{
  "docId": "019dd923-622b-71dc-a6db-f39b3a5e7362",
  "docSlug": "6a103edd2901",
  "documentTitle": "Outerwall Inc. (OUTR)",
  "authorId": "09_Engaged_Capital",
  "authorName": "Engaged Capital",
  "documentKindSlug": "activist-deck",
  "documentKindLabel": "Activist deck",
  "sourceTypeSlug": "activist_investor",
  "sourceTypeLabel": "Activist investor",
  "presentationDate": "2016-02-18 00:00:00",
  "orientation": "landscape",
  "aspectRatio": 1.3333334,
  "pageNumber": 16,
  "pageCount": 32,
  "prevPage": 15,
  "nextPage": 17,
  "slideType": "thesis_headline",
  "function": "diagnose_problem",
  "density": "dense",
  "nDataPoints": 0,
  "notes": "This is a classic activist investor 'thesis' slide identifying the gap between market price and intrinsic value.",
  "elementsJson": [
    "headline_text",
    "bullet_list"
  ],
  "metadataConfidence": 1,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622b-71dc-a6db-f39b3a5e7362/16",
  "deckHref": "/decks/019dd923-622b-71dc-a6db-f39b3a5e7362",
  "deckJsonHref": "/decks/019dd923-622b-71dc-a6db-f39b3a5e7362.json",
  "deckAnchorHref": "/decks/019dd923-622b-71dc-a6db-f39b3a5e7362#slide-16",
  "components": [
    {
      "bbox": null,
      "kind": "callout",
      "text": "The poor valuation reflects investor concerns that management and the Board will waste OUTR's substantial (but declining) free cash flows on risky growth initiatives",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd953-0936-7173-ab12-8ad2b576a53a",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.07,
        "x": 0.02,
        "y": 0.02
      },
      "kind": "image",
      "text": "Engaged Capital Logo",
      "attrs": null,
      "subkind": "logo",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "24bb8eb1-7e24-4037-985e-2184fd94a0d4",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.2,
        "w": 0.9,
        "x": 0.05,
        "y": 0.15
      },
      "kind": "list",
      "text": "The current price implies a severe discount to the “fair value” of OUTR’s robust cash flows. Abnormally poor Redbox performance is extrapolated by the market as a sign that “Redbox is dying” – the latest Redbox guidance serves to fan these concerns.",
      "attrs": null,
      "subkind": "bullet",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "3daff307-8a91-4d0a-a106-42733aa1e0ec",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.2,
        "w": 0.9,
        "x": 0.05,
        "y": 0.38
      },
      "kind": "list",
      "text": "History has proven it is difficult for OUTR to get a “fair” valuation in the public markets. Investors lack confidence that (a) free cash flows are sustainable or (b) free cash flows will be used to their benefit (or a combination of both).",
      "attrs": null,
      "subkind": "bullet",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "7442ae2c-3d9a-4a3a-a018-b0d28d486f8f",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.3,
        "w": 0.9,
        "x": 0.05,
        "y": 0.6
      },
      "kind": "list",
      "text": "The poor valuation reflects investor concerns that management and the Board will waste OUTR’s substantial (but declining) free cash flows on risky growth initiatives. We believe this concern is exacerbated by the history of numerous failed strategic investments designed to diversify and grow the business. Current return of capital via share repurchases and a modest dividend could be suspended at any time to acquire or invest in a new business venture.",
      "attrs": null,
      "subkind": "bullet",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "ac131f3b-6546-4afd-931f-e8c6b6de6764",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.1,
        "w": 0.6,
        "x": 0.2,
        "y": 0.05
      },
      "kind": "title",
      "text": "Current Valuation Is Not Representative of Fair Value",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "fc686dfe-e9f9-4595-b214-883fa6f65043",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [
    {
      "name": "capital-allocation-framework",
      "slug": null,
      "matchId": "0e3371b3-7092-418b-a60e-dd9fbe94d034",
      "evidence": "The slide explicitly discusses the risk of management wasting free cash flows on risky growth initiatives vs returning capital to shareholders.",
      "confidence": 0.8
    }
  ],
  "arcBeats": [
    {
      "to": 20,
      "from": 8,
      "beatId": "55c9de53-06e0-4577-a10b-ad59bf4e25b5",
      "arcName": "Problem-Agitate-Solution",
      "arcSlug": "problem-agitate-solution",
      "beatName": "Problem & Complication",
      "beatSlug": "consultants-gambit-problem-complication",
      "evidence": "OUTR's underperformance and flawed capital allocation strategy",
      "position": 1,
      "confidence": 0.8,
      "parentBeatName": "Complication",
      "parentBeatSlug": "complication"
    }
  ],
  "loops": [],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}