We have spent eight months following and researching the spinoff of Liberated Syndication.
Here is the investment case in a nutshell:
Liberated Syndication (Ticker: LSYN) is microcap software-as-a-service (SAAS) business with recurring revenue growing 25%+ annually trading at 3.1x earnings. LSYN is a pure play on continued secular growth of the podcasting industry.
Sounds pretty interesting right?
As shown in the chart below, the podcast industry is growing very nicely:
And LSYN has grown right along with it:
So whats the catch?
Well for starters, LSYN has a $9.2mm market cap and is incredibly illiquid, and its management team does not have the best reputation, to put it mildly.
Nonetheless, after eight months of work, we’ve concluded that it is likely worth multiples of its current share price. After all, LSYN is a business that generates a 20.4% ROE. It has EBITDA margins of 35%. Revenue is recurring. It is a market leader in an industry with secular tailwinds.
We have published a sixteen page report for $97 that is available here.
The report will save you eight months of research and includes:
– Fab Universal / Liberated Syndication History
– Podcast Industry Overview
– Podcast Industry Competitive Landscape
– Valuation Analysis: LSYN vs. Internet Content & Information Industry
– Profitability and Capital Efficiency: LSYN vs. Internet Content & Information Industry
– LSYN Management Incentives Including Analysis of Management Stock Options
– LSYN Key Risks
– Financial Model with Projections through 2018
Receive instant access to the report here:
Let me know what you think!
Thanks for the report. I purchased the paid up version. The report has good detail in some respects but I was surprised that there was no commentary on the CEO and CFO (not even their names) besides saying they were previously involved and do not have the best reputations. Where are they based (i.e. subject to US law going forward?), where are they from, were they involved in the previous scam or were they mere puppets at the US holding company, did they profit during the scam, what are their backgrounds and industry credentials, are they buying / selling stock, etc etc. Also is there a non-exec board? What is the corporate governance like going forward?
Thanks for your questions Alex! I sent you a longer email with answers to all your questions, but here is a summary of my thoughts for the benefit of everyone: The CEO and CFO are Christopher Spencer and John Busshaus, respectively. Prior to the spinoff of LSYN, they ran Fab Universal. They were in charge when the fraud in China was discovered and presided over the collapse of the stock. To be clear, they should be replaced given the shareholder value destruction that took place under their watch. Also, the board of directors is comprised of three of their cronies (not the best shareholder governance going forward). However, they don’t control the company, shareholder do. All it takes is a majority vote of shareholders to remove any or all of Libsyn’s directors (per the S1). Also, a special meeting can be called by anyone who owns 10% of the stock. At LSYN’s current market cap, that is an investment of only ~$1mm. As such, I believe it’s only a matter of time before an activist gets involved.
Hi SSIV,
Purchased the report and sent you a DM with a few thoughts – I have more and would love to discuss via email.
Hope to hear from you soon.
J
Hi Justin,
Thanks for the comment and thanks for purchasing my report!
Yes I have done a ton more work on LSYN and would be happy to share my thoughts with you.
I will shoot you an email. Look forward to connecting!