Spark Ventures Share Discussion Threads

[markie7] 27/8/2013 16:24

Ok, so Open x needs to go to market at around $380m mkt cap to justify that valuation. Worth keeping an eye on.

[markie7] 27/8/2013 16:22

That is a massive massive lease then......

[smithie6] 27/8/2013 15:35

they lease a prop. in London...and only partly occupied....

(SPK...not for me btw....is it or has it been run for benefit of share holders or the investment managers ??)

[markie7] 27/8/2013 12:55

Good spot. Anyone know what % of OpenX we hold? Is valued at 5m currently.

Also,anyone know what the 2m property costs are in this business? Seem very high for a holding company? Part of the history perhaps?

[capt bligh] 27/8/2013 11:25

Pasadena-based online advertising technology provider OpenX has bolstered its board of directors, saying today that it has named Howard Hochhauser to its board. Howard Hochhauser is the current Chief Financial Officer and Chief Operating Officer of Ancestry.com. OpenX said that Hochhauser led Ancestry.com's successful $100M IPO and two $100M follow-on-offerings. Hochhauser also had served as CFO of Martha Stewart Living Omnimedia. The new board appointment comes as many in the local industry anticipate that OpenX is on the brink of filing for an IPO. OpenX develops advertising serving software, used by Internet publishers to serve up online ads to visitors. The company is venture backed by Accel Partners, Index Ventures, SAP Ventures, and Samsung Venture Investment Corporation.

[capt bligh] 22/8/2013 08:19

Overwhelming market leadership probably counts for something... But I am pretty much in the dark as to it's value.....read back in the thread a peer has sold for a huge number.


Mendeley.com Alexa global rank 35,528
Academia.edu ditto 2505


This is Richard Price October 31 2012: sounds pretty wishy washy to me

I understand you've raised about seven million dollars from investors so far, but I suppose that won't last forever (and that they're expecting a return for their investment...). What is the company's business model?

The goal is to provide trending research data to R&D institutions that can improve the quality of their decisions by 10-20%. The kind of algorithm that R&D companies are looking for is a 'trending papers' algorithm, analogous to Twitter's trending topics algorithm. A trending papers algorithm would tell an R&D company which are the most impactful papers in a given research area in the last 24 hours, 7 days, 30 days, or any time period. Historically it's been very difficult to get this kind of data. Scientists have printed papers out, and read them in their labs in un-trackable ways. As scientific activity is moving online, it's becoming easier to track which papers are getting more attention from the top scientists.

There is also an opportunity to make a large economic impact. Around $1 trillion a year is spent on R&D globally: about $200 billion in the academic sector, and about $800 billion in the private sector (pharmaceutical companies, and other R&D companies).

[pldazzle] 22/8/2013 07:26

capt bligh

On 21/12/12, post 475, you wrote that Academia had 2,011,000 subscribers. This morning's figure is 4,011,000 (comfortably beating 'end of the weekend'!) so usership has effectively doubled in eight months. Great. Shame it doesn't seem to be monetised (one wonders how interesting, if at all, SPK's holding would be to buyers).

[capt bligh] 21/8/2013 15:59

Academia will be well past 4million users by the end of the weekend... sign ups accelerating.

[johnstonp] 21/8/2013 15:34

jlo10 - many thanks for the post
SPK now my biggest investment and you have filled me with more confidence now

[jlo10] 21/8/2013 15:05

Sorry to bore everyone with more minutiae

LOS ANGELES - OpenX Technologies, Inc. (OpenX), a global leader in digital and mobile advertising technology, today announced it has been ranked number 224 by Inc. magazine (Inc.) on the annual Inc. 500 list of the fastest-growing private companies in America. The annual Inc. list features privately held companies that have demonstrated strong growth in recent years and are considered the best run, most innovative and most inspiring. The full list was published today on Inc.com and in the September issue of the publication's print edition.

"For 32 years, Inc. has welcomed the fastest-growing companies in America into a very exclusive club," commented Eric Schurenberg, editor in chief, Inc. "Make no mistake: The club is more exclusive this year than ever in its history."

"We are honored to receive this significant recognition as we aim to fulfill our vision of unleashing the full economic potential of digital media companies," said Tim Cadogan, chief executive officer, OpenX. "The Inc. 500 list identifies America's exceptional private companies and OpenX's inclusion is confirmation of our strong growth and future potential. We're thrilled with the progress we've made building one of the world's most comprehensive ad revenue platforms, the success and value we have provided to our customers globally and, most of all, the massive opportunities that lie ahead."

OpenX's products enable digital media companies to maximize their ad revenue on any digitally connected screen. The Company has grown very rapidly achieving $154 million in revenue last year. In February 2013, the Company closed its Series E funding round led by Samsung Venture Investment Corporation, which was joined as a new investor by Dentsu Inc. digital subsidiary cyber communications, inc. With its latest round, OpenX has now raised more than $75 million from the venture arm of the world's largest mobile device and electronics manufacturer (Samsung Venture Investment Corporation), the venture arm of one of the world's leading Enterprise software manufacturers (SAP Ventures), and leading U.S. and European venture capital firms, including Accel Partners and Index Ventures.

A key driver of OpenX's growth has been the global adoption of its digital monetization platform, which combines a pioneering Real-Time Bidding (RTB) exchange and a Supply Side Platform. OpenX was one of the first proponents of RTB and is now one of its leading providers: OpenX Ad Exchange now processes more than one million bids per second at peak and 96 percent of the nation's leading advertisers participate in the marketplace. Moving forward, OpenX plans to focus on additional M&A activity, international expansion and broadening adoption of its digital revenue platform.

Read more here: hxxp://www.heraldonline.com/2013/08/20/5133149/inc-magazine-names-openx-to-annual.html#storylink=cpy

[jlo10] 20/8/2013 14:06

Has to be good for Mind Candy

The Moshi train rumbles on. Next stop: Hollywood.

Mind Candy has announced that the first Moshi Monsters feature film is heading to cinemas in the UK and Ireland this December.

This animated film will see Katsuma, Poppet and other familiar monsters trying to recover an ancient Moshling egg that has been stolen by Moshi baddie Dr Strangeglove.

It will being made in collaboration with Universal Studios and will debut on December 20th.

"We're excited to launch the first ever Moshi Monsters movie," said Mind Candy CEO Michael Acton Smith.

"This is our first foray into movies and Universal brings the expertise needed to ensure the best possible success. We can't wait for Moshi to hit the big screen."

The online kids phenomenon has more than 80m registered users, and its merchandise empire includes toys, books, magazines and, of course, video games.

[johnstonp] 14/8/2013 16:11

topped up again at 11.6p
a bargain

[capt bligh] 09/8/2013 11:27

bought some for the isa....took ages to fill the order, not much stock around here.

[jlo10] 06/8/2013 20:45

Not a clue really
But if Mendeley was recently purchased at £20 a user equivalent then Academia would be valued at £77m (3850000 x £20) and Spark's 8% would be worth £6.16m

Not quite sure how Mendeley and Academia compare (need to research) but hopeful that it's worth more than the £924k in the accounts

Apologies if nonsense

[james dean] 06/8/2013 20:06

A goodly amount I hope.

Regards.

DYOR

[capt bligh] 06/8/2013 10:15

Academia, worlds most populated academic site, doubled users in eight months, we could anticipate at least 5 mill users before Jan 2014.

What is it worth?

[capt bligh] 02/8/2013 16:05

One for your isa perhaps?

[stemis] 29/7/2013 14:48

Poor analysis. In his first three paragraphs Thompson seems oblivious, or maybe just forgets to mention, that 2p of the 15.1p doesn't belong to shareholders. So his 10.9p of investments is only 8.9p and his discount of 30% is only 15%.

That the shares are worth 13p is a self evident truth if you accept the adjusted NAV of 13.1p. Of course that doesn't include any wind up costs or time vale of money.

[warrensearle] 29/7/2013 12:53

From IC today

Sparking a re-rating

Full-year results from Aim-traded investment company Spark Ventures (SPK: 11.75p) have beaten my estimates by a large margin after the company boosted net asset value per share by 12 per cent to 15.1p a share. This was after adjusting for a 2.5p capital return through the issue of 'B' and 'C' shares in January. For good measure, Spark has announced yet another capital return of "at least 2p a share" through the issue of 'D' shares after the forthcoming annual meeting. Moreover, having analysed the company's investment performance in quite some detail, we can expect further large significant cash returns over the next year, too.

That's because after the March year-end Spark sold 65 per cent of its stake in Kobalt, one of the world's leading music publishers, for £10m. This disposal not only resulted in a revaluation of the holding from £8.9m to £15.5m in Spark's accounts, but also means that the residual stake is still worth £5.5m, or 1.4p a share. To put the deal into some perspective, Spark has 410m shares in issue net of 40m shares held in Treasury, so the £10m share sale brings in 2.4p a share of cash.

At the end of March, Spark also held £3.6m of cash on its balance sheet and this will be bolstered by a further £3.6m, or 0.9p a share, in January when the company receives the outstanding consideration following the sale of semiconductor business Aspex to Ericsson. In other words, the current share price of 11.75p is in effect backed by 4.2p of cash or cash equivalents. Strip that cash out and it means that investments worth 10.9p a share are being attributed a value of only 7.55p - a hefty 30 per cent below their carrying value.

Unwarranted discounted to sum-of-the-parts valuation

Clearly, a discount of that order would be fully justified if Spark's investment portfolio was underperforming. However, this is not the case as the company has doubled the carrying value of its investment in California-based OpenX, a business that has developed a free open source ad server trusted by more than 30,000 web publishers in over 100 countries around the world. OpenX is now developing a set of tools to help publishers make more money from their web presence and is backed by financing from leading venture capitalists including Accel Partners. Sales growth has been robust, with trailing 12-month revenue figures "significantly in excess of $100m (£65m) and, for the second year running, revenues are over two and a half times the level for the equivalent period 12 months ago". Spark's holding in OpenX is now worth £5m, a valuation in line with a recently concluded funding round from Samsung and Dentsu (a Japanese advertising company).

There is also upside potential in Spark's stake in Mind Candy, the company behind Moshimonsters, one of the world's leading developers of social multi-player children's games. In the last financial year, Mind Candy's revenues were up 125 per cent and profits trebled. However, Spark's investment in Mind Candy is still only being valued in its accounts at £3.2m, in line with the price received when Spark sold half of its stake two years ago. That looks a conservative valuation.

Spark's stake in Notonthehighstreet.com, an internet marketplace for over almost 3,000 specialised UK-based businesses selling a wide variety of unique products, also looks conservatively priced at £10.2m, the valuation used at the time of a funding round in May 2012 when Spark sold 7 per cent of its holding to fund manager Fidelity. Notonthehighstreet's revenues surged 66 per cent to £45m last year and the company is "on course to deliver 50 per cent revenue growth this year". That's well ahead of budget.

The largest investment is a £16.2m holding in IMImobile, a highly-profitable provider of the technology infrastructure for mobile data, voice and video services to mobile telecom operators and media companies. This has been revalued up by £300,000, reflecting the fact that both revenues and cash profits rose in double digits in the year to the end of March. That wasn't a one-off, either, as cash profits have risen by a compound rate of 30 per cent over the past three years.

As a result of strong operational performances by investee companies, Spark's portfolio actually edged up in value in the 12 months to the end of March to £59.1m even though the company made disposals of £8.7m. That's not the type of investment performance that warrants the company being valued on a 30 per cent discount to the underlying value of its assets net of cash.

Target price

I initially recommended buying Spark's shares at 7p ('The spark for a re-rating', 10 Jul 2012) and repeated the advice four months later when the share price had drifted down to 8.75p ('Time to spark a re-rating', 8 Nov 2012). These buy-in prices have been adjusted for the 2.5p a share issue of 'B' and 'C' shares in January. Ahead of last week's full-year results I also reiterated the investment case at 11p ('Awaiting another spark for a re-rating', 9 May 2013).

Interestingly, Spark's shares are closing in once again on a 12-year high of 12.4p. In my view, a move above this level looks firmly on the cards given the imminent cash return, potential for further investment gains on the portfolio and disposals that in turn would lead to additional capital returns. Realistically, a share price around 13p is fairer value. On a bid-offer spread of 11p to 11.75p, the shares rate a buy.

[markie7] 29/7/2013 12:18

Simon Thompson just reiterated this - with 13p target price

[stemis] 28/7/2013 20:30

Overall I think the share price has got ahead of itself here and there is better value in other breakups. I can understand some holders just hanging on trusting management to deliver increased value prior to sale of the remaining investments. But that's what this they are doing, lets not fool ourselves. Just on value metrics this isn't attractive.

[stemis] 28/7/2013 20:26

Okay I've checked back with the online IC. The comment by Simon Thompson that "a total distribution to shareholders of at least 14.25p a share, or £54.8m, looks realistic" is from the Dec 21, 2012 edition of IC. So shareholders have already had 2.5p of that with the distribution agreed at the 18 January 2013 General Meeting! That means there's only 11.75p of Mr Thompson's "total distribution" left. Not that attractive when the share price is currently 11.375p mid. People need to check their figures before just quoting past comments.....

[jlo10] 28/7/2013 20:26

Yes sorry
I only read half the note
Seems outrageous

[stemis] 28/7/2013 20:09

No, you are missing the fact that (as disclosed in note 4) £26.6 m has already been returned to shareholders. So the calculation is

£57.5 m - £45.1 m = £12.4 m x 15% = £1.86 m
Plus
£61.8 m + £26.6 m - £57.5 m = £30.9 m x 20% = £6.18 m

Gives £8.04 which is 2.0 p per share, leaving 13.1 p for shareholders (out of 15.1 p). Don't take my word for it though. The figure is disclosed in the accounts at the bottom of the balance sheet as adjusted NAV per ordinary share - see note 4. Would be interested to know where the IC get their 14.25 p.