Cardlytics ($CDLX): Bridg VWAP Projections (Updates #164 - #165)
New notes on projecting the Bridg VWAP (with different stock prices and volume) for the stock component of the 2nd Bridg earnout payment.
Market Cap as of 4.19.2023: ~$7.01 / Share x 33.6M Shares ~ $236M Market Cap.
VWAP on 2nd Bridg Earnout Payment
I started keeping track of the current volume-weighted average price (VWAP) for the upcoming 2nd Bridg earnout payment, in case CDLX elects to use the stock component.
I believe there has already been 8 full trading days counted towards the 2nd VWAP, out of 20.
As the name states, this is not a straight average of the stock price, but instead the stock prices are weighted by the corresponding volume to get the average price. Therefore, we need to keep track of and project both the stock price + the volume.
The work at the end of this post (in updates #164 and #165) include multiple projections of different stock price and volume scenarios to estimate different possible VWAPs for the remaining trading days, and the resulting additional shares that would be issued and cash paid with the 2nd earnout.
This analysis has led me to view the situation slightly different than most, especially under one of the more negative scenarios and its impact on CDLX’s ending liquidity position.
Before Reading the Updates at the End of this Post
Update #164 explains the thought behind each projection and discusses the corresponding results.
In #165, not only does it include one additional trading day for the VWAP, but I added a new format vs #164 to have everything captured in a single picture for each projection. This includes graphs and a table to see the changes and trends over time. And at the bottom right of each picture is the resulting ending total shares and ending liquidity.
While I did label the different projections at the top of each picture in #165, as well as include a scenario description at the bottom left of each picture, you should still read update #164 for some background, and have a better idea of what is going on between the different VWAP projections.
Note: I have found it useful to click and expand on the pictures in #165 and flip between the different projections to see what differs, and how different projections change the ending total share count and liquidity.
To be able to do this best, view this in your browser, and it is even better if you view on your desktop.
But viewing on mobile works as well, given you can see multiple projections at the same time (but it may requiring some zooming in).
Before You Ask…
Yes, I probably spent too much time putting this all together (especially #165), for something that is only going to be relevant for the next 12 trading days.
But this is very important, and I think this analysis highlights why CDLX is not in as bad of a situation as many may think, even if they lose the dispute and if the stock price decreases significantly for the 2nd earnout VWAP.
The CDLX Research Notes Updates
At this time, all of the following notes are under
For convenience, I copied over the corresponding sections of the Research Notes and pasted them at the end of this post.
Note, I do tweet out when I make an update to the Research Notes. Therefore, if you want more real-time updates, follow me on Twitter. (I also have been posting on Substack Notes when there is an update.)
The order below matches how I copied them to the end of this post to read.
CDLX Research Notes: Update #164
Added on 4.17.2023
Current VWAP for 2nd Bridg earnout payment (the stock component)
13 trading days remaining of 20
Stock prices and volume projections (for the 2nd VWAP)
CDLX Research Notes: Update #165
Added on 4.18.2023
Updated VWAP Projections
12 trading days remaining of 20
Additional graphs to more easily see changes and trends
Added ending share count and liquidity (after both earnout payments)
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Research Notes contain information I have collected while researching, investigating, analyzing, and thinking through businesses, such as CDLX.
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Some of the notes have never been made, nor will be made, into official posts that are public to read.
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Cardlytics ($CDLX) Research Notes:
For all of you with a paid subscription, you can read some of the recent updates:
#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.
Carvana ($CVNA) Research Notes:
General Research Notes on Businesses, Investments, and CEOs (Historical to Current):
Reviews on the Research Notes
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For convenience, I copied over the corresponding sections of the Research Notes and pasted them directly below.