TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

Equity Bottom-Up

Meta Platforms (Facebook) / Equity Bottom-Up

<ul>
<li>Meta lowered 2023 expense guide by $5B (or 5%)  to $89bn-$95bn and capex guide by $4B (or 11%) to $30bn-$33bn</li>
<li>Metaverse spending continues, META lost $4.3B on $700M in revenue this quarter and losses are expected to accelerate in 2023. </li>
<li>Zuck said the word efficiency 18x and AI 15x...Evidently, these are his priorities!</li>
</ul>


Meta lowered 2023 expense guide by $5B (or 5%)  to $89bn-$95bn and capex guide by $4B (or 11%) to $30bn-$33bn
Metaverse spending continues, META lost $4.3B on $700M in revenue this quarter and losses are expected to accelerate in 2023. 
Zuck said the word efficiency 18x and AI 15x...Evidently, these are his priorities!


Meta Platforms 4Q22: Zuckerberg Got Religion?

<ul>
<li>Pinterest has rallied 40% over the past 5 months on hopes that its new CEO Bill Ready will pivot the company from a pure advertising model to an ecommerce juggernaut.</li>
<li>Altering what consumers use online platforms for is exceedingly difficult and rarely succeeds: TripAdvisor, Yelp, Groupon, Stitchfix, eBay.</li>
<li>Ultimately, unless Pinterest convinces its users to more frequently utilize the platform, efforts to boost monetization will likely fall flat.</li>
</ul>


Pinterest has rallied 40% over the past 5 months on hopes that its new CEO Bill Ready will pivot the company from a pure advertising model to an ecommerce juggernaut.
Altering what consumers use online platforms for is exceedingly difficult and rarely succeeds: TripAdvisor, Yelp, Groupon, Stitchfix, eBay.
Ultimately, unless Pinterest convinces its users to more frequently utilize the platform, efforts to boost monetization will likely fall flat.


Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Capital Markets

<ul><li>Pinterest’s performance as a stock has been fairly decent in what can be termed as a tumultuous environment for the technology industry.</li><li>The company’s global MAUs of 445 million were higher than in Q3 2021 because it largely overcame the pandemic’s difficulties and increased user engagement.</li><li>During the quarter, they collaborated with Merlin, BMG, Warner Music Group, and Warner Chappell Music to enhance the music experience on Pinterest.</li></ul>

Pinterest’s performance as a stock has been fairly decent in what can be termed as a tumultuous environment for the technology industry.The company’s global MAUs of 445 million were higher than in Q3 2021 because it largely overcame the pandemic’s difficulties and increased user engagement.During the quarter, they collaborated with Merlin, BMG, Warner Music Group, and Warner Chappell Music to enhance the music experience on Pinterest.

Pinterest Inc: New Marketing Campaign & Other Developments

<ul><li>Pinterest gave disappointing financial results this quarter, missing out on revenues and earnings largely due to the weak advertising market.</li><li>While its overall revenues grew despite the macro conditions, the company viewed resilience from its large advertising partners.</li><li>Also, Pinterest saw an opportunity to augment its R&D team with the recruiting market becoming more favorable and an improvement in recruiting execution.</li></ul>

Pinterest gave disappointing financial results this quarter, missing out on revenues and earnings largely due to the weak advertising market.While its overall revenues grew despite the macro conditions, the company viewed resilience from its large advertising partners.Also, Pinterest saw an opportunity to augment its R&D team with the recruiting market becoming more favorable and an improvement in recruiting execution.

Pinterest Inc: Improved User Experience & Other Drivers

<ul>
<li>Snap had yet another earnings related meltdown as management has lost all credibility in forecasting its business. </li>
<li>Because co-founders Spiegel and Murphy have 99.5% voting shares, there is not an opportunity for an activist to fix the situation like Pinterest and Twitter.</li>
<li>The issues plaguing Snap are likely not hurting META as much given a broader ad base, better ROI on its ads, and a mgmt team that has already guided down.</li>
</ul>


Snap had yet another earnings related meltdown as management has lost all credibility in forecasting its business. 
Because co-founders Spiegel and Murphy have 99.5% voting shares, there is not an opportunity for an activist to fix the situation like Pinterest and Twitter.
The issues plaguing Snap are likely not hurting META as much given a broader ad base, better ROI on its ads, and a mgmt team that has already guided down.


United States

Snap Inc. provides technology and social media services. The Company develops mobile camera application products and services that allow users to send and receive photos, drawings, text, and videos. Snap serves customers worldwide.

Match Group, Inc. is a dating service provider. The Company offers diverse portfolio of apps and services which enables connections across the spectrum of age, race, gender, sexual orientation, and backgrounds. Match Group serves customers worldwide.

IAC Inc operates as a holding company. The Company, through its subsidiaries, provides media and Internet services. IAC serves customers worldwide.

EverQuote, Inc. operates as an Internet based marketing firm. The Company, through its platform, enables consumers to connect with auto insurance carriers and agents to meet their auto insurance needs. EverQuote serves customers in the United States.

Charter Communications, Inc. operates as a cable telecommunications company. The Company offers cable broadcasting, internet, voice, and mass media services. Charter Communications serves customers in the United States.

World Wrestling Entertainment, Inc. operates as a media and entertainment company. The Company offers live wrestling events, television programming, music publishing, advertising, licensing, and home video streaming services. World Wrestling distributes its programs worldwide in various languages.

Fox Corporation operates as an entertainment company. The Company produces and licenses news, sports, and entertainment content for distribution through cable television systems, direct broadcast satellite operators, telecommunications companies, and online video distributors. Fox also manages broadcast studios, theaters, editing bays, sound stages, and other production facilities.

Endeavor Group Holdings, Inc. operates as a holding company. The Company, through its subsidiaries, offers entertainment content, as well as specializes in marketing and licensing, representation, and event management. Endeavor Group Holdings serves customers worldwide.

The Trade Desk, Inc. operates as an advertising technology company. The Company offers online advertising platform that manages display, social, mobile, and video advertising campaigns. Trade Desk serves customers worldwide.

Roku, Inc. designs and manufactures consumer electronic products. The Company offers wireless enabled devices that stream audio and video content from the internet to home entertainment systems. Roku serves customers globally.

LY Corporation operates as an internet search engine "Yahoo! JAPAN". The Company provides electronic commerce and settlement finance services for small medium enterprises and individuals. LY also operates media business including search linked advertising and display advertising services.

CAR Group Limited operates as a digital marketplace for vehicles. The Company provides a diversified portfolio of brands to sell and buy cars. CAR Group serves customers worldwide.

Domain Holdings Australia Limited offers multi-platform property solutions. The Company operates an online portal that delivers property marketing solutions for residential, new development, and commercial properties. Domain Holdings Australia serves buyers, sellers, renters, and investors in Australia.

Hello Group Inc. operates as a mobile-based social networking platform. The Company enables users to establish and expand social relationships based on location and interests. Hello Group operates out of the Peoples Republic of China.

New Work SE operates an an online business network. The Company offers social network for business professionals to connect and share ideas, projects, jobs, and advice. New Work serves customers in Europe.

Sea Limited offers information technology services. The Company provides online personal computer and mobile digital content, e-commerce, and payment platforms. Sea serves customers worldwide.

WPP PLC operates a communications services group. The Company provides operations encompass advertising, media investment management, consultancy, public relations, healthcare and specialist communications, and branding and identity services. WPP serves customers worldwide.

Vivendi, through its subsidiaries, conducts operations ranging from music, games and television to film and telecommunications.  The Company provides digital and pay television services, sells music compact discs (CDs), develops and distributes interactive entertainment, and operates mobile and fixed-line telecommunications.

Kabel Deutschland Holding AG, through its subsidiary, is a cable operator. The Company offers its customers analog and digital TV, broadband Internet and fixed line phone services via cable as well mobile services in cooperation with an industry partner.

Kunlun Tech Co., Ltd. offers comprehensive Internet value-added services. The Company focuses on social network interactive and online game fields. Kunlun Tech also provides localized translation outsourcing and agency advertising services.

Pinterest, Inc. operates and maintains social networking site. The Company provides online venue for personal photos, ideas, oddities, decorations, places to visit, recipes, and other items. Pinterest serves customers worldwide.

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Pinterest (PINS US)

Meta Platforms 4Q22: Zuckerberg Got Religion?

Meta is getting credited today with a "phase change" in operating cadence, with a newfound emphasis on efficiency and profitability. Great! But we...

Aaron Gabin

TMT Short Idea: Pinterest

Pinterest has been a sneaky strong TMT long for the past 6 months on hopes its new CEO Bill Ready will deliver the holy grail of ecommerce to the...

Aaron Gabin

Pinterest Inc: New Marketing Campaign & Other Developments

Pinterest’s performance as a stock has been fairly decent in what can be termed as a tumultuous environment for the technology industry. The...

Baptista Research

Pinterest Inc: Improved User Experience & Other Drivers

Pinterest gave disappointing financial results this quarter, missing out on revenues and earnings largely due to the weak advertising...

Baptista Research

Snap 2Q22: Why We Buy Meta

Snap caught 14 downgrades. Astonishing, but deserved for a management team that has no handle on its business. Snap still has a healthy user base...

Aaron Gabin

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