{ "docId": "019dd923-622c-750b-8b96-6d03b12e1d18", "docSlug": "cfe5ee328183", "documentTitle": "Stroer SE & Co. KGaA (SAX)", "authorId": "51_Muddy_Waters", "authorName": "Carson C. Block", "documentKindSlug": "research-note", "documentKindLabel": "Research note", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2016-04-21 00:00:00", "orientation": "portrait", "aspectRatio": 0.77272725, "pageNumber": 33, "pageCount": 62, "prevPage": 32, "nextPage": 34, "slideType": "appendix_disclosure", "function": "cite_precedent", "density": "overcrowded", "nDataPoints": 6, "notes": "The text is a dense narrative block with extensive footnotes documenting corporate transactions and legal/operational issues.", "elementsJson": [ "paragraph", "quote_block", "footnote" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b96-6d03b12e1d18/33", "deckHref": "/decks/019dd923-622c-750b-8b96-6d03b12e1d18", "deckJsonHref": "/decks/019dd923-622c-750b-8b96-6d03b12e1d18.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b96-6d03b12e1d18#slide-33", "components": [ { "bbox": null, "kind": "callout", "text": "That is a remarkable reversal of fortune for a company that in just five months in 2013 contributed, by our calculation, €3.3 million in revenue to Ströer’s performance.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-3f3e-76f7-b9e2-3ff55e49088a", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.04, "w": 0.78, "x": 0.11, "y": 0.14 }, "kind": "paragraph", "text": "Ströer announced the acquisition of a majority stake on 15 July 2013, and it closed on 1 August. Ströer was quite bullish on its acquisition of Ballroom:", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "5c67fd78-8226-4c2c-bbe6-e478785a01b4", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.18, "w": 0.78, "x": 0.11, "y": 0.32 }, "kind": "paragraph", "text": "By the end of 2013, Ströer held a 62.3% stake in Ballroom, and had pared the company down to primarily focus on Turkey and Poland. However, by 2015, it was apparent that Poland and Turkey had gone very wrong. Ströer disposed in 2014 and 2015 of what appear to be key operating entities in each market for close to zero consideration. Ballroom subsidiary Evolution Media Net SP. Z.O.O. filed for bankruptcy in March 2015, and allegedly Ströer dismissed CEO Muriej Minder over suspected (unspecified) irregularities. Ströer disposed of Evolution Media Net for zero sometime in 2015. That is a remarkable reversal of fortune for a company that in just five months in 2013 contributed, by our calculation, €3.3 million in revenue to Ströer’s performance.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "638cda81-75bc-4528-bebe-6b527a434949", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.11, "w": 0.78, "x": 0.11, "y": 0.51 }, "kind": "paragraph", "text": "Ballroom Turkey has a similar fact pattern to that of Ballroom Poland. The key operating subsidiaries in Turkey were Linkz, SEM AS and Vidyoda. As part of the Ballroom’s acquisition, Reklamz founder Orkun Tekin became head of Strategic Development and Investments at Ballroom and a member of the board. Tekin and other Turkish partners obtained a 10% stake in Ballroom. Ströer renamed Vidyoda RZV and disposed of Reklamz for €0 in 2014. A disgruntled former Ballroom employee alleges, however, that RZV included", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "bed293c7-ef67-468f-83ec-37483f96a5df", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.78, "x": 0.11, "y": 0.08 }, "kind": "paragraph", "text": "34.65% stake in Ballroom for €6.25 million in November 2011. Ballroom initially planned on IPOing on the Warsaw exchange in 2012, but choose to be acquired by Ströer instead.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "c3a96127-018c-46a6-8f55-71264f79f153", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.74, "x": 0.15, "y": 0.19 }, "kind": "quote", "text": "With this acquisition, Ströer is going international with the expansion of its business model to include marketing of online advertising, which has already been launched in Germany. This will make Ströer a full service provider in the core markets of Turkey and Poland as well. Ströer will hence be a relevant player on the market from the outset. In Turkey, Ströer is at the forefront in terms of outdoor advertising. With Ballroom Group, the Group will rank first place among online marketers.", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "2ea90e16-3458-44f4-be1b-5bedc313abbc", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "\"With this acquisition, Ströer is going international with the expansion of its business model to include marketing of online advertising, which has already been launched in Germany. This will make Ströer a full service provider in the core markets of Turkey and Poland as well. Ströer will hence be a relevant player on the market from the outset. In Turkey, Ströer is at the forefront in terms of outdoor advertising. With Ballroom Group, the Group will rank first place among online marketers.\" — Ströer press release", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-3f3e-76f7-b9e2-43c6afc4c4ea", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.3, "w": 0.78, "x": 0.11, "y": 0.63 }, "kind": "source-note", "text": "Footnotes 111-123 detailing sources for the acquisition and divestment narrative.", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "6faf4d49-c80a-4784-af0b-3bf82b328272", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [], "arcBeats": [ { "to": 40, "from": 3, "beatId": "b3f52913-eba1-4212-8b6a-c784e421d7c9", "arcName": "Overcoming the Monster", "arcSlug": "overcoming-monster", "beatName": "Expose Contradiction", "beatSlug": null, "evidence": "Multiple sections expose contradictions in Ströer's financial reporting and governance.", "position": 0, "confidence": 0.8, "parentBeatName": null, "parentBeatSlug": null }, { "to": 62, "from": 20, "beatId": "3171857b-3930-46f5-9955-6defb6a606d6", "arcName": "Overcoming the Monster", "arcSlug": "overcoming-monster", "beatName": "Appendix Disclosure", "beatSlug": null, "evidence": "Appendices provide detailed disclosures supporting the critique.", "position": 1, "confidence": 0.8, "parentBeatName": null, "parentBeatSlug": null } ], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }