ZDGE - Zedge, Inc.

[DonFanucci]

Zedge is a wallpaper/ringtone/customization app with 32mm monthly active users. It was one of the many businesses spun out of IDT and now trades standalone. Does anyone else own this? The more I think about it, the more I like it. It seems like there are many ways to win. Per some comments they made on their Facebook page, it sounds like they will be releasing a version with a ringtone workaround for iOS in the next few months.

[InelegantInvestor]

I agree that Zedge is interesting(http://www.stockspinoffs.com/2016/05/27/living-zedge-small-idt-spinoff-big-potential/).

It is quite cheap if you value it on an MAU(monthly active user) basis, and it's not bad on an earnings basis either.

[ratiman]

This was not confidence inspiring:

 

"Tom has mentioned that a user that chose their phone with content that is strong measure of intent. So, if I’m actually going to download a wallpaper and a ringtone and an app icon around the particular theme, we have a hypothesis that we can extend beyond the handset by selling other merchandise, whether it would be t-shirts with that content, coffee mugs, phone cases and the like."

 

[DonFanucci]

This was not confidence inspiring:

 

"Tom has mentioned that a user that chose their phone with content that is strong measure of intent. So, if I’m actually going to download a wallpaper and a ringtone and an app icon around the particular theme, we have a hypothesis that we can extend beyond the handset by selling other merchandise, whether it would be t-shirts with that content, coffee mugs, phone cases and the like."

 

Well, they do only have $11mm of revenue. And that seems like a sensible strategy to me. You download a Star Wars wallpaper, icon set, and ringtone, you probably are a Star Wars fan who would buy a t-shirt. Plus you left off what they said directly following that: "And the beauty there is that we do not need to take on the operational risk associated with fulfilling and producing all that stuff"

 

And: "I think like we’re definitely not like focusing on heavily chasing new revenue streams at this point."

[BMC34]

Any thoughts on Q4?  The market did not seem to like the results based on share price reaction. 

[Foreign Tuffett]

The market wasn't pleased with delays in their rolling out of new apps and revenue being down Q-over-Q.

[Voodooking]

Thinking about giving this a go, I see there's lots of insider ownership with Howard Jonas buying shares every week and the Kahn Brothers (Irving Kahn's sons) taking a position in it too.

 

Anyone with a bit more experience in Spinoffs think it's worth a go?

[ScottHall]

Thinking about giving this a go, I see there's lots of insider ownership with Howard Jonas buying shares every week and the Kahn Brothers (Irving Kahn's sons) taking a position in it too.

 

Anyone with a bit more experience in Spinoffs think it's worth a go?

 

I think these people are incredibly smart but the company is just too gimmicky for me; I just don't see this being something that most people are likely to spend any real time with. That said, I used to say the same thing about FB before I bought shares. But it's hard for me to understand what need this is serving. I'm not saying it won't do well; it's just totally out of my wheelhouse and I'm not really sure where to begin.

[Voodooking]

I'm *exactly* the same Scott. Most of the companies I invest in make tangible consumer goods like clothes and cars and machinery etc. I don't see why anyone would *need* to change the ringtone on their phone or pay for wallpaper etc. BUT, lots of people do (millions in fact) every single day...

 

I don't *like* it as a buy and hold, just wondering if I should go in for 12 to 18 months and wait for a double or a 3x, then get out?

[Jurgis]

I'm *exactly* the same Scott. Most of the companies I invest in make tangible consumer goods like clothes and cars and machinery etc. I don't see why anyone would *need* to change the ringtone on their phone or pay for wallpaper etc. BUT, lots of people do (millions in fact) every single day...

 

I don't *like* it as a buy and hold, just wondering if I should go in for 12 to 18 months and wait for a double or a 3x, then get out?

 

I just set the ringtone of my phone to a song that comes from my own MP3 library.  ::)

 

OTOH, there are reasons custom ringtones are better even if they are based on the same song. You may not want the beginning of the song as a ringtone, but rather some part of refrain. To do that yourself, you have to cut the song which is more effort than buying a ringtone.

 

Possibly a bit similar with using your own photo as wallpaper.

 

OTOH, I think these markets are rather mature/tired. Not sure there's great future unless the company does some other stuff. I admit, I haven't looked.  8)