illumin Holdings Inc T.ILLM

Accord partners update / comment on SA

[BeatsBast]

Here is an update from accord partners. Happy reading! I'm the author of the Accord Partners piece, above. Several people have asked me privately about ACUIF and its recent price drop. I have some insight into Acuitys display ad market, having been Founder/CEO of AdECN, the first exchange for display ads, which I sold to Microsoft in 2007. I was briefly general manager of Microsofts display ad platform. Ive also worked on (and invested in) a number of adtech companies since, including one that maintained a real-time graph of eight billion web pages that ranked inventory for display advertisers. I think Acuitys stock dropped after the earnings release because investors expected Q4 2020 revenues would be higher than Q4 2019. With a day-traders short horizon, sure, the drop makes sense. Thats not my world. I think the numbers were actually very good, given Covid. A 35% increase in revenues from the previous quarter? A 30% increase in EBITDA year over year? This is solid management in tough times. These numbers, though, are not the Acuity story. They are all about the companys legacy business, the DSP or managed services business, which will sunset over the next two years, supplanted by the illumin business, according to the companys CEO in the March 3 earnings call. The illumin platform is Acuitys future, and its a good one. The company is making a bold play with illumin to win business from the established DSPs. It isnt just that the illumin platform is self-service. Its that it makes it easy to run intelligent story-telling campaigns -- so easy that agencies and advertisers can run them themselves. They wont have to go through a DSP. They wont have to pay the heavy mark-up for managed services. As agencies and advertisers switch to illumin, the established DSPs will lose revenue to Acuity. This is textbook disintermediation. Is the opportunity there? Yes. Ive be involved with building three display ad platforms. I am extremely impressed with illumin. I believe it does make smart campaigns accessible to the larger world of less-technical users. How big is this play? Big. The size of The Trade Desk is a reasonable guess since The Trade Desk itself ran a similar disruptive course in its day. What are the constraints? Not many. Acuity can scale as quickly as it needs to since the platform is self-serve and the inventory is already piped in and is virtually unlimited. This isnt a marketplace where they have to find both buyers and sellers. This isnt a manufacturing business where they have to build production lines. The bottleneck, if there is one, will be training new support personnel. When will we know this is all going to work? Large clients are testing illumin now. When we read in press releases that they are coming back for seconds and thirds, thats proof, and it will come long before the results show in the quarterly numbers. When should we buy? I really like the industry, the disruptive play, the scalability, the financials, the coming uplist to NASDAQ, and the management. My little fund is invested now and weve bought more on the recent dip.

[retiredcf]

Nice find and a logical explanation of what should be a bright future for AT.  In the meantime, NASDAQ futures are in the green with rumblings that the Tech Wreck may be coming to an end. Combine all of this with the Index listing and we should have a better week. GLTA

[growthnprosper]

Thanks for the update. I bought on the recent dip as well.