AIM.TO - Aimia

[movys]

If Aimia plays this correctly and does as Wabuffo has suggested (maintain strong balance sheet and demonstrate a willingness say "no" to low-ball offers and devalue points), then AM's decision on whether to renew in 2030 will be a function of what Air Canada's decision was: how much do i have to pay to get this asset vs how much would it cost me to build it from scratch? 

 

I have already discussed the difficulties associated with building from scratch (convincing new members to put your card "front of wallet," etc.), and Air Canada knew this all too well.  They clearly would have paid for more for Aeroplan if Aimia had been more thoughtful about preparing for this moment.

 

Also...Aimia doesn't need AM to buy them out in order to surface the value here.  A spin or partial IPO of PLM would work beautifully.  I have no idea where PLM would trade, but what would you pay for a rapidly growing high ROIC business with negative working capital, tax advantages, and that continues to dividend its excess "float" and income to you?  a high-single or low-double digits multiple of EBITDA is totally reasonable for a company with these secular tailwinds.

[wabuffo]

If Aimia plays this correctly

 

Movys, I'm afraid that these bozos have no feel for capital markets.  Their CDLX sale has already cost them $12.5m CAD in opportunity cost.  Their NCIB and tender have cost them $45.5m CAD in opportunity cost (if buybacks in a liquidation made any sense at all).

 

All because they are impatient and panicky patsies who sell-low/buy-high.

 

All they had to do was cut their opex and liquidate ILS such that the PLM dividends of $20m USD per year more than covered their SG&A cash burn.  They should not have paid to make the preferreds or common current nor buy back any shares.  Then they could wait out everybody and take their time until the moment when everyone else was a panicked buyer or seller.

 

Oh well.

 

wabuffo (stuckvestor)

[Pref User]

On the spin-off idea I guess that comes down to what the agreement between Aeromexico and Aimia says. Would the value of the spin-off just trade around Aeromexico's offer? I understand everything you are saying about the metrics of the company, but it comes down to expectations. If it trades at $485 M USD it means that 100% Aeromexico is renewing, I understand it's all the same tactics as Air Canada but for investors it should comes down to risk-reward and at $485 M USD valuation I would be getting out the spin-off right away.

 

I doubt Aimia would be allowed to spin-off its interest in PLM, if it is why isn't Mittleman pounding the table to realize value on it? It is the key part of there thesis now. Then if you spin-off PLM the main business loses the thesis that Aimia will have all this capital for a good allocator to compound into the future. The only way it would work is if the spin-off takes on debt and dividends it back to Aimia which usually happens with spin-offs, so then you next have to find someone to lend more than $180 M to the PLM spin, which then the debt would essentially own the company.

 

Can Aimia spin the capital gain to the spin? If not then you need to factor in a capital gain's tax into the spin-off value.

 

I also did more research and now understand more the front of wallet argument. My bad guys. I am just trying to be a devil's advocate, it helps me with investing.

[Tomahawk25]

I've been following these posts for a while (thanks for all the wise thoughts) and traded in and out of AIM a few times for a small profit.  Now I'm out, and most likely staying out.  There is of course a price that's too low and stupid to ignore, but I'm not sure we're there yet. 

 

I have yet to see a single, or even a reasonable pattern, of good decisions made by mgmt (or even Mittleman).  There does not appear to be a catalyst to realize value, whether liquidation, merger, disposal of ILS, etc.  Now Mittleman and the Board seem to be turning to lawyers, which means delay and more money spent, and less forward progress overall.  Meanwhile the cash burn on the operating business outside PLM continues.  This feels like a "10 foot hurdle."  So much complexity, warring sides, and money burning.  Its a red flag that there is not a clear, explicit intention by mgmt to liquidate, or at the very least dispose of the loss making operations.  I learned the hard way on the hoped for RLM liquidation (now EPIX shares) that if there is not such an explicit declaration to realize value, then it will probably be frittered away somehow.  Perhaps Aimia is now near a bottom since many other shareholders are giving up on it too, I don't know.  But to quote Cigarbutt's previous post, "This investment fits in the potentially dwindling margin of safety, absence of clear catalyst and cash burn in the meantime category."

 

To quote the rest of Cigarbutt's post:

 

"It reminds me of what Mr. Peter Cundill, the regretted and perhaps not well known enough value investor who had described his approach to these kinds of opportunities. In There's always something to do, he mentions an example of a mistake where he had bought a company with valuable assets but which had a cash-losing sub which, in the end, ate away the margin of safety.

 

It often pays to buy into uncertainty but there does not appear to be, for now, an obvious catalyst. So, for now, buy them cheap and something good will happen? is the mantra.

 

A quote from Mr. Cundill:

"“One of the dangers about net-net investing is that you buy a net-net that begins to lose money, your net-net goes down and your opportunity to be able to make a profit becomes less secure. So the trade is not necessarily to predict what the earnings are going to be but to have a clear conviction that the company isn’t going bust and that your margin of safety will remain intact over time”.

 

As far as the Mittleman group, their major holdings (Revlon, AMC) are doing even more poorly than the median stock these days and redemption pressure may become significant. Given the NCIB is finished, I wonder if their block of AIM shares may not even become available for an interested taker."

[Cigarbutt]

Things have been unusually quiet and the market has adopted the melting ice cube theme.

 

1-On the Cardlytics front, if it made sense to sell half of their residual stake a short while ago, I guess it even makes more sense to sell the other half now. This is a two-sided coin situation: one could argue that they (the bozos with no feel for the capital markets) should have waited and sell all in one shot now but the other side would imply that they eventually obtained more (despite the liquidity haircut) by using the two-step selling strategy. I have trouble valuing Cardlytics based on fundamentals and feel that the current upswing is related to a component of 'hype' having to do with everything intelligent that uses 'data'. IMO, given present circumstances for Aimia, they should take advantage of the recent run and complete the monetization. So far, I understand that Aimia has sold their half-stake outside of the S-3 filing framework and I wonder if Cardlytics has plans to raise equity at current prices for acquisitions? If I were Aimia, it seems that their residual core business has some complementarity with what Cardlytics is doing and would consider a reasonable offer from them for the loyalty and analytics business unit. It may even have a positive NPV, given tax-related carryforwards despite Cardlytics not becoming profitable before 2020, at least.

https://www.aimia.com/is-convenience-the-new-loyalty/

 

2-Aeromexico published their operational results for August and it's struggling. Some of it comes from the Boeing issue but there appears to be an overall capacity issue. It will be interesting to see, in their next quarterly result, if PLM keeps growing profitably and if PLM's inherent counter-cyclical strength comes into play. I think it will and find that the late 2018 breakage adjustment may have been an early indicator of reliance on 'engagement' vs strength of demand for seats.

[Cigarbutt]

Cardlytics goes ahead with a seasoned offering which includes selling shareholders (but not Aimia). It's priced at 34$ and gross proceeds of 51M are expected. At the end of Q2, their net debt was -6.0M.

https://seekingalpha.com/pr/17628300-cardlytics-announces-pricing-public-offering-common-stock

 

The Mittleman team lines up its defense with a counterclaim and all. While exercising control or direction on 23.5% of shares, they seem to have relatively little influence on the evolving picture. I think it's time these guys come to terms over a beer.

https://finance.yahoo.com/news/mittleman-brothers-file-statement-defence-193200946.html

[movys]

anybody know if the complaints are public?

 

i don't put much stock in Mittleman's demands for CAD125M, though i'm curious about how they are arriving at that figure.  don't love the idea of Mittleman extracting compensatory damages from Aimia's coffers while the rest of us watch the share price fall...

 

"It is extremely disappointing that Aimia's board of directors (the "Board") has chosen to waste corporate assets through a campaign of litigation and entrenchment, rather than undertake meaningful engagement with its largest shareholder," said Chris Mittleman, Chief Investment Officer of Mittleman.

 

sound like Mittleman is open to a deal.

 

am also surprised we haven't yet heard from the Frischer group.  they are in touch with Mittleman so if Mittleman is making progress with mgmt I imagine they could keep Frischer at bay for the time being.

[movys]

nothing stops this train...

 

https://finance.yahoo.com/news/aimia-shareholders-accountability-requisition-special-151626620.html

 

https://finance.yahoo.com/news/aimia-acknowledges-receipt-requisition-shareholder-181600146.html

[Cigarbutt]

nothing stops this train...

 

https://finance.yahoo.com/news/aimia-shareholders-accountability-requisition-special-151626620.html

 

https://finance.yahoo.com/news/aimia-acknowledges-receipt-requisition-shareholder-181600146.html

The following excerpt from the 'acknowledgement' was interesting:

"Further, out of concern that the early warning reporting and takeover bid requirements under applicable securities laws, regulations and rules may not have been complied with, to the potential detriment of Aimia shareholders, Aimia sent a letter earlier this week to the members of the Frischer Group, Mittleman and certain other shareholders requesting particulars of any and all coordination activities, contacts and communications among such persons.  The company intends to take any and all appropriate action in the event any or all such persons have not fully complied with the regulatory regime." (my bold)

 

I guess they're 'concerned' about being ejected also and the comments lately suggest the possibility of take-over bid tactics (hostility vs defense).

 

Also, the Cardlytics offering may close as early as tomorrow and the underwriters are paying 32.30 per share. Let's see if Aimia can do better.

[Homestead31]

Special meeting called with a record date of Dec 23rd, and vote to be January 24th. 

 

There has obviously been some debate about what the NAV is here.  From my perspective, regardless if you think Mittleman's estimate is right or wrong, I think think this is a buy because regardless of what YOU think, MITTLEMAN thinks the NAV is ~100+% higher than the share price, and if you go back through his letters and interviews you can get real real comfortable with the idea that he is going to shrink that gap when they win.

[Cigarbutt]

Special meeting called with a record date of Dec 23rd, and vote to be January 24th. 

 

There has obviously been some debate about what the NAV is here.  From my perspective, regardless if you think Mittleman's estimate is right or wrong, I think think this is a buy because regardless of what YOU think, MITTLEMAN thinks the NAV is ~100+% higher than the share price, and if you go back through his letters and interviews you can get real real comfortable with the idea that he is going to shrink that gap when they win.

It's not clear, in my perspective, how the Mittleman team will shrink the gap.

 

Thanks to James23 on the stockhouse Board, there is one more input relevant to the valuation of the PLM stake. The playbook to repatriate parts of loyalty units shared previously has been refined by Air Canada and recently, in Brazil, Multiplus has been privatized (contract due for renewal in 2024) and Smiles is pursued by their parent in a similar way (contract expires in 2032). With this playbook, the typical 8-10x EBITDA multiple has been trimmed by 30 to 60% due to the essential role played by the airline anchor partner. James23 refers to recent events related to Velocity (2nd largest loyalty program in Australia, behind Qantas loyalty). Long story short: Virgin Australia has had a loyalty unit for a long time and sold 35% of it to Hong Kong-based Affinity group for 336M (AUD) at the end of 2014. The price paid was 12x EBITDA and about 210 AUD per member. Affinity had an exit plan in mind and held convertible notes. Recently, Affinity came up with the idea that it was time to sell their stake and they used the public offering threat. Even if Virgin Australia has a relatively weak balance sheet, they announced (deal should close by the end of 2019) that they will buy back the 34.82% interest for 700M (AUD), which corresponds to a 14-15x EBITDA multiple and about 200 AUD per member. It seems that they will issue shares and get access to cheap debt capital.

 

This may constitute an interesting input for the PLM stake. Since 2013-4, PLM has grown similarly to Velocity (revenue, EBITDA, number of members). In the last 12 months, PLM has reported an adjusted EBITDA of 83M (USD). The disclosure for Velocity accounting is relatively muted and they seem to recognize a part of revenue (marketing) earlier than PLM, whose accounting seems to be derived from the Aeroplan playbook but, from a cash flow point of view, both entities appear comparable. A point could be made that PLM distributes a relatively large amount of its cash flows. However, Affinity has received in distributions 174.1M (AUD) since 2015.

 

Perhaps contractual arrangements and the shareholders' agreement are different between Aimia and Aeromexico but the Velocity story shows that the game can be played differently.

https://www.asx.com.au/asxpdf/20190916/pdf/448jw0nlpy3mzh.pdf

https://loyaltylobby.com/2019/09/16/virgin-australia-buys-back-velocity-program-for-700-million-double-the-former-sales-price/

[Homestead31]

side note, related to the Virgin Australian transaction.... in the past people have commented that AeroMexico doesn't have the balance sheet to pay a fair price.  I think that is not the right way to pay for it. 

 

Virgin Australia doesnt have a great balance sheet.

 

But that misses  the point that its not really the airline that pays for these things, it is the card issuers and banks.

 

Concurrent to Air Canada giving Aimia ~$500M for Aeroplan, "Toronto-Dominion Bank and Canadian Imperial Bank of Commerce paid Air Canada about $822 million, on top of an undisclosed payment from Visa Canada Corp. TD and CIBC also made pre-payments of $400 million in total to the Aeroplan -- now Air Canada's subsidiary -- to be applied to future monthly payments "in respect of Aeroplan Miles," Air Canada said."  source:https://www.bnnbloomberg.ca/aimia-completes-sale-of-aeroplan-loyalty-program-to-air-canada-repays-debt-

 

I assume something similar will happen with Virgin Australia, and that something similar could happen with AeroMexico

 

 

[movys]

I find the stock action (or lack thereof) since the announcement of the special meeting incredibly interesting.  This is THE catalyst that the skeptics and long-suffering shareholders have been waiting for -- the chance to reconstitute the board.  Why does no one care?

 

I'm left to conclude that either A) the market thinks mgmt will win the vote or B) closing the gap to NAV is not possible even for sophisticated and thoughtful capital allocators.

 

Does mgmt have an ace up their sleeve I'm not aware of?  Are they able to prevent Mittleman from voting given the ongoing litigation between them?  Are there actually shareholders out there who want mgmt to stay in place??

 

My guess is there are more people concerned about conclusion B, and while monetizing PLM may not be a slam dunk, there are certainly many other levers a reconstituted board can easily pull to crystallize an incremental $1.50/share in value.

[wabuffo]

Virgin Australia has had a loyalty unit for a long time and sold 35% of it to Hong Kong-based Affinity group ... they will buy back the 34.82% interest for 700M (AUD), which corresponds to a 14-15x EBITDA multiple and about 200 AUD per member.

 

In the last 12 months, PLM has reported an adjusted EBITDA of 83M (USD)... from a cash flow point of view, both entities appear comparable.

 

I took a look at this transaction and dug out some financials for Velocity from Virgin Australia's annual report disclosures.  While both businesses are frequent flyer loyalty business, it looks to me that the Virgin/Velocity business generates higher free cash flow profit margins and this can be seen from its cash generation.  In addition, the current assets reflect what looks like a sizeable cash asset that I think forces one to reduce the headline price paid for the business.  Bottom line I think this transaction equates to a $650m USD value for PLM - which puts AIM's stake at around $320m USD.  That's higher than I had in my model - but probably would be a disappointment for the activists.

 

Here's my model - please feel free to comment, criticize.  There's some assumptions here simply because the published financials aren't detailed enough - its sensitive to one's estimate of cash flows and the cash flow numbers from both entities require a few assumptions that could be wrong.

 

wabuffo

 

[Homestead31]

not sure i would agree with using the same multiple applied to 3 year average FCF when Virgin Austrlia grew revenue 10% over 3 years and PLM grew revenue at 50% over 3 years.  In fact, i would say that is entirely inappropriate, especially given the operating leverage in the business. 

 

In fact, given that FCF at Virgin Austrlia has declined by 17% over the last 3 years, one could argue that the 9.4x multiple is low, and that since FCF at PLM has grown 450% over the last 3 years PLM deserves a premium.  If not a premium at the very least the 9.4x multiple should not be applied to a 3 year average that has inflected so massively.  I would note that 9.4x 2018 FCF implies a value north of $1B. Now maybe FCF comes down a bit given the economic situation at Mexico, but even if you ding them for that, i think your model is way off.  Remember, the numbers by themselves mean nothing.  you have to think about what they mean, and it should be obvious that 50% top line growth and 450% FCF growth is better than 10% top line growth and shrinking FCF.

[movys]

Virgin Australia has had a loyalty unit for a long time and sold 35% of it to Hong Kong-based Affinity group ... they will buy back the 34.82% interest for 700M (AUD), which corresponds to a 14-15x EBITDA multiple and about 200 AUD per member.

 

In the last 12 months, PLM has reported an adjusted EBITDA of 83M (USD)... from a cash flow point of view, both entities appear comparable.

 

I took a look at this transaction and dug out some financials for Velocity from Virgin Australia's annual report disclosures.  While both businesses are frequent flyer loyalty business, it looks to me that the Virgin/Velocity business generates higher free cash flow profit margins and this can be seen from its cash generation.  In addition, the current assets reflect what looks like a sizeable cash asset that I think forces one to reduce the headline price paid for the business.  Bottom line I think this transaction equates to a $650m USD value for PLM - which puts AIM's stake at around $320m USD.  That's higher than I had in my model - but probably would be a disappointment for the activists.

 

Here's my model - please feel free to comment, criticize.  There's some assumptions here simply because the published financials aren't detailed enough - its sensitive to one's estimate of cash flows and the cash flow numbers from both entities require a few assumptions that could be wrong.

 

wabuffo

 

 

Value depends on what happens in the future, not the past, and when ascribing multiples investors are forward-looking.  Using a 3-year average FCF number only makes sense if you think it is representative of the normalized FCF profile of the business going forward.

[wabuffo]

Good comments - I would take revenue numbers (and growth rates) with a grain of salt.  PLM in particular changed its breakage assumptions in 2018 which affected reported revenue and deferred revenue.  I'm not sure I got the cash revenues right for 2018 - and thus, may have overestimated cash flow for that year.  In fact, I'm pretty sure I overestimated free cash flow.  So sure - you could put a higher multiple, but you may have to reduce the estimate of free cash flow on which you are slapping that multiple.

 

In the end, I have no idea if PLM is worth $300m, $500m - but I'm pretty sure its not worth $1B which Mittleman and other activists have thrown around.  I think investors should always try to do their own homework in order to make comparison benchmarks more apples-to-apples.

 

wabuffo

[Cigarbutt]

...

In the end, I have no idea if PLM is worth $300m, $500m - but I'm pretty sure its not worth $1B which Mittleman and other activists have thrown around.  I think investors should always try to do their own homework in order to make comparison benchmarks more apples-to-apples.

 

wabuffo

When submitting #535 above, I had prepared a similar table but was too lazy to include it. Your last posts help to learn what a good contribution really is.

The goal remains to kill the thesis and the big issues for PLM are contractual and related to AeroMexico's negotiating attitude to the outcome but, from a valuation standpoint, up tp Q2 2019 at least, PLM has attributes that are comparable or better than Velocity.

 

Velocity has grown but it is the #2 airline loyalty in Australia, behind Qantas. Velocity has been catching up (number of members) and profitability margins are slightly better but Velocity's revenue per member (engagement) remains way less. Club Premier is #1 with no close competitor (as far as I can tell and assuming Delta does not transfer their loyalty expertise there) in a growing market.

 

The FCF estimates are difficult to validate given disclosures and you may want to incorporate earlier years. In the last 5 to 6 years, growth in gross billings, growth in members and cashflow margins have been comparable. Around 2014-5, Velocity recruited BP as a retailer and this had a massive effect on accumulation and redemption, explaining the bump in revenues and EBIT and the relative plateau reached lately.

 

On the comment about Velocity being cash-rich, disclosures are limited and PLM has a different current and non-current asset profile but Velocity seems to carry more float versus redemption liabilities. However, I think that your calculations suffer from a certain amount of double counting because their non-current liabilities corresponds to debt (unlike PLM). In 2015, Velocity entered into a syndicated facility agreement of 225.0M, with a 5.3% rate per annum. This then became labeled as a bank loan and is due for renewal in 2020. You may subtract the 225M from the excess cash that you describe in order to come up with a sales multiple versus enterprise value.

 

Virgin Australia offered the minority interest because they needed the cash and now have to go to the junk bond market in order to buy it back at a much higher price. There is a price to pay to share the fun. It would be nice if somehow AeroMexico would be forced to pay its share. It would be ironic if AeroMexico would need to go to the debt market in order to buy the rest of PLM (and paying a fair price) after having reported that it's a poor business with governance issues. But markets have short memories.

 

[wabuffo]

However, I think that your calculations suffer from a certain amount of double counting because their non-current liabilities corresponds to debt (unlike PLM).

 

Hey CB - thanks for the critique.  I did not include the non-current liabilities and missed the debt.  But I also did not include what appears to be a note receivable asset of $150m that came out of cash in 2018.  So overall not quite a wash - perhaps $75m deduction to get to net cash.

 

As to the differing growth profiles, those are fair points.  Without detailed financials - we're left to guess at a lot of the key variables for valuation.

 

Q3 earnings call should be interesting.  I'm sure they won't say anything about the coming board meeting - but you never know.  I see Mittleman has a press release out this morning containing their statement about the upcoming shareholder vote.

 

wabuffo

[Pref User]

Haven't been on here in a while but Wabuffo there are two qualitative factors that should also be considered in the valuation. First Virgin Australia is made up of 4-5 major equity owners who own 90% of the company. I don't know if each one wants to take over the company or if they are all looking to sell so they can all get a liquidity event and exit. If they are looking to sell it might have been easier for them to remove one of the new cooks from the kitchen (Affinity), as whoever would buy out the entire company would then have to deal with Affinity. Affinity would have known this and used this as leverage for a higher price. Second, looking through the executive equity compensation for the loyalty unit it was all tied to what price Affinity was bought out at, the old Charlie Munger " Show me the incentives, I'll show you the outcome". So the people who were probably in charge negotiating the deal were not incentivized to get it at a steal.

 

On the financial side, I didn't do as deep as a dive as you did. I do not know if your FCF number includes the non-controlling interest payment or not, just going to say it doesn't include the payout. If that is the case then once the convertible bond went to equity I would assume they get 35% of the FCF so 48.3M. The decision may have simply come down to capital structure arbitrage if we can get debt even if its expensive will our FCF be better off. So quick math using the tax rate of 16.2% in 2019 I quickly calculate that as long as the debt does not cost over 8.23% then the Airline is better off.(Just an update checked and the longest term bond for Virgina Austalia has a YTM of 6.55%, using that number 2019 FCF would be 11% higher using the debt then giving equity to Affinity)  S&P even came out and said the new debt would not affect the credit rating and that the business could handle it. I don't know if it is better off in the long run, and who knows if management is thinking that far ahead.

 

We don't know how PLM's management is compensated or at least I haven't found anything yet, and Aeromexico doesn't have the too many cooks in the kitchen issue. So I personally find it really hard to make an apple to apple comparison. As we have already seen Aeromexico has made low ball offers in the past, so they are clearly trying to get the asset at the right price.

 

I was reminded this week of a great quote, investors need to be able to clarify the difference between "what should happen and what will happen".

[Cigarbutt]

Here are some soft inputs to perhaps marginally help differentiate "what should happen and what will happen".

 

-Aeromexico Q3 results are out. The absence of comments about PLM is interesting in comparison to the unveiled threat released in Q2. Also, from limited disclosure, the air traffic liability increase (with its positive effect on CFO) which includes the loyalty component on top of the seasonal accrual effect, seems to be strong. It will be interesting to see how PLM has performed in Q3.

https://aeromexico.com/cms/sites/default/files/Aeromexico_3Q19.pdf

 

-Earlier in the year, Aimia defined its new strategy with a certain sense of urgency in a loyalty world apparently full of accretive opportunities. As of now, nothing has panned out and I see this as a positive. We'll now more next Monday when they report.

 

-Insider activity has been very quiet lately.

 

-Cardlytics just released a 13G form which reveals that Aimia's stake is down from 1,478M shares (6.47%) announced by Aimia and reported by Cardlytics at the end of August, to 1,098M (4.52%). This seems to represent the last SEC notification (below 5%). It appears that Aimia can gradually dispose of its remaining stake without much noise.

https://www.sec.gov/Archives/edgar/data/1666071/000119312519271582/d823323dsc13g.htm

 

-Also, Club Premier does not seem to behave like a runoff entity as it is recruiting new partners:

https://www.businesswire.com/news/home/20191021005514/en/Citi-Adds-Club-Premier-Aeromexico-Vast-Suite

 

It's all soft evidence but, at least, IMO, it's pointing in the right direction.

[wabuffo]

https://corp.aimia.com/news/

 

Q3 "Results" are out. 

 

They sold 100% of their Cardlytics stake while they execute their "strategic plan" on which they are making "excellent progress" by continuing to light money on fire.  8)

 

wabuffo

 

[Homestead31]

the fact that they didn't announce a major acquisition - and lets hope they don't on the call in 45 minutes - is a major positive.  that is the biggest risk here... that the existing board does something stupid before the meeting on January 24th.

[Cigarbutt]

https://corp.aimia.com/news/

 

Q3 "Results" are out. 

 

They sold 100% of their Cardlytics stake while they execute their "strategic plan" on which they are making "excellent progress" by continuing to light money on fire.  8)

 

wabuffo

 

Some pre post-mortem work on the Cardlytics stake here.

1-The bozo take: the selling of shares put pressure on the price and now that CDLX report results that the Market will really like, it will be painful to calculate the value lost through ill-timed sales.

2-An alternative take: despite high growth that looks promising, selling the stake in chunks seems like a reasonable move, under the circumstances.

Note: I don't really understand the economics behind what CDLX is selling but its capital structure compared to its peers is very unusual: no debt and a large amount of cash sitting on its books.

[wabuffo]

https://finance.yahoo.com/quote/CDLX?p=CDLX&.tsrc=fin-srch

 

CB - I'd go with the bozo take.  LOL!  CDLX +36.5% today.  Sell low and buy high.

 

wabuffo