I can't find any news, do you guys know whether there is a reason for this drop?
Interims are due out in a couple of weeks. Is trading (even) worse than expected?? Interestingly Taptica has only dropped by 3%. Last time XL crashed it took a larger bite out of Taptica too. Perhaps with Tapticas recent good results it's being left unpunished by this. Doesn't sound good.
I think it may have something to do with the news that Catena Media's founder, Erik Bergman, has sold 900 000 shares during the month of August at the same time as their fourth largest investor Optimizer Invest Ltd.
https://www.breakit.se/artikel/15309/catena-media-grundaren-erik-bergman-jag-kande-inte-till-att-optimizer-planerade-att-salja
Translated:
The Catena Media Founder, in principle, sold at the same time as Optimizer Invest.
"I received a request to sell a large block and chose to say yes," says Erik Bergman.
The fact that Catenas Media's founder Erik Bergman and Optmizer Invest, formerly the largest owner, sold much of their holdings in principle at the same time were "pure chance".
Erik Bergman writes in an e-mail to the News Agency on Friday after it has been known that through the ownership service, Holdings and Direkt's reporting, he sold shares for approximately SEK 100 million in August.
"I did not know Optimizer planned to sell," he writes on OptMizer's location only a short time after his own sales.
Erik Bergman, who owns the shares in Catena Media via Maltese Aveny Ltd, started the affiliate company with Emil Thidell in 2012. He owned just over 5.1 million shares or just under 10 percent after listing the company in the spring of 2016.
With the fall in August, ownership has gone from 8.2 to 6.5 percent. Erik Bergman lists three reasons behind the divestment.
"The first is that I want to invest more in the charities in which I'm involved." My own projects, Great.com, and organizations working mainly against malaria and extreme poverty in Africa, "he writes.
The second reason is risk spreading.
"With sales, I put about three quarters of my total economy in Catena. Something that felt risky when I was not involved and had not been in the company for a long time."
The third reason is about "a major international fund" shown interest.
"I received a request to sell a big block and then chose to say yes," writes Erik Bergman.
Notably, the US investment company Ruane, Cunniff & Goldfarb, which operates the Sequoia fund, flagged 5.9 per cent of the shares in Catena Media on Wednesday.
Erik Bergman is not in Catena Media's board and has no operational assignments for the company anymore.
Do you still have contact with the company?
"It depends on how to define contact with the company. I have no sense in numbers or daily business. However, I live in Malta and visit the office every now and then. It feels good to notice that the staff are very well and that it is good mood, "says Erik Bergman.
What do you think about the company's prospects?
"I really like Per Hellberg as new CEO and there are many amazing people in management. Catena Media is, in my opinion, by far the strongest player in an industry I think very much. It's very exciting in the United States and there the company has a really good position, by the way, the risks are well spread across different markets and segments. I am convinced that the future is bright, "writes Catena Media's founder.
Interesting, Thanks. As far as I understand, Catena Media is a highly acquisitive business with quite a bit of Debt (see this interview transcript with Ory, where he says Catena have debt of 150m while, he says, XML tends to fund acquisitions via cash flow).
I take your point that in this market any news of founders selling is an alarm bell for everyone. Having said that, XLM is already down a lot compared to the highs of May/June. Idon't think the extra 14% drop today is justified (or at least so I hope! I hold).
The size of the fall probably due to lots of stop losses being hit below the key 100p level. I myself sold my last remaining shares this afternoon. It may be cheap but there's not much love around for this stock right now.
Catena Media and XL Media are very similar businesses. Some would argue that Catena Media are mimicking the XL Media strategy but much with a much more aggressive approach to acquisitions, hence the reason why they have higher debt. XL Media are more cautious in their approach and prefer to grow organically where possible. As I understand, Catena Media are strong in the Scandinavian markets and have a reasonable presence in the U.S.
not related to this drop but the previous one, worth a read.
https://www.ii.co.uk/discussio...
Can XLMedia weather the “perfect storm”?
Despite XLMedia recently issuing a profit warning, CEO Ory Weihs insists the London-listed digital performance marketing firm is firing on all cylinders and firmly on track to “get back to growth”
Julian Rogers 25 July 2018
