Burst Media Corporation Share Discussion Threads

[vision88] 11/9/2006 23:25

Hear again an expert scam floated on to AIM .

The company is barly afloat ,yet purports A value at over 82p ,lots of dribble and goberly goo to disquise its real intent ,but as you can now all see the scamm has worked and the FSA will no doubt give it its blessing,

Only on aim stocks are you assured of a hassel free scam, but its organized theft that will ultimatly bring down the entire scammy system ,so lets have lots more and see the poxy system colaspe in a true 911 style.

[wiganer] 11/9/2006 16:03

Until the results, we are both guessing about the exact figures.

As you say, not long to wait.

[tiredoldbroker] 11/9/2006 15:56

To use your own phrase on you, do you have any evidence for your guess that they have a stable earnings stream ? Do you have the full document they issued when they were floated for example, with the profit and cash flow record over the last few years ? Do you have any evidence the group includes a "cash cow" ?

It seems odd to me that if they are so stable in earnings terms that all their trading update mentioned was ebitda before share options for this year of USD 2.4m. Still, when the interim figures are published, the situation may become a little clearer. And only one week to wait !

[wiganer] 11/9/2006 14:55

Yes, but the bulk of the business is their long-established core business, which has survived the tech boom/bust and come out the other side with a stable earnings stream. I don't doubt that the newer products are cash burning at present, but it remains to be seen whether they outweight the core "cash cow".

Btw, lest some take the impression away that this is some dodgy start-up, a few company milestones:

2006 The company launches Burst Direct, a division that deploys online campaigns quickly across thousands of sites
2005 The company is named the 11th-fastest growing private company in Massachusetts by the Boston Business Journal; launches AdConductor, a complete ad management system; opens a London office to represent UK Websites and sell directly to UK advertisers and advertising agencies; and introduces a series of behavioral targeting solutions
2004 Burst celebrates its fifth consecutive year of BPA certification
2003 Burst serves 3 billion impressions per month
2002 Burst launches Online Insights, a monthly newsletter featuring original research
2001 Burst is ranked in the top 25 of the Inc. 500
2000 Burst serves more than 1 billion impressions per month, and becomes the first online advertising network to become system certified by BPA Worldwide
1999 Burst offers its first demographic survey to publisher sites
1998 The Burst Network announces the addition of its 1,500th publisher
1996 Forrester Research publishes its inaugural report on Internet Advertising, and concludes that advertising networks will "dominate" ad sales; Burst Media is identified as an early contender in the field

[tiredoldbroker] 11/9/2006 14:12

In the announcement dated 20/7/06 at BRST says "During the first half of the year, the Company has made significant investments in the establishment of Burst Direct and the ongoing development of AdConductor as well as in new sales people and office infrastructure" and "during which time the Company floated on AIM, launched its new division, Burst Direct and significantly increased the size of its staff" and given that sales haven't met expectations, the probability is that the company is burning cash. Unfortunately the company has removed its flotation particulars from its website, so I can't investigate what the position was last year.

[markie7] 11/9/2006 14:05

that american VC really took the institutions to the cleaners here.

wow.

[wiganer] 11/9/2006 13:49

tob

I qualified as a Chartered Accountant in 1991, so know my way around a set of company accounts. I'm fully aware of the fact that profitable companies can have cash burn, just as loss-making companies can be cash-generative.

My point was that you have no evidence for your guess that BRST are cash-burning. For all you know they may be generating cash by the truckload.

My guess (just be clear that that's what both of us are doing, guessing) is that they are probably cash-neutral or thereabouts.

I think you also mischaracterise BRST somewhat as a development-stage company. It has a mature core product which it is seeking to develop and augment with new products. That is somewhat different than the normal interpretation of a development stage company.

[tiredoldbroker] 11/9/2006 13:41

Profitability is not the same thing as cash burn.

To give a very simple example, you might have a company which holds a great deal of physical stock. Let's say spark plugs. The spark plugs cost them £1 each to make and normally sell at £2. But they have 10 million in a warehouse, and a £5m bank overdraft which it wants to eliminate.

So it decides to sell its stock at 50p a time, and raises £5m by doing so. It has lost money on the book value of its stock, but generated cash. The directors may feel that was a better course of action than making more spark plugs at a £1 cost and selling them at the full market price of £2 but carrying a load of debt and a warehouse full of inventory. Cash was generated even if losses were being made.

It is likely that a development-stage company like BRST is spending quite heavily on refining and re-writing the software; it may have a marketing budget which is very large compared to present levels of sales; and it may be needing higher levels of working capital to sustain its business model. But the level of sales it is making - which may not be sufficient to sustain the company in the medium to longer term - may nevertheless be showing a paper profit at the ebitda level, because software often has a vast gross margin. But it could be eating up cash.

Have a look at for one view on this, or or for that matter read the "Difference between Profit and Cash Flow" section at

All we know about BRST's finances is that they forecast an ebitda of maybe USD 2.4m for this calendar year. But they may be making a loss at the attributable level, and they may be suffering negative cash flow.

[wiganer] 11/9/2006 12:48

Why do you assume that a profitable company will have cash burn?

[tiredoldbroker] 11/9/2006 12:46

Pugugly, I'm sure its another of those cases where the underlying technology is interesting, and could actually generate worthwhile revenue one day - but over the last decade there have been so many of these flotations, too early in the product's life cycle, which have lead to investors being stuffed at the wrong price, and then market cynicism after several rounds of bad news - and it does seem to be the case that warnings rarely come just once, so I reckon this is perhaps still too early. Be interesting to see what the cash burn looks like when the figures are published.

[pugugly] 11/9/2006 11:50

TOB:> Thanks for that quick & dirty analysis - Not sure how much is in the valuations for IP - should probably be an impairment charge - Curretnly looking for a good home for my GET funds.

[tiredoldbroker] 11/9/2006 10:19

Youc an see why people might be feeling sore though - floats in April '06 at 82p, only raise £1.96m for the company but the vendors flog £35m of their stock, they make a couple of announcements that make it sound like everything is just fine, then less than 6 months after floating, reveal that financial performance is actually "significantly below current market expectations".

If revenue this calendar year will be USD 24m and EBITDA only USD 2.4m, it suggests a high level of overheads, and at 30p offered the market value is still £25m or so, I can't see that this looks such a bargain when the interim figures may well show a pre-tax loss.

[wiganer] 11/9/2006 10:15

Yes, especially when you consider that the CEO is called Jarvis Coffin!

Anyways, have taken the plunge and bought a few sub-30p.

[isis] 11/9/2006 10:10

Unfortunate name for a stock though. ;-))

[wiganer] 11/9/2006 10:06

Having done a bit of research this looks a good company, and today's fall looks to be a considerable overreaction.

[balcee] 07/8/2006 11:33

BRST will continue to grow and win contracts. A twelve month price target of £2.00 has been set for the sp, with a short term one of £1.15.

A strong buy.