Tremor - TRMR - General Discussion
The stellar results prompted me to start this thread as only a year ago it was most definitely in SCVR territory and I think quite widely held.
I have owned since Dec 2017 and have done more research into this one stock than into any other (because there was for a while a definite whiff of fraud around it).
I am out at the moment so not able to summarise today’s results but will do later.
For those who don’t know Tremor International (LON:TRMR) (and maybe even those that do these are two great Twitter threads on the company:
https://twitter.com/yield_fana...
https://twitter.com/yield_fana...
Disclaimer
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48 comments
Directors themselves in the foot
From recent RNS... Directors SELL more than FinnCap BUYBACK on 22nd & 23rd'
Date_________ Source_____ Type ____Volume
22/12/2022 O. I. Druker SELL 70,208
22/12/2022 Y. Carmi ___SELL 16,282
22/12/2022 Buyback BUY ___30,176
22/12/2022 Market Size OVERALL_______ 657,975
Date_________ Source_____ Type ____Volume
23/12/2022 O. I. Druker SELL___51,758
23/12/2022 Y. Carmi SELL ______31,744
23/12/2022 Buyback BUY______33,984
23/12/2022 Market Size OVERALL ___1,043,546
They made the decision to start the Buybackand immediately began Directors sales. Directors sales follow exchange of options from company which increase issued stock. Buybacks are intended to reduce issued stock. Thet are SHOOTING themselves in the foot and helping destroy share price.
Ideally Sales should take place when growth is or has happened NOT when growth is in Freefall
Directors sales for O. I. Druker, CEO, in the past year come to over $6.5 million. He is very well paid.
From 2021 Accounts at 10 Mar 2022 Druker had 2.96 m shares and 4,22 m options. Those options now number 2,28 m having raised $ 6,075,847. Allegedly to pay tax on a salary of £747,146 and Bonus of £845,205. I don’t have any idea of Israeli Tax rates but that looks weird.
Hi Barrie, do have a look at my exchange below with mojomogoz on 15 November, he makes some good points about the competitive position and the market standard for share-based compensation in this industry. As you will see I share your concern that the buybacks and issue of options are pulling in opposite directions.
On your point "Allegedly to pay tax on a salary of £747,146 and Bonus of £845,205. I don’t have any idea of Israeli Tax rates but that looks weird" the tax to be paid isn't on that salary, it's on the options themselves. They are taxable as salary, otherwise everyone would get paid in shares... You are right that the tax on the CEO's cash salary and bonus would be a lower amount.
I am reluctantly concluding that this is correct advice from mojomogoz "If comp bugs you so much then sell the shares is best...and don't get into situations where this type of comp occurs." Currently still holding and will decide what to do during 2023. I'm unwilling to sell at this share price, for obvious reasons.
Happy New Year and good luck to all holders.
PS Tremor does make me anxious...but I swallow it and persist in it. I think its a great opportunity. My analysis may just be fallible tho...it really isn't for the feint hearted or W&Cs
Everyone's favourite company is presenting at 3.35pm (10.35 EST) at RBC tech conference. Can get here:
https://tremorinternationalltd...
I wasn't happy with the results yesterday. It seems that revenue is in a negative trend. On the call yesterday that was put down to a reduction in ad spend in DTC channel due to macro economic pressures. I had hoped that share based compensation had peaked but the agm is next month and there are resolutions to grant more share options and to reduce the price of current options. This curtails any future benefit to me. Resolutions here:
https://investors.tremorintern...
Hi everyone, I agree with muzmano that the most concerning thing is not so much the economic cycle, which comes and goes, it is the scale of the share-based compensation. This means two things. First, the share buy-backs have little effect on EPS because new shares are issued as fast as they are bought in the market. Second, there is an imbalance in risk/reward between staff and shareholders. The purpose of options is to share in the company's success. If the share price goes down, then both staff and shareholders should be affected. In short, the purpose of options is to align staff and shareholder interests and that is not happening.
None of us can attend the AGM as this is in Israel. We could however write to Neil Jones and Christopher Stibbs (presumably via finnCap) and share our concerns. I am happy to have a go at a draft if people think this is worthwhile?
I agree with the sentiment to some extent...ideally share comp should be lower, in fact people should either found cos or buy in long term as they get promoted and manage them...
However, enough of the romanticism!
1) Tremor's board and major shareholders wont agree
2) Significantly as it would be self-harm
3) Tremor's share comp is arguably modest relative to competitors and recent 'excess' is significantly driven by stellar performance H2 20 to H1 22 by a new mgt team who really changed the direction of the biz from old performance media stuff (that would be walking dead if still the biz focus)
Look at the most successful or best known competitors:
The Trade Desk - its got $23bn market cap! - revenues 9mths ytd of c.$1.1bn and share based comp at $400m
Magnite - $1.45bn market cap - rev 9mths ytd of c.$400m and c.$50m share based comp
Roku - $8.4bn mc - rev 9mth ytd c.$2.3bn and $256m shared based comp
Pubmatic - $876m mc - rev 9mths ytd $182m (I think overstated and need to knock a bit off to get to a Tremor ex TAC comparison) and (only!) $15.2m stock comp
Tremor is $500m mc - 9mths rev of c.$240m and $40m of share based comp
(note the above are in same area but what they offer is all different)
So Pubmatic are the cleanest dirty shirt...with Tremor second? (Note Pubmatic only listed in 2018 so there could be some deferred comp that kicks in? Dunno - perhaps means that current mgt are significant shareholders thro IPO so different comp structure?)
Over last few years Tremor has had the best development in combined terms of revenue growth, profits and real cash generation particularly winning in a profit/cash generation sense relative to competition
If you are a shareholder and genuinely want a better outcome then talk to them about alignment of incentive...but as a shareholder I don't want them to stop the comp...
...now if you could persuade whole of industry to dial it back then I'm game for that.
If comp bugs you so much then sell the shares is best...and don't get into situations where this type of comp occurs.
TBC I would like it not to be like this.
On buybacks, ytd I believe they are at $75m and stock comp is $40m...so there is a positive impact and I believe the only one of the above group...reluctant applause to Tremor?
I'm happy with the buyback in that I think they have done it whilst their shares are significantly to severely undervalued IMO.
So thoughts on todays update and what can we expect for the future. Luckily I sold 50% of holding ages ago at good profit but my remaining holding is umm badly dented by todays SP fall
Hi,
Regarding £TRMR and the buybacks, I see on the RNS feed today that they now have 42 million dormant shares. When a UK based company does buybacks it cancels them in due course, but not in the case of £TRMR. Like most I am quite suspicious (to good to be true!) , so I was wondering under Israeli law could there be any chance of say reclassifying them as ordinary shares and giving them free to the directors? Perhaps at the same point the number of dormant shares equals 50.1% of the total shares in issue?
Theory - Campaign selling short to drive down price collecting stops on the way. DIR's have already sold out (Druker $6M in recent times) large holdings convenient eh, crummy price offered based on the past month (come + 12th DEcember), sale wriggles through, Ofer and his mates get rewarded with new share options in the new business, these are sold and they depart = Shareholder stich up complete
What's going on ?????? The price should of responded to a potential deal not fallen surely
Ummm...I reckon that theory is a bit crank. Its probably simpler...
Markets have been in crappy mood with some tech names really selling off under the surface in US and less so UK.
Its on AIM and is a tricky company to understand due to where its comes from and how fast that has been. The company / finnCap do a pretty decent job of relating what's happening but it does take attention and time...plus there are some gaps to fill in particularly in terms of the sustained growth rate from here (no one knows...tho decent odds its high if not quite as high as the last 15 mths).
The CEO is heavily incentivised by share gifts. Too much IMO but undoubtedly he's been at the helm from a low and rough time and has been seen to be the figure delivering something quite spectacular to date. In US tech land...where they want to be and be judged...the comp isn't a head turner. Clearly as he was airdropped into the situation he wasn't going to be able to buy a ton of shares. Note, that he also negotiated his package at time when sp much lower and company appeared doomed according to mkt wisdom etc.
The price action recently perhaps shows where a lot of PIs got on the trade too?
Anyway, you can watch them present at the Raymond James conference today at 16:30 UK time:
]https://investors.tremorintern...
https://news.sky.com/story/sha...
The chairman of Tremor has been told by at least two big shareholders to launch a strategic review and a share buyback, Sky News understands.
Another insider said that Tremor had recently held initial conversations with a major US-based private equity firm about a potential takeover bid, and that it had recently signed a non-disclosure agreement with that party.
I hope effing not!
Clearly the likes of Schroders and Tosca would like a bid as that gives their large holdings liquidity (even if the bid doesn't complete).
But whether PE or industry bid I'm really not a fan of that route as I believe there's a chance at real good midterm growth story here. A bid is unlikely to deliver more than 30% upside. THAT is lowball bs
Hopefully, this news is the Chairman on cunning maneuverers to bring a bit of attention
both Schroders and Tosca have been reducing their holdings. The implication is that a bid is unlikely (but still possible)
crikey that would not be good news. Hopefully, having just IPO'd in the US an immediate move to withdraw from the market would not be considered.
A share buy back makes sense though I think.
hmm - staggering that Tremor International (LON:TRMR) is now an £850m market cap with £300m of net cash and an EBITDA in excess of £110m. Puts it on an EV/EBITDA of just 5 which seems inordinately low to me and compared to its peers now sits at massive discounts. Very odd price behaviour.
I did note they said they would start buying back shares as soon as it was perceived acceptable to do so. Apparently it is frowned upon in the US to do that within a certain period after an IPO. However, I'd say they will need to narrow the discount else they risk being taken out at too low a price.
Tremor International (LON:TRMR) buy back shares, to give to directors and then they sell them for a nice profit.
Directors pay is not bad either, when directors pay is more than the profits, I do have concerns.
Is this company being run for the directors or the shareholders?
I just caught the last 5 minutes of the IMC call. Scary-looking lot aren't they? Unfortunately I was too late for any grilling on the share sales. Did anyone pick up any pearls?
Basically as we suspected it is a share plan put in place on Nasdaq listing whereby the directors can agree to sell some shares in tranches over a 12 - 18 month period but have no control over the price/timing. They said it was for a small portion of their shareholding. It is basically there for them to realise some of their share based compensation but avoids any potential conflicts of interest whereby directors may choose not to pursue something that would make them inside because they wanted to sell shares for example.
So looks like they intend on retaining a good proportion of their shares but we may well see some more sales over the next 12 months that were set in place back in June.
Thanks for that
Executive salary remuneration for the top three is not too shabby either. As per the Dec 2020 year end annual report:-
Whether you think it’s good value is a matter of opinion but at least the company is transparent about it.
Gus.
The fact that Rebekah Brooks(ex News International sleaze bag) is involved as a NED would be enough to put me off!!
Drucker got over £4.4m and nearly 2m shares free in 2020, I find that excessive.
I hope the directors get a good grilling today.
Some people say Israeli companies are run by the directors for the directors, certainly looks that way here. Directors are getting loads of free shares, considering the amount of profits the company makes, I’m not at all comfortable with that and I won’t be investing.
My suggestion is rather than get in short term volatile price moves that may or may not be explainable is to look at the underlying business and how it is positioned (decide for yourself if their is a growable and defensible engine). This demo on technology they have is useful:
Highly uncertain, but IMO going into Q4 Tremor International (LON:TRMR) /finnCap have guided quite cautiously for Q4 and particularly fy22 relative to the growth trend we've seen. Hard to disaggregate it from broader covid and then post covid disruptions in marketing activity (inc changes/pressure on the 'wall gardens' like Apple, Google, etc)...so you could take the view Tremor is an unsustainable sugar rush based on post covid boom that is non sustainable. That's a poor interpretation IMO.
I'd say that Tremor looks good value assuming a significant slowdown in growth rate from now on...and is likely quite undercooked if growth trend continues. If future return is a spread of probabilities I think the current sp is at the low end (bar general economic/market downturn hitting all valuations) with an central tendency somewhere above 1000p and an upside that is high 1000s.
Risky and uncomfortable...but therein lies the opp
Stock has been trending sideways for 6 months while the rest of the adtech market, admittedly much higher valued, has endured a painful correction, many losing over 50%. This is a bullish technical pattern for £TRMR.
I can’t authoritatively explain yesterday’s action but another of my adtech holdings, Ironsource, fell 16% on no news before recovering slightly, also a couple of days after releasing earnings. So it’s possible that both reflect the market’s re-evaluation after an initial bounce post-release.
I don’t know IronSource but I do hold some Tradedesk, they were up 10% yesterday on no news, maybe there was a shift out of some adtech stocks into Tradedesk? TTD is looking expensive now, I may top slice next week. Shares were $50 back in May, I think it’s a good one to trade, my timing has not always been good though.
I don’t hold Tremor International (LON:TRMR), I have considered it in the past but I’m not sure about the management or Israeli companies.
Director selling has spooked some holders but I think it will bounce back next week.
I’ve held TTD for some years. It rewards skilful trading but my efforts in that regard have not been fruitful. Looks like a long term (volatile) hold to me although probably near the top of the channel for now. Price was up yesterday on (FOMO?) buyers taking advantage of its midweek dip.
There was a dip because of profit taking, as share price went up around 36% after good results, I did sell some, surprised it then went up again. I think the market also went down mid week, because of inflation data. What is FOMO?
FOMO - fear of missing out
They were right, TTD shares went up to $107 yesterday, getting a bit too dizzy heights now, I have sold most of mine.
@YieldFanatic's Twitter thread discussing the Q3 21 update: https://twitter.com/Yield_Fana...
Thanks! Very useful
What the absolute is going on here?! Directors cashing in some shares as part of a pre-arranged schedule of sales and we're down 15%?!
I'm puzzled by the drop, maybe an II selling down? Schroders reduced their position (from 10.7% to 10%) recently. Also - Finncapp massively upgraded their TP to 1700p, (RBC raised theirs a small bit to 1270p) but Stocko broker EPS forecasts looks like there's been downgrades. Not sure if this is a fault with Stockopedia or their data feed.
BTW Are the director sales to do with their RSU's vesting each quarter? If it's something else with an RNS explaining it I'd be much obliged if you can enlighten me.
Directors are shady here, consistently selling large amounts at the top
No. Goes down after results and mgt window to sell some shares. Imo equity remuneration is excess but US not U.K. vibe. I suspect a lot of speculators have and don’t understand so shaken out easy.
My guess is on fall is that Q4 21 and fy22 only modestly upgraded relative to its growth . So algo-ish like trading sees implied big growth trend downgrade
My comment above rushed on phone...expanding a little.
Tremor International (LON:TRMR) is a high angst stock for sure. The transition in what it is is phenomenal and not easy to access as a generalist investors. I'm not going to claim I fully understand the platform and its market positioning....but I've read and looked and its impressive IMO. I don't know if their end to end market place alongside private market places giving brands very high control is a truly sustainable advantage in terms of moat and margin. But its early inning and we get to enjoy the growth its driving.
I bought Tremor around its lows on the basis that cash generative based on performance business and they had a history of acquiring and adapting well so there was upside to non-performance side of biz. TBH I did not foresee such upside and I thought I'd be selling at 250-500p depending on how things panned out.
I also bought as the furore over old CEO and a civil fraud case against him was a touch of nonsense IMO. He sold a payment biz c.2010 to a mediocre PE firm. The PE firm didn't understand the space nor did their due diligence (that is evident from legal case IMO). The biz hadn't a near term hiccup when they acquired as some service providers pulled their service (this was very common in wild west of payment space - I've been there). Egg on face so they sought compensation...got a civil case to stick. CEO resigned, TRMR stock pumped.
That plus they are Israeli has people claiming they are crooks. Its a bit prejudiced.
Current mgt are over compensated in equity for my liking. Blame the useless old chairman for that. Plus new CEO has them over a barrel too given probs. Whatever...undoubtedly he has done a cracking job so I don't begrudge. He and other senior management will always be selling some of their comp share. But he's holding a nice whack still...on balance I'd say it indicates confidence.
Sept 2021 was a record month and they state that Q4 has continued momentum. So we can say that Oct was near record too. They're forecasting Q4 to be $85m net revenue from $77m in Q3. We will see but this looks conservative given they are running hot from end of Q3 and this is the main period for ads. I'd give pretty decent odds that there is a meaningful surprise of the >10% area (past history says could be decent bit more).
Its clear in the 2022 net revenue guidance they are also being cautious with $40m more than 2021 and they are forecasting their ebitda margin down from 55% to 45% due to costs coming back after covid normalisation so the revenue growth doesn't show so much into profit growth...and then adj eps taken down by ongoing share dilution too. This leaves 2022e eps at roughly 2021 eps level. This is likely very conservative on top line growth and extra costs and assuming some growth momentum continues sets them up for more upwards revision.
FinnCap raise price to 1700p from 1400p partly on Q3 performance and then mainly on peer relative valuation where TRMR is at least 50% discount...and in many ways looks like it should trade at a premium!
My guess is that we are set for a nice cycle of upgrades with the first coming late this month or early Dec when they get a feel for Xmas traffic.
DYOR its risky stock and space
An expected Stockopedia algorithm bump after the recent resounding earnings beat.
I note on the company website, go to the investor page and they're showing stock price chart on NASDAQ. I thought they were only listed in LSE. Anyone know if this is b******t?
No, it's true.
They listed on the Nasdaq as a ADR this year, 22 June I think.
Have a look at the news tab and you should find it there...
I bought my first slice of the now TRMR late 2017 having done well from PAYS, unfortunately I also bought XLM. Luckily I decided to keep TRMR and added periodically. The anx is now what are they worth, they do seem cheap leaving aside being an Israel based company. Burned by CAKE, NCMT and another Woodford duffer. I've sold some as I aim to stay max 5% portfolio, currently 6%. LUCE, G4M, SAGA, SAA, THRG, 3i, SOM, BLV, BEG, HSL are all key holdings. I had a massive sell off March 2020 mid crisis and re bought immediately/following week. By far my best year ever by miles, bizzare, I was even confessing to my wife that I had screwed up and lost half or fortune, she back the sell and buy thankfully.
Keep up the good work Michael
Looking forward to your summary
Will try and pull something together but won’t be today as am absolutely cream crackered from my cycle ride in the blazing heat!
Michael
Agree...Love MFBS posts...you should get your own site!
could we have a little comment on TRMR? Would appreciate it a lot! Thanks
hi guys, Barrie I might know you by a different name on ADVFN? Yes TRMR is a strange one... Do you think it's really fraudulent? That's worrying. Today's Q2 results are outstanding but so price just seems a bit odd...
Tremor International (LON:TRMR) I hold and agree with the optimistic view on Todays RNS but I pick up on the "whiff of fraud comment" . I had reason to write to the Company Secretary on 14th Augusr 2012. A copy of which is below which I posted on a Bulletin Board on which earlier the same was the comment below. The company hasn't responded to my letter but obviously did take action. I hold the share but with caution
Sir,
With respect, there was an intense period of Algorithmic trading in your shares on the London Stock Exchange on Friday 13th August. Trades were averaging one every 7 seconds during one hour. I would question if this was within the stock exchange rules ?
Time Band
Number
Number
Average
Average
BST
Deals
Deals
Trade
Price
13/08/2021
P ALGO
Off Book
P ALGO
P ALGO
Hr 08-09
26
6
£1,700
798.24
Hr 09-10
23
10
£2,809
797.94
Hr 10-11
20
4
£1,241
799.70
Hr 11-12
5
1
£2,680
799.84
Hr 12-13
3
2
£1,419
796.43
Hr 13-14
55
2
£1,350
784.47
Hr 14-15
270
12
£2,508
764.72
Hr 15-16
423
70
£2,511
757.56
Hr 16-17
94
16
£1,706
752.00
A copy of the London Stock Exchange Daily Trading report is available
I would question with a trade every few seconds if this was a deliberate legal attempt to drive the price of the stock down
Yours Faithfully
From a Bulletin Board
17 Aug '21 - 15:06 - 11675 of 11694
Interestingly when I bought a few shares in multiple tranches last, my online platform called me from their compliance department saying putting multiple trades through in short order was market manipulation and if it happened again they would close my account. In total there were 4 trades in 15 minutes aggregating to 11000 shares. And yet hedge funds can run also putting through 100s of trades per minute for a few 100 shares a time… and that’s ok.