$CDLX: “Will Cardlytics Be a 1,000 Bagger?”
My interview on the After Dinner Investor podcast discussing Cardlytics.
Market Cap as of 5.20.2023: ~$5.06 / Share x 33.9M Shares ~ $172M Market Cap.
The Interview
This week I spoke with Jason Rothman from the After Dinner Investor podcast about Cardlytics:
In this interview, we discussed:
About CDLX (and why it’s interesting from an investment perspective)
The Win / Win / Win (with banks, users, and advertisers)
iROAS vs ROAS (incrementality, test vs control, how to know if users would have made a purchase anyway)
Bridg (what it is, why CDLX acquired them, the purchase price, and the unlocks)
Dosh (reasons for acquiring, opportunities to monetize)
History of the Business (and why CDLX wasn’t where they needed to be until only recently)
The 3 Big Banks (numbers, risk of a bank leaving, why banks trust them, banks doing it themselves)
New Ad Server (vs old tech, benefits of new ad server, what it unlocks)
New User Experience (images, categorization, local, new offer constructs)
CEO Karim Temsamani (his background, past success, what I’ve heard, incentives, and the “cancer surgery formula”)
New CFO (what I’m looking for with respect to future capital allocation, factoring, converts, NOLs)
Revenue and Expenses (billings vs revenue, Starbucks leaving and likelihood of returning, operating expenses and operating leverage)
Cash Flow, Debt, Shares (new timing of FCF positive, 2025 converts and possible actions by CDLX, diluted share count)
Valuations (1000 bagger, bearish / base / bullish valuation scenarios, how CDLX could get much bigger)
Apple (whether still works with Apple Pay, risk with Apple Card, potential partnerships)
Risks (risk of users not using bank apps or checking for offers)
Price Decline and My Actions (my thoughts on the 95%+ price decline with the stock and my actions)
Belridge Oil (Munger’s mistake with Belridge oil, my thoughts related to CDLX, my eBay story about a Belridge Oil sign, and Jason’s very thoughtful gift)
More Info and Numbers
There were some items we did not have time to discuss, and where I didn’t walk through all the numbers / valuations in detail.
Therefore, I plan to send out a follow-up email with this additional information.
In the meantime, if you’re looking for even more information, such as notes and thoughts following the latest Q1 earnings + other items mentioned in the interview, check out the latest updates in the CDLX Research Notes.
Research Notes
Research Notes contain information I have collected while researching, investigating, analyzing, and thinking through businesses.
This is where I continue to add additional notes, observations, and thoughts.
Some of the notes have never been made, nor will be made, into official posts that are public to read.
If you do not already have access to “Research Notes”, join others and upgrade your subscription here, and gain instant access to all the notes below:
Cardlytics ($CDLX) Research Notes:
For all of you with a paid subscription, you can read some of the recent updates:
#174-176 (5.11.2023): Thoughts After Q1 2023 Earnings
#172-173 (5.4.2023): New & Improved Feature, Final Thoughts Before Today's Earnings Call
#171 (5.1.2023): First Thoughts on Bridg Dispute Outcome
#170 (4.27.2023): Updated VWAP Projections + Additional Bridg Earnout Payment Possibility
#166-169 (4.25.2023): Updated Bridg VWAP Projections, Thoughts on Timing of Earnings and the Bridg Resolution
#164-165 (4.19.2023): Bridg VWAP Projections (12 and 13 trading days remaining of 20)
#162-163 (4.12.2023): Potential Stock Price After the Bridg Resolution, Potential Bridg Clients
160-161 (4.7.2023): Timing of Announcements, Convertible Senior Notes, Updated Projections
#158-159 (4.4.2023): Updated Guidance + Updated Liquidity Analysis and Projections
#156-157 (4.3.2023): Potential for New Banks Signing Soon and/or Remaining Banks Moving to the New Ad Server Ahead of Schedule, Possibilities and Potential Impact of Images
#154-155 (3.30.2023): How Bridg Can Lower FI Revenue Share, My Latest Large Purchases of CDLX with Leverage
#150-153 (3.27.2023): Possible Upcoming Announcements that Could Increase the Stock Price, New User Experience on My Chase Account, Less-Considered Liquidity Resources
#145-149 (3.24.2023): PacWest Deposits and LOC, Bridg Dispute, Resignation of CFO
#140-144 (3.20.2023): Why I Bought More
#133-139 (3.12.2023): Liquidity Analysis, Prior Use of SVB, 22Q4 Earnings, and More
I have also added a page to keep track of these updates as well.
If you do not already have access to “Research Notes”, join others and upgrade your subscription here:
Carvana ($CVNA) Research Notes:
General Research Notes on Businesses, Investments, and CEOs (Historical to Current):
Reviews on the Research Notes
Gain Access
If you do not already have access to “Research Notes”, join others and upgrade your subscription here, and gain instant access to all notes above: