AFFINION GROUP
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Motricity (MOTR) |
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$579 market cap at price range mid-point of $15 |
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BUSINESS |
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Hosted mobile data solutions that enable wireless carriers to deliver high value mobile data services to their subscribers. |
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SUMMARY |
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. Managed service business is flat for the last five quarters, see financials below
. Continues to show operating losses |
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CUSTOMER CONCENTRATION |
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. Generated 96% of revenues in the U.S. for the three months ended March 31, 2010.
. Revenues from the five largest customers, represented 90% of total revenues for the three months ended March 31, 2010, with AT&T and Verizon Wireless accounting for 40% and 39% of total revenues, respectively.
. For the three months ended March 31, 2009, revenues from the five largest customers represented 88% of our total revenues, with AT&T and Verizon Wireless accounting for 44% and 25% of total revenues, respectively |
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COMPETITION |
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. Includes mobile device manufacturers, wired search engines, Internet portals and directories, and wireless service integrators.
. In MOTR’s current offerings, competition includes, among others, Amdocs and Ericsson in the portal and storefront businesses, and Sybase, OpenMarket, Ericsson, mBlox and other wireless messaging providers in the messaging aggregation business.
. Additionally, MOTR faces the risk that customers may seek to develop in-house products as an alternative to those currently being provided by MOTR.
. Due to the dynamic and fragmented data services market, MOTRalso faces increasing competition from new market entrants like Microsoft, IBM, Apple, Yahoo!, Google and other providers of software applications and content delivery solutions. |
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INTELLECTUAL PROPERTY |
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Core intellectual property is the software used to provide services to customers. MOTR generally hosts all of its software, |
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USE OF IPO PROCEEDS |
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$86mm: to fund investments and acquisitions. |
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Motricity (MOTR) |
MOTR, C, 6 |
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Post-IPO shares: 39mm |
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Mobile infrastructure |
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Bellevue, WA |
2007 |
2008 |
2009 |
March '10qtr |
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IPO Mkt |
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Revenue ($mm\) |
$35 |
$103 |
$114 |
$29 |
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Cap (mm) |
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. Managed services |
$32 |
$86 |
$81 |
$21 |
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$579 |
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. Maintenance & fees |
$3 |
$17 |
$32 |
$8 |
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@$15 |
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Operining income (loss)% |
-150% |
-75% |
-11% |
-3% |
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Profit (loss) |
-$78.0 |
-$78.0 |
-$16.0 |
-$1.5 |
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Profit (loss) % of revenue |
-223% |
-76% |
-14% |
-5% |
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Quarterly performance |
March 09 |
June 09 |
Sept 09 |
Dec 09 |
March 10 |
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Revenue ($mm) |
$23 |
$37 |
$28 |
$25 |
$29 |
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. Managed services |
$20 |
$20 |
$20 |
$20 |
$21 |
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. Professional services |
$3 |
$17 |
$7 |
$5 |
$8 |
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Operining income (loss) % |
-28% |
-7% |
0% |
-15% |
-3% |
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Profit (loss) |
-$7.0 |
-$3.0 |
-$1.8 |
-$4.3 |
-$1.5 |
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Profit (loss) % of revenue |
-30.4% |
-8.1% |
-6.4% |
-17.2% |
-5.2% |
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VALUATION RATIOS |
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IPO Mrkt |
Price / |
Price / |
Price / |
Price / |
% offered |
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last 4 qtrs, ending in March |
Cap (mm) |
Sales |
Earnings |
BookValue |
TangibleBV |
in IPO |
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Motricity (MOTR) |
$579 |
4.9 |
-53 |
3.4 |
4.4 |
17% |
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SCORECARD |
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Mgt |
Market |
Market Do- |
Proprie- |
Total |
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1-5, 5 is high |
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Growth |
mination |
tary |
rating |
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20 is perfect |
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1 |
2 |
2 |
1 |
6 |
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