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>Last week, we wrote about how Third Point's Dan Loeb wrote a letter to Disney urging it to spend more on content. Within days, the company announced a major reorganization of its content creation and distribution strategy, with an emphasis on focusing on DTC (streaming). We applaud the move...and think Disney becomes an even more compelling long as it plays catchup to the rest of the "COVID winners" from its position in the COVID loser camp. We have a catalyst path to follow now...earnings in November, Analyst Day on December 10th. Stock will be $150 by then. </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>

Last week, we wrote about how Third Point's Dan Loeb wrote a letter to Disney urging it to spend more on content. Within days, the company announced a major reorganization of its content creation and distribution strategy, with an emphasis on focusing on DTC (streaming). We applaud the move...and think Disney becomes an even more compelling long as it plays catchup to the rest of the "COVID winners" from its position in the COVID loser camp. We have a catalyst path to follow now...earnings in November, Analyst Day on December 10th. Stock will be $150 by then. 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>This week, Third Point's Dan Loeb wrote a letter to Disney urging it to spend more on content. We agree. Disney's stock has languished this year due to the havoc COVID has unleashed on its business model. Longer term, we think Disney's streaming service could be worth more then the stock today. </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>

This week, Third Point's Dan Loeb wrote a letter to Disney urging it to spend more on content. We agree. Disney's stock has languished this year due to the havoc COVID has unleashed on its business model. Longer term, we think Disney's streaming service could be worth more then the stock today. 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>We wrote about Disney at the outset of COVID-19, thinking that its dramatic drawdown was overdone – essentially arguing that consumer behavior ultimately won’t be impacted.</p><p>We admittedly have some egg on our face. Clearly this time is different. We think we are at maximum Disney bearishness - multiple sellside downgrades, consensus hedge fund short? Seems like a good entry point for what will become a crowded long again once some visibility emerges.</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 wrote about Disney at the outset of COVID-19, thinking that its dramatic drawdown was overdone – essentially arguing that consumer behavior ultimately won’t be impacted.We admittedly have some egg on our face. Clearly this time is different. We think we are at maximum Disney bearishness - multiple sellside downgrades, consensus hedge fund short? Seems like a good entry point for what will become a crowded long again once some visibility emerges.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.

Disney Revisited: Still a Long (Time From Now), When People Are (No Longer) Far Far Away.

<p>We write this note as we see US futures trading down close to 5%. So...there is a good chance Disney becomes even more attractive tomorrow. ;)</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 write this note as we see US futures trading down close to 5%. So...there is a good chance Disney becomes even more attractive tomorrow. ;)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 Corona Virus Selloff Opportunities: Disney

ASEAN (Indo) & China-focused. Ex-Deputy HoR UBS.

Johannes Salim, CFA

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/18840" target="_blank" data-smartkarma-citation="entities:18840:1">CBS Corporation (CBS US)</a> has made an opening bid to acquire <a href="https://www.smartkarma.com/entities/7472" target="_blank" data-smartkarma-citation="entities:7472:1">Viacom Inc Class A (VIA US)</a> while VIA counters the offer immediately.</li>
<li>Even at share swap ratio of 0.65 CBS shares for every VIA share, the deal (without taking into account cost synergy) would be EPS accretive for CBS.</li>
<li>The sector's M&amp;A deal flows and attractive valuation could put enough pressure for CBS's CEO to pull the trigger.</li>
<li>The play is through <a href="https://www.smartkarma.com/entities/11654" target="_blank" data-smartkarma-citation="entities:11654:1">Viacom Inc Class B (VIAB US)</a> as its share price is 14% lower than VIA's.</li>
</ul><p><a href="https://www.smartkarma.com/entities/18840" target="_blank" data-smartkarma-citation="entities:18840:1">CBS Corporation</a>…</p>



CBS Corporation (CBS US) has made an opening bid to acquire Viacom Inc Class A (VIA US) while VIA counters the offer immediately.
Even at share swap ratio of 0.65 CBS shares for every VIA share, the deal (without taking into account cost synergy) would be EPS accretive for CBS.
The sector's M&amp;A deal flows and attractive valuation could put enough pressure for CBS's CEO to pull the trigger.
The play is through Viacom Inc Class B (VIAB US) as its share price is 14% lower than VIA's.
CBS Corporation…

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)

Disney: They Listened to Loeb (Quickly!)

Disney's reorganization announcement of its content and distribution organizations is signal that management has been listening to investors.

Aaron Gabin

Disney: Listen to Loeb

Disney's stock has languished this year due to the havoc COVID has unleashed on its business model. It should use the opportunity to spend more on...

Aaron Gabin

Disney Revisited: Still a Long (Time From Now), When People Are (No Longer) Far Far Away.

We wrote about Disney at the outset of COVID-19, thinking that its dramatic drawdown was overdone – essentially arguing that consumer behavior...

Aaron Gabin

TMT Corona Virus Selloff Opportunities: Disney

We write this note as we see US futures trading down close to 5%. So...there is a good chance Disney becomes even more attractive tomorrow....

Aaron Gabin

CBS-Viacom M&A: The Second Time a Charm?

CBS Corporation (CBS US) has made an opening bid to acquire Viacom Inc Class A (VIA US) while VIA counters the offer immediately. Even at share...

Johannes Salim, CFA

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