As you know, I’m a big fan of Ad Tech in general. If you’re still getting familiar with the space, you can get a complete breakdown in this issue of “
Stock Squawk: The World of Ad Tech”.
Between IDFA with Apple’s iOS, Google’s elimination of cookies (postponed to 2023), supply chain issues, and labor shortages among other headwinds, Ad Tech has seen it’s fair share of pressure since the February ‘21 highs.
None of these issues are surprises, and frankly I felt like the risks were mostly priced in going into 3Q21 earnings, but that seems to not be the case so far, as companies are repeatedly getting sold off on decent, if average, earnings reports. They have all listed the same issues I’ve mentioned above to different degree’s.
Pragmatic advertising and CTV advertising continues to grow across the board & take market share from legacy systems. This trend is going to continue. Each company I follow has it’s own unique macro issues, but a year from now, two years from now, they’re all going to see much higher revenue’s from today. I still see the space as an opportunity for investment.
I could talk about any number of my Ad Tech holdings and have a similar discussion. Roku, Magnite, Digital Turbine all do different things in the same Ad Tech space, but their story in a broader scope is similar. I’ve chosen to break down Acuity for two reasons. First, I rode it from $6 to $25, and back down to under $5; and I want to find out if I’ve missed something, did I make a mistake? Secondly, this has been a long term conviction position; so I hope to remove some mental bias by forcing myself to put it in print.
*A note of caution: AcuityAds is a Micro-cap and carries the inherent volatility risk of all micro-caps.