I've just got a permission to share a full GS Research Report.
Destiny Media Technologies, Inc. (DSY-V) - Checks Reaffirm Value Proposition - Play MPE Offers Valuation Backstop
Channel Checks reaffirm thesis. Play MPE offers valuation backstop.
Checks Positive. We added Destiny Media to our Technology/Special Situations watch list earlier this month and over the past few weeks we had the opportunity to speak to a few industry contacts as well as a couple of Destiny’s Play MPE customers. Our checks reaffirm our thesis on Destiny – the Company’s patent protected solutions have the potential to be highly disruptive and the Company could emerge as a key player in several high growth segments of the rapidly growing digital content market.
Play MPE Offers Valuation Backstop. Going forward Play MPE has two favorable cash flow and valuation drivers: (i) Strong potential for market share growth from standardized contracts with key clients; and, (ii) No significant additional research & development (R&D) expenses. Given its patent protection, virtual monopoly in the high end of the market (Universal/EMI, Warner, Sony etc.) and growth potential, on a standalone basis, Play MPE, based on recent acquisition multiples, should be worth 10x-20x cash flow per share or $1.50-$3.00.
Clipstream is Embedded Optionality. If Clipstream gains traction and is able to achieve market penetration of 6%-15% in a three-year time frame, the current discounted value per share of Clipstream could range between $3.50-$12.00. We have assumed a 25%-35% EBITDA margin on this revenue stream, as well as an 8.0x multiple. We note that Clipstream is in the process of being commercialized and at this time the value of this revenue stream should be treated as an "option value".
Shakeout before the Breakout last few weeks. M/M trio of #$%$ brings it down this kind of organized takedown is done by 3 or more so that it doesn't readily appear as a ping pong match. This kind of shakedown is done by collusion over the phone. They need inventory in a bad way they shorted up higher and covering now and into net long position.
Yeah, and after years of research the Commission concluded that The Gang Of Three colluded and conspire to push Humpdy Dumpdy off the wall. He did not fall on his own. Obviously, I disagree with you on these conspiracy theories about the magic powers and ulterior motives of MM's, but we sure were taken to the cleaners on AUTH, weren't we! That wasn't MMs though, That was management selling us down the river.. Today's MMs are as likely to be computers as humans, and on a stock like DSNY price is easily moved by relatively minor amounts of buying or selling, and once the movement is identified, then there's this mountain of number crunchers around who are waiting to jump on any trend in any direction, magnifying moves and actually decreasing market stability instead of increasing liquidity... It's fascinating. Could these fact open the door to manipulation? Well sure, but It's just as likely or more likely to be a computer or a trend jumper buying through a MM as it is to be the ever evil MM himself.. That's my story and I'm sticking to it.....
I listened to the presentation. Mr. Vestergard seems like a very thorough, conservative and precise CEO. I really like how he has down played the company and products "until it was ready" . The one question that was asked in the room regarding their balance sheet and protecting the company by adding reserves was important. The person said they needed to beef up reserves because some big player could just tie them up in court (unrighteously) to hamper their progress. Lawsuit happy Apple comes to my mind. So Steve said that they have been approached was the term i think he used about a secondary stock offering to accomplish this. Now I don't think this would have a big impact on Shareholder equity because there is no cash burn at DSNY they are funding development from current revs. it sounded like Steve said he knows he needs to do this also to meet minimum capital requirements for the NASDAQ listing. He said they hoped to wait till after the Clipstream launch. I think this topic was the only thing holding back the share price the last couple weeks. Now that the elephant is in the room so to speak perhaps the stock will start moving again. And if there is a pull back I will add to my position. I think whoever they are working with on this will keep the price above $2. It needs to trade above that for 4 months for the NASDAQ listing also.
Thanks for your posts. I really like this company and think it will become the industry standard.