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AVID stock is ready to go up?!?

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Re: AVID stock is ready to go up?!?

Postby DC-Choppah » Fri May 08, 2020 10:47 pm

Here we go again?

Ok, so recurring revenue keeps going up...Non-recurring revenue goes down (all those cancelled shows). Total revenue goes down. Earnings are negative, but near zero anyway.

Stock trading near the bottom ($6) of its favorite pattern.

They are converting to a steady revenue stream, but I wonder if that stream will end up with them being a smaller company (if it survives to make money)? If so then the value of the stock goes down from here IMO.

Given the continuous increase in the recurring revenue stream, I wonder when the steady revenue flattens and stops growing and at what level? Can new recurring revenue actually grow fast enough to support a higher stock price?

The market keeps thinking it will, then changes its mind. I can play that game forever and make quite a bit of money in the process no matter if it pans out or not. It just can't tank.

So I see it this way, if you think they tank, then stay out. Otherwise, it will repeat its pattern and you can make money on the next swing up, but you will need to get back in now.

I am still digesting and have not decided. I am trying to figure how much more recurring revenue there actually is out there to be had. I mean, that is the only positive thing they have going. Flatten out the recurring revenue, and what do they have?
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Re: AVID stock is ready to go up?!?

Postby The Red Bladder » Sun May 10, 2020 4:47 pm

That was just the first quarter and the C19 crisis hardly hit until April, so Q2 is the one to watch.

Those results were pretty much in line with expectations, slow sideways drift IMO. Debts continue to rise and are now at about $470m adjusted for currency fluctuations. That means that income will probably not cover interest payments.

The P&L is dreadful and the company is in deep negative equity of minus $160m. Some of their assets on the plus side are 'iffy' things like receivables ($82m) and inventory ($32m) and they are heading into a very bad downturn in trade and not all their major customers and competitors will survive the journey.

As Warren Buffett famously stated, "When the tide goes out, we get to see who's been swimming naked."

But as you said, earnings are falling and subscriptions are rising, but from a very low base. My underlying feeling is that the damage done by the last three CEOs is just not repairable in the long run. It's a crying shame because it used to be a great company until about 15 years ago.

What happens to Avid will depend greatly on what happens to the rest of the real economy. Right now, we are seeing a major divorce between the stocks, bonds, and financial markets and the real economy in the real world. Parts of the stockmarket are acting as if the C19 emergency has nothing to do with them.

Pretty soon the C19 crisis will catch up with all those nude swimmers who have been loading up with debt and massaging the books.
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Re: AVID stock is ready to go up?!?

Postby Ramirez » Sun May 10, 2020 7:58 pm

A lot of audio companies has seeked to take advantage of the current situation. If my Facebook feed is anything to go by, sales of the small Focusrite interfaces must be through the roof. Similarly there a lot of software deals around (and exented free trials). Reaper must be seeing a large increase in downloads too.

Avid, as far as I can see, has done fugger all.
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Re: AVID stock is ready to go up?!?

Postby James Perrett » Mon May 11, 2020 12:04 am

Ramirez wrote:If my Facebook feed is anything to go by, sales of the small Focusrite interfaces must be through the roof.

Focusrite seem to have their supply chain better organised than some of their rivals - currently the 2i2 is about the only interface that is actually available in its price range.
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Re: AVID stock is ready to go up?!?

Postby DC-Choppah » Thu May 14, 2020 12:02 am

Focusrite (TUNE) looks like a stable company. Revenues increase linearly with earnings going up in step.

But as a stock, it appears to me that the price already has success built in. As an investment it is hard to see what will push the stock price higher. Lower I can see though. Or perhaps flat.

TUNE stock is a candidate for shorting. Playing the same swing trade game as AVID but from the other direction.

My theory is that the market has liked TUNE, and it has attracted investors, which drove the price up higher than it should be. This results in spurts of sharp negative drops, and choppy jagged rises. Just like AVID, the downward corrections are always bigger, faster and straighter than the upward ones.

But with AVID, there is this potential that it could turn profitable which would cause the stock to settle to a new higher place. So there are investors trying to catch that event. That biases it towards the positive.

With TUNE that has been played out already and there may be nowhere to go but down. So it seems that the play in the negative direction is more likely. IMO.
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Re: AVID stock is ready to go up?!?

Postby DC-Choppah » Fri May 15, 2020 4:17 pm

Avid stock getting comfortable with new lows, high P/E ratio.

I am not in and don't plan to be for this cycle.
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