Friday, September 12, 2008

Edelheit Offers Update on Destiny Media

From the Value Investors Club:

1)I expect a real acceleration in revenue, while expenses stay relatively flat.

2)New customers are transitioned to pay, and their use of DSNY`s service continues to grow.

3)launching of the new Clipstream product.

The stock is down on general microcap weakness. As they announced in June, the company expects to be profitable in the November quarter and I expect the stock will react quite positively to that. Plus new customer wins as well.

5 comments:

Albert said...

I think AE's simply mistaken about the near term upside to clipstream. You said yourself that the company has not paid attention to it because they've been focuses on PlayMPE for the last year or whatever. It's not like they're going to go from decreasing revenues to a steeper upside in such a short time. I don't see clipstream adding much for at least a few quarters, if then. I think this is a better deal than PNWIF, and the stock price fall may just be a quirk of being a penny stock.

On an unrelated topic, I also think that other stock I mentioned, RAME, is pretty attractive now (given that it's fallen 27% since I bought it). I don't think oil is going to continue to fall back to $80, and even if it does, it will probably move back up in the next year or so. Besides, RAME's valuation doesn't depend on $140/bbl oil.

DaveinHackensack said...

I agree about Clipstream. It sounds like a great product, but I wouldn't expect a lot of revenues from it in the near term. If memory serves, I think AE based his earnings estimate for solely on PlayMPE business though.

I'll give RAME another look. As investors overreact to the current correction in commodities (and, in particular, oil), there are some bargains appearing among domestic E&Ps.

Albert said...

I actually bought some more RAME today. I actually like some of the growth potential there as much as I like the value aspect. It may take awhile to get recognized, but I'm not too worried about it.

Anonymous said...

Just another money-losing and obscure company from Canada. Why shoulc anyone want to own this consistent loser where revenues grow but losses keep getting bigger?

++++++++++++++++++++++++++++++++++

Destiny Media Reports Record Revenues for Q3 2008
Monday July 14, 3:30 am ET
Play MPE Revenues Grow for 11th Consecutive Quarter; 96% Increase Over the Prior Year


VANCOUVER, British Columbia, July 14 /PRNewswire-FirstCall/ -- Destiny Media (OTC Bulletin Board: DSNY - News), the global leader in the secure distribution of pre-release music to radio and provider of instant play streaming video and audio, is pleased to report record revenues for Q3 which covers the period March - May 2008. Company products include Play MPE® and Clipstream®.
ADVERTISEMENT


According to Destiny CEO, Steve Vestergaard, this was the quarter where Destiny clearly emerged as the company which will become the global standard in digital delivery of pre-release music. "We've built a foundation where we can confidently say we expect to be profitable by Q1 (Sept. - Nov.). We've reduced expenses by over 20% from the prior quarter and expect costs to continue to decline. We have maintained upward revenue growth while implementing a new system of calculating price per send, which while beneficial to the labels in the short term, should result in higher volumes and revenues in coming months. We expect a revenue spike in the first quarter.

"Our system usage continues to grow. We expect to announce at least one more company wide major label agreement and one major label international agreement in Q4. We also expect to announce significant progress with our expansion into Canada and new industry partnerships."

The company currently has company wide North American agreements in place with Universal Music Group and EMI. In addition, agreements are signed with sub labels of Sony BMG and Warner in North America and with UMG, Warner and Sony BMG in northern Europe. System trials are active in countries across Europe, Asia, Latin America, and in Australia and New Zealand.

Clipstream revenues are also expected to increase sharply in the first quarter. The new Clipstream® hosted system, under development for over a year, is expected to launch by Q1. The solution, which will be initially marketed into the music industry will feature automated encoding, hosting and reporting, asset management and list management. Users will have the ability to upload and share any content type. They will have the choice of accessing the content directly from the Clipstream® website, as an email or through embedded code built into user websites, blogs and social network sites. If the content is audio or video, it can be optionally and automatically converted into the Clipstream® format or converted into rich media such as a Clipstream® rollover audio or video ad. Other technologies, such as Clipstream® Audiomail, Clipstream® TV, Pirate Radio and Destiny's watermarking will be integrated into this new system. An optional search feature will tie together related content even though it may be spread across different user websites, providing YouTube style functionality without requiring the content to be located on a third party destination portal.

Highlights

* UMG announced expanded agreement with Play MPE into Canada, US and Mexico; only company wide solution

* Agreements with high profile companies including Robbins, Rounder, New West, Koch, Curb, CO5, A&R MusicExpo, sub labels of Sony BMG and Warner

* Expansion into Northern Europe, agreements with Sony BMG, Warner, UMG Sweden

* Vancouver site visits and server audits with EMI in anticipation of much higher volume rollout

* Partnered with Shooting Star in Australia and New Zealand, rollout begins with radio and majors

* Testing in Europe, Asia, Latin America

* Launched new player, popular agentless web access "Direct to Web"

* Launched new Mac spoof ad campaign, presented at Country Radio Seminar, Conclave, etc.

* Launched Blue Note campaign, direct download access across Clear Channel's Mediabase charts


* Published watermark patent; this proprietary technology is the only
inaudible solution which can be embedded nearly instantly, but still survives
analog duplication, compression, conversion into other formats and resampling
and filtering.



Results

Q3 2007 Q2 2008 Q3 2008

MPE Revenue 164,748 284,054 301,604
Clipstream Revenue 85,951 69,303 60,775
Pirate Radio Revenue 8,509 6,452 6,720



Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
May 31, May 31, May 31, May 31,
2008 2007 2008 2007
$ $ $ $

Revenue 369,098 259,208 1,085,555 599,206

Operating expenses
General and
administrative 206,646 223,977 838,385 489,656
Sales and marketing 323,330 372,168 1,244,920 890,067
Research and
development 335,540 272,904 1,120,829 620,106
Amortization 11,781 16,530 33,326 43,591
877,297 885,579 3,237,460 2,043,420

Loss from operations (508,199) (626,371) (2,151,905) (1,444,214)
Other income
(expenses)
Other income 31,384 -- 73,499 --
Interest income 492 18,525 15,451 18,525
Interest and other
expense (9,237) (3,134) (18,480) (10,362)
Net loss (485,560) (610,980) (2,081,435) (1,436,051)

DaveinHackensack said...

Stockdoxc/Paul Price,

No need to post here anonymously -- as long as you keep it civil I will let your comments stand. Not that there was any need to paste in last quarter's results for DSNY either, since we've seen them already.

With respect to your question about why someone would want to own a money-losing stock, the answer is fairly simple: because they expect the company to earn money in the future. In the case of DSNY, management has said the company should be profitable by the November quarter.

As for the point of considering small, obscure stocks, I addressed this (in response to an earlier comment of yours) in this post, "Why worry about small, thinly-traded stocks". There is risk in buying stocks such as DSNY, to be sure, but you are at least compensated for that risk with the potential of significant upside. That doesn't seem to have been the case with many non-obscure companies -- even Dow components such as C and AIG.