|Shares Out. (in M):||32||P/E||0.0x||0.0x|
|Market Cap (in $M):||192||P/FCF||0.0x||0.0x|
|Net Debt (in $M):||-83||EBIT||0||0|
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Worth ~$11-$15. Severely broken IPO priced at <2x TBV, 0.5x Sales, 1.2x GP and 5.4x U.S. EBITDA (2014E) with 30% growth, high margins, heavy recent insider buying, low float/high short interest, a strong board and high potential for strategic sale to bevy of potential buyers in dynamic, rapidly consolidating industry.
YuMe, Inc. (NYSE: YUME), based in Redwood City, CA, is a fast-growing, leading multi-screen video advertising company whose IPO occurred less than 1 year ago on August 7, 2013. The company’s platform and services, driven by its proprietary, non-cookie based software developer kit (“SDK”) powers its placement quality index which finds the best placement for advertisements to drive attention and campaign performance for clients, whose goal is to reach targeted, TV-sized audiences online. YUME’s technology allows for deep data measurement and analytics, providing its advertisers with a “brand-safe environment” and targeted demographic viewership. YUME also offers a programmatic buying solution called Video Reach, which launched earlier this year to complement the company’s core services.
YUME’s CEO and co-founder Jayant Kadambi describes the company in a nutshell here:
“We go to TV brand advertisers and tell them we can help get their audiences as they’re migrating online. The video infrastructure is very different than the display infrastructure. It’s not just about websites. It’s about mobile, tablets, connected televisions and we believe that it’s a software problem you can solve with data sciences that can really add value to TV brand advertisers.
A buyer might say, for example “I want to buy ‘Glee’ and I’m reaching 10 million people and I want to reach 3 million more.” So we say, “we’ll find you the ‘Glee’ audience online” if you want more frequency, or we’ll find people who haven’t seen “Glee” if you want additional reach. We use data and our survey capabilities to build an audience segment that are or aren’t “Glee” watchers. Our goal here is to make it very simple for TV people.
I’ll give you an analogy. If you think about the TV advertising business today, it’s about advertising on NBC, CBS, ABC, FOX and cable. That’s how they get their audience – through reach, the number of people who saw the ad and frequency, the number of times they see the ad. If we do our jobs well, you’ll see in five years, in addition to how brand advertisers advertise on TV, they’ll advertise on O&O properties: Facebook, Google, Twitter. And they’ll need an equivalent to cable – the run of network, aggregation is far more necessary in the future because of the thousands and thousands of content owners. And we want to be the equivalent of cable – so people will advertise on Google, Yahoo, Facebook and then YuMe as sort of the cable equivalent.”
Why Opportunity Exists
Keys to Thesis
Disclaimer: The author of this idea presently has a long position in securities of this issuer and may trade in and out of these positions without notice. The data contained herein are prepared by the author from publicly available sources and the author's independent research and estimates. No representation or warranty is made as to the accuracy of the data or opinions contained herein.
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