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

<p>We have been longtime fans of Netflix the product and Netflix’s management team can rightfully be described as visionary. They had the vision to have the public markets fund an experiment in business models that appears now set to breakeven on FCF in 2021. We have said since last year that Netflix is a good relative short given the extreme pull-in of demand from COVID, but have turned bullish for the simple fact that Netflix’s stock performance tracks the pace of sub growth, and we see growth reaccelerating in the back half of 2021. The kicker for us is the potential for gaming to be leveraged as an ARPU lever…and an upward estimate revision cycle. We may be early….but the stock’s flattish AH reaction on a pretty mediocre quarter and weak guide reads bullish to us.  </p><div class="content-highlight"><p>Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.  </p></div>

We have been longtime fans of Netflix the product and Netflix’s management team can rightfully be described as visionary. They had the vision to have the public markets fund an experiment in business models that appears now set to breakeven on FCF in 2021. We have said since last year that Netflix is a good relative short given the extreme pull-in of demand from COVID, but have turned bullish for the simple fact that Netflix’s stock performance tracks the pace of sub growth, and we see growth reaccelerating in the back half of 2021. The kicker for us is the potential for gaming to be leveraged as an ARPU lever…and an upward estimate revision cycle. We may be early….but the stock’s flattish AH reaction on a pretty mediocre quarter and weak guide reads bullish to us.  Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.  

<p>Negative Intel, Mixed on Comcast, Positive Amazon, Positive Netflix, Positive Roblox.</p><p></p><p></p><div class="content-highlight"><p>Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.  </p></div>

Negative Intel, Mixed on Comcast, Positive Amazon, Positive Netflix, Positive Roblox.Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.  

TMT Weekly: 3 Things That Stood Out the Week of 6/25/2021

AlphaSituations-Event/Catalyst Driven Research, AlphaSituations

Robert Sassoon

AlphaSituations-Event/Catalyst Driven Research

AlphaSituations

Since its establishment, AlphaSituations has delivered a track record of outperformance with a hit rate of winners of more than 70% of its portfolio of ideas generating annualized average returns of 20%. In January 2022, AlphaSituations was contracted by Water Tower Research, an investor engagement and stakeholder communication platform to provide coverage of Special Situations

Event-Driven

<p>We believe that the proposed merger of <a href="https://www.smartkarma.com/entities/at-t-inc" target="_blank" data-smartkarma-citation="entities:784:1" rel="noopener">At&amp;T Inc (T US)</a> 's  media assets with <a href="https://www.smartkarma.com/entities/discovery-inc" target="_blank" data-smartkarma-citation="entities:11395:1" rel="noopener">Discovery, Inc. (DISCA, DISCK, DISCB US)</a>  via a Reverse Morris Trust transaction promises to unlock substantial value for Discovery shareholders. Our insight discusses why the transaction has been beset by investor apathy, why we think this creates an excellent value creating opportunity and how best to take advantage of the opportunity.</p>

We believe that the proposed merger of At&amp;T Inc (T US) 's  media assets with Discovery, Inc. (DISCA, DISCK, DISCB US)  via a Reverse Morris Trust transaction promises to unlock substantial value for Discovery shareholders. Our insight discusses why the transaction has been beset by investor apathy, why we think this creates an excellent value creating opportunity and how best to take advantage of the opportunity.

MergerTalk: Why Market Apathy To Discovery's Merger With WarnerMedia Is A Gift To Value Investors

<p>We have been longtime fans of Netflix the product and Netflix’s management team can rightfully be described as visionary. They had the vision to have the public markets fund an experiment in business models that appears now set to breakeven on FCF in 2021. We have said since last year that Netflix is a good relative short given the extreme pull-in of demand from COVID, and the fact that Netflix’s stock performance tracks the pace of sub growth, and the shockingly weak guidance for 2Q21 implies this stock will continue to be the #1 large cap funding short for the foreseeable future. But for how long?</p><div class="content-highlight"><p>Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.</p></div>

We have been longtime fans of Netflix the product and Netflix’s management team can rightfully be described as visionary. They had the vision to have the public markets fund an experiment in business models that appears now set to breakeven on FCF in 2021. We have said since last year that Netflix is a good relative short given the extreme pull-in of demand from COVID, and the fact that Netflix’s stock performance tracks the pace of sub growth, and the shockingly weak guidance for 2Q21 implies this stock will continue to be the #1 large cap funding short for the foreseeable future. But for how long?Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<div>
<p>On 29th Mar 2021, we spoke about the Archegos driven correction in some of the China ADRs,  <a href="https://www.smartkarma.com/insights/china-adrs-blocks-liquidation-buyback-implications" target="_blank" rel="noopener">China ADRs- Blocks, Liquidation, Buyback - Implications.</a> That in turn had followed close on the heels of the SEC driven correction for the sector, which we looked at in <a href="https://www.smartkarma.com/insights/china-adrs-sec-notice-instead-of-three-probably-have-four-years-till-2025-correction-overdone" target="_blank" rel="noopener">China ADRs - SEC Notice - Instead of Three, Probably Have Four Years till 2025 - Correction Overdone</a>.</p>
<p>In this note, we'll talk about the updates since our previous note.</p>
</div>


On 29th Mar 2021, we spoke about the Archegos driven correction in some of the China ADRs,  China ADRs- Blocks, Liquidation, Buyback - Implications. That in turn had followed close on the heels of the SEC driven correction for the sector, which we looked at in China ADRs - SEC Notice - Instead of Three, Probably Have Four Years till 2025 - Correction Overdone.
In this note, we'll talk about the updates since our previous note.


China ADRs Quick Update - SEC, Archegos, Blocks - Showing Signs of Life

United States

Paramount Global operates as a media company. The Company produces and distributes entertainment content through studios, networks, streaming services, live events, and merchandise. Paramount Global serves customers worldwide.

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Paramount Global (PARA US)

Netflix 2Q21: Game On

We have turned bullish on Netflix recently because we see the pace of sub growth reaccelerating in the back half of 2021. The flattish AH reaction...

Aaron Gabin

TMT Weekly: 3 Things That Stood Out the Week of 6/25/2021

We think Intel's restructuring is a means of burying its coming market share loss driven margin declines, while Comcast rumors are nonsensical....

Aaron Gabin

MergerTalk: Why Market Apathy To Discovery's Merger With WarnerMedia Is A Gift To Value Investors

The proposed merger of AT&T's WarnerMedia with Discovery has real shot of being a significant global competitor to leading streaming services...

Robert Sassoon

Netflix 1Q21: We Ran Out of Content

Netflix just issued its weakest guidance in years. We think subscriber growth will reaccelerate in a few quarters, making Netflix a sneaky long by...

Aaron Gabin

China ADRs Quick Update - SEC, Archegos, Blocks - Showing Signs of Life

On 29 Mar, we spoke about the Archegos driven correction, that had followed close on the heals of the SEC driven correction for the sector. In this...

Sumeet Singh

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