k. The real investment in entertainment thru cash contribution is capitalized and then amortized as the show is delivered and revenue is recognized... This assumes IDW contributes cash at a min IRR hurdle of 35-50 pct (per mgmts comments)...IN many cases IDW pre sells enough windows ahead of airing/production that they are in for no money or negative carry (ROIC...)... The lionshare of the "growth spend" is personnel ... David Ozer and his people their salaries (wont scale with GM dollars). New HQ in San Diego. Startup costs with Games and growth in publishing staff /top shelf acquisition. Also Ted got promoted to CEO and I suspect we have some more corporate overhead there... That being said, it is our understanding that this 2,3,4mm of "growth g&A" will get us a long way and that the incremental GMs from Games, books, and tv should approximate incremental EBITDA... If you want to "audit" this I suggest you look at the growth in Historical GM dollars and the lack of EBITDA growth...That should give you a sense of the order of magnitude of the growth investments. I think this we are at the tail end of this growth investment cycle with material contributions from publishing (March John Lewis), Games (TMNT/Machikoro/more), and obviously the booking of revenues at entertainment that was only a cost center. While I cant tell you what I think EBITDA tomorrow, I can tell you the tide has definitively turned and should start increasing. I still feel confident in our assumption that in FY18 with 2-3 TV SHOWS on this can be a 20/30mm EBITDA biz. With 3,4,5 and one of them a hit could be alot more. Seems like a pretty good risk/reward given mgmt and board is alligned to maximize shareholder value. Let us not forget that Jonas incubated IDT entertainment with David Ozer over 10 years ago and sold that for 500mm to Malone. Hes done this before. Link to comment Share on other sites More sharing options...
RedDaruma Posted August 24, 2016 Share Posted August 24, 2016 Thank you, whatdadil9. I hope the mgmt will provide more details re their IDWE financials going forward but the valuation is not so demanding even after the recent run of the share price, based on what they can earn with already sold TV programs only. Thanks again. Link to comment Share on other sites More sharing options...
whatdadil9 Posted August 26, 2016 Author Share Posted August 26, 2016 We agree. The valuation is not so demanding based on already sold television and if 1-2 additional things go their way I think 30mm of EBITDA is acheivable. The reality is that this is a truly unique asset. TV production without content funnel is a 8,10, 12x EBITDA biz. Perhaps more to a strategic. But TV production with content / ip library to draw from that is growing is significantly more valuable. DWA was bought out at 30x TTM EBITDA. Valiant Comics which has no tv/movies SOLD yet raised 25 mm at over 100 mm pre money valuation with 2mm of comic book sales and substantially negative EBITDA...Gives you a sense of what content libraries are worth given the proliferation of technological distribution. Distribution is key in the case of internet/railroads when the road is a defacto monopoly. Here there are so many different mediums to "transport" the content --- NFLX, HULU, AMZN, etc. All these guys are starting to produce their own content because they realize their distribution platform is only as good as the content they have. Why wouldnt they want to buy IDWM before the auction process for content gets out of control... my .02 Link to comment Share on other sites More sharing options...
whatdadil9 Posted September 8, 2016 Author Share Posted September 8, 2016 IDW presenting at Liolos at 5:30 PM EST today. Webcast will be archived as well. http://finance.yahoo.com/news/fully-integrated-media-company-idw-120000275.html Link to comment Share on other sites More sharing options...
whatdadil9 Posted September 19, 2016 Author Share Posted September 19, 2016 New TMNT comic universe.... https://www.washingtonpost.com/news/comic-riffs/wp/2016/09/13/a-teenage-mutant-ninja-turtles-comic-that-wont-star-the-teenage-mutant-ninja-turtles/ this could be very interesting. Link to comment Share on other sites More sharing options...
doughishere Posted September 19, 2016 Share Posted September 19, 2016 I thought those graphic novels by Congressmen Lewis were excellent. Broadway actually published a similar graphic novel about the Harlem Hellfighters and I think there was some talks about Sony making a movie with Overbrook Entertainment (Will Smith is a partner) so there could be some push to get it done. Personally, Id like to see it made.......point is there could be a market for such historical graphic novels.....I know theres a lot of just pure historical fiction out there. Link to comment Share on other sites More sharing options...
whatdadil9 Posted October 16, 2016 Author Share Posted October 16, 2016 great article on IDW....only more to come here... http://www.cnbc.com/2016/10/15/idw-takes-aim-at-dirupting-the-market-for-comic-book-tv.html Link to comment Share on other sites More sharing options...
whatdadil9 Posted October 21, 2016 Author Share Posted October 21, 2016 MEDIA MERGERS... How is this not good for IDW? Big players like ATT/DIS/etc.are going to need to buy premium content. Carriage providers are seeing their fees go down. So what do you do? You buy content... Link to comment Share on other sites More sharing options...
whatdadil9 Posted October 24, 2016 Author Share Posted October 24, 2016 Amazing article on IDW's glide path.. some intg tidbits on entertainment... https://www.fastcocreate.com/3064759/creation-stories/how-publisher-idw-is-using-its-comic-book-experience-to-build-a-tv-brand Link to comment Share on other sites More sharing options...
whatdadil9 Posted October 24, 2016 Author Share Posted October 24, 2016 Max landis unplugged on Dirk... really explains it... http://www.bbcamerica.com/shows/dirk-gentlys-holistic-detective-agency/video-extras/season-4/episode-01-horizons/max-landis-video-blog-you-should-be-confused Link to comment Share on other sites More sharing options...
whatdadil9 Posted October 26, 2016 Author Share Posted October 26, 2016 What sucks? Show not available for free anymore? I know its available on amazon and hulu now and also itunes sell thru. I thought show was great and so does NFLX apparently as they already bought the worldwide intl rights...this will go many seasons and has a great cast. Dirk, wynonna, locke and key definitively for 2017. Brooklyn should get made as USA canned other stuff last year and are reworkign this. One more show by 2018 and there are 5 shows on the air. 5 shows at 5mm of ebitda min. is 25mm ebitda entertainment + 10-15 from everything else points to 35-40m of EBITDA in 18... I would also caveat that 5 shows seems more like a base case than anything else here... 40mm of EBITDA at 30x to a big studio is 1.2+BN ... Starz entertainment sale, Net2Phone sale, STRP, etc. points to Howard's ability to do these monetizations...long runway here.... Link to comment Share on other sites More sharing options...
whatdadil9 Posted November 21, 2016 Author Share Posted November 21, 2016 Dirk just gets renwed for second season. Who could be selling? Link to comment Share on other sites More sharing options...
whatdadil9 Posted January 13, 2017 Author Share Posted January 13, 2017 Another day another TV show.... http://www.hollywoodreporter.com/live-feed/greys-anatomys-ellen-pompeo-idw-developing-devil-limited-series-963763 Link to comment Share on other sites More sharing options...
ScottHall Posted February 1, 2017 Share Posted February 1, 2017 This company is fucking sick. They just sent me an update on business affairs, with a "special shareholder's edition" of a recent comic book that did quite well. I'm familiar with the series (read a few of their books when doing DD on this name) so this is pretty cool. I wish more companies would send shareholders surprise gifts from time to time; it makes being a shareholder sort of fun. Could be useful to get kids more involved than the usual trick of buying companies they understand as an introduction, as that is still sort of abstract. Link to comment Share on other sites More sharing options...
eclecticvalue Posted February 2, 2017 Share Posted February 2, 2017 Bah, should've bought the shares. I remember seeing a marvel annual report featuring comic book characters in it. It came in a nice hardbound cover. Link to comment Share on other sites More sharing options...
RedDaruma Posted February 13, 2017 Share Posted February 13, 2017 Looking at IDWM's Q4 results, the revenue at IDWE segment doubled sequentially from Q3. Q3 results should include the contributions from 8 episodes of Wynonna Earp vs. only 2 episodes of Dirk Gntly in Q4. Anybody have thoughts on the rev gap b/w Q3 and Q4? I believe Q4 numbers also includes the revenue from Wynonna Earps' foreign licensing but I thought this will kick in CY2017. Thanks, RD Link to comment Share on other sites More sharing options...
whatdadil9 Posted April 10, 2017 Author Share Posted April 10, 2017 http://finance.yahoo.com/news/t-enters-definitive-agreement-acquire-123000231.html Howard Jonas strikes again. 1.2bn equates to like 60.00 for an original "IDT" share pre-spins... This is incrementally positive for IDWM as it shows Howard is continuing to show his immense track record in monetizing assets to strategics at great premiums but also that hes not emotionally attached to assets either. I suspect IDW will follow a similar outcome as howard hates taxes and would gladly take stock from a media giant like AMC, DIS, NFLX, AMZN, etc.. Link to comment Share on other sites More sharing options...
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