Cardlytics ($CDLX): Bridg Earnout Disputes - New Scenarios and Liquidity Analysis (Research Note #218)

Details and scenarios related to the Bridg earnout disputes, related to both the 1st and 2nd earnouts.

Market Cap as of 12.20.2023: ~$8.53 / Share x 39.3M Shares ~ $335M Market Cap.

(#218): Bridg Earnout Disputes - New Scenarios and Liquidity Analysis

On the Q3 2023 earnings call, we learned that the 2nd Bridg earnout was officially being disputed by Bridg / SRS (Shareholder Representative Services LLC, the group representing former Bridg shareholders), similar to the 1st earnout.

And while there was an independent determination on the 1st earnout dispute in May, CDLX soon after challenged it, leading to the potential of paying out less than expected following the May announcement.

In this post I will discuss:

• What was actually disputed by Bridg / SRS on the 1st and 2nd earnouts (something not discussed by CDLX, related to list vs discounted prices on joint contracts)

• Potential outcomes on the 1st earnout

• Potential outcomes on the 2nd earnout (including non-zero)

• And how this changes CDLX’s future liquidity position

Additionally, below is a 1.5-hour video discussing this post (reminder, you can watch this on 2x speed).