March 2020 Stifel Broker Note - INITIAL Buy Rating @ 8.5p

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ra23
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Re: March 2020 Stifel Broker Note - INITIAL Buy Rating @ 8.5p

Post by ra23 »

Couple of new advisors in the broker note that I haven't previously heard mentioned.



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MGXYZ
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Re: March 2020 Stifel Broker Note - INITIAL Buy Rating @ 8.5p

Post by MGXYZ »

Bidstack sells advertising on an industry standard cost per thousand advertising impressions model (CPM), taking a commission (20-40%) on each advertising dollar placed. Figure 20 illustrates how revenues are calculated. Revenues are recognised at the time the advert is served and collected from agencies within 45-60 days, after which time it retains its share and passes the balance to the games publisher.



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MGXYZ
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Re: March 2020 Stifel Broker Note - INITIAL Buy Rating @ 8.5p

Post by MGXYZ »

Finished.

Thoughts?

I though reasonably balanced, tempered forecast that looks more than achievable this time round. Wish it was approached in a more conservative manner last year.

Nothing new but a lot confirmed and written in black and white.

We go again.



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Re: March 2020 Stifel Broker Note - INITIAL Buy Rating @ 8.5p

Post by Cramond11 »

Near term, our bigger focus is on games and daily active users (DAUs). Bidstack currently has around
100k DAUs live. Management is in the testing phase for titles, which it believes together could add 25-
30m DAUs over the next two years. Games companies are very guarded with user data, but for context,

the popular freemium titles Fortnite and PUBG are reported to have 20-30m DAUs each. A major paid-
for title like EA’s FIFA attracts ~10m DAUs.
I am bit disappointed to see that we can only add 30m DAUs over the next two years if one game Fortnite alone has 20-30m DAUs, thoughts?



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Re: March 2020 Stifel Broker Note - INITIAL Buy Rating @ 8.5p

Post by Bradleybear »

Got to start somewhere



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Re: March 2020 Stifel Broker Note - INITIAL Buy Rating @ 8.5p

Post by hopeabound »

Missed a bunch no doubt but my take on it in simplified thoughts is:

The potential is huge but also high risk. (We knew that)

We all know it is a new ad category.

We all know this is going to take time to reach fruition.

We knew funding was required.

Pity coronavirus meant a delay to completing a title this month (everyone if impacted so...)

Happy to see we are in talks with 35 titles - this is after all, the revenue streams.

Happy to see we are on the cusp of proper commercialising of the product and that a big game is involved, which will have big material benefit.

Happy to see how revenue works.

First mover advantage appears to be intact.

The strategic merit for an acquisition is clear.

Expect there to be hesitancy from:
Short-term holders
Until funding is sorted
Until revenue games are announced

The path appears to be clear.
First prove it can work (tick)
Prove it can be protected (tick)
Prove it can work nicely within games (tick)
Prove it can be commercialised (getting there)
Commercialise it and build revenue (later this year)
Cement revenue and accelerate it (2021)
Sell company

I think with the team they have, there is the best possible chance of making this work.

'However, were we to assume that if even 10% of this inventory were suitable for the native DIGA
format, this could represent a market opportunity close to a billion dollars.'



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mike
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Re: March 2020 Stifel Broker Note - INITIAL Buy Rating @ 8.5p

Post by mike »

Another notable point is that they plan on doubling headcount over the next 2 years. Funding wise it reads as if they need 6 million with at least an initial raise required for June, and that raise seems to take into account the headcount increase.

Personally, I hope that they don't raise all of this in one go at these prices and scale up over time. I'd also hope that they don't go and raise more than they need.

A lot of the numbers do seem very conservative regards to the potential and I'm very much hoping that this is just the broker being overly cautious. A case of under promise and over deliver. Perhaps what should have happened last year.

Bear in mind that the Broker Note is mainly aimed at getting new investment and attracting the right types of people to Bidstack



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Re: March 2020 Stifel Broker Note - INITIAL Buy Rating @ 8.5p

Post by MGXYZ »

My advice to Bids would be to raise what you need to get to Dec 2020 at this price point.

Get your AAA games over the line.

Be more open with game sign ups (check IMMO for a good example of how to set market targets and achieve them).

Smash end of year revenues targets this time.

Raise again at the end of the year once delivered on current targets.

No need to increase Bidstack's cash safety buffer for 18-24 months at our expense.



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Re: March 2020 Stifel Broker Note - INITIAL Buy Rating @ 8.5p

Post by lukehold »

I am bit disappointed to see that we can only add 30m DAUs over the next two years if one game Fortnite alone has 20-30m DAUs, thoughts?
I’d be over the moon with that.. 30 million daily active users. That’s 3x FIFA’s. Any thoughts on the valuation if that is achieved and filled with ads..



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Re: March 2020 Stifel Broker Note - INITIAL Buy Rating @ 8.5p

Post by Cramond11 »

lukehold wrote:
Wed Mar 11, 2020 4:20 pm
I am bit disappointed to see that we can only add 30m DAUs over the next two years if one game Fortnite alone has 20-30m DAUs, thoughts?
I’d be over the moon with that.. 30 million daily active users. That’s 3x FIFA’s. Any thoughts on the valuation if that is achieved and filled with ads..
My reading is that games like Fortnite & FIFA won't get onboard with bids as we all hoped, but by doing some simple maths, 30m DAUs should do us well with reasonable fillrate.



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