{ "docId": "019dd923-622c-750b-8b98-72ad4dd9da96", "docSlug": "86dfa89096f8", "documentTitle": "Momo, Inc. (MOMO)", "authorId": "54_Spruce_Point_Capital", "authorName": "Ben Axler", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2018-06-27 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 12, "pageCount": 70, "prevPage": 11, "nextPage": 13, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "overcrowded", "nDataPoints": 0, "notes": "Uses red flag icons to denote specific areas of concern.", "elementsJson": [ "headline_text", "bullet_list" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b98-72ad4dd9da96/12", "deckHref": "/decks/019dd923-622c-750b-8b98-72ad4dd9da96", "deckJsonHref": "/decks/019dd923-622c-750b-8b98-72ad4dd9da96.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-72ad4dd9da96#slide-12", "components": [ { "bbox": null, "kind": "callout", "text": "Recent Key Performance Metrics And Financial Results Are In Disagreement With Industry Data And Feedback From Detailed Interviews With Live Streaming Talent Agents", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-14dc-7419-88cc-348bb928283e", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.92, "x": 0.05, "y": 0.66 }, "kind": "list", "text": "Recent Regulations Focused On Content Are Likely To Hit Elements Of Momo's \"Brand\" Of Live Streaming Particularly Hard", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "13452f22-f665-42cd-851b-c1f8f9833b48", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.92, "x": 0.05, "y": 0.16 }, "kind": "list", "text": "Recent Key Performance Metrics And Financial Results Are In Disagreement With Industry Data And Feedback From Detailed Interviews With Live Streaming Talent Agents", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "7ad4cc90-f88a-4782-8888-6e80dd421c36", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.89, "x": 0.08, "y": 0.73 }, "kind": "paragraph", "text": "New regulations were put in place during 2017 by the Ministry of Commerce (MOC) and the State Administration of Radio, Film and TV (SARFT) limiting the behavior of live streamers and raising accountability for platforms.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "12006c97-7c50-4395-9136-d6fefca4496f", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.89, "x": 0.08, "y": 0.81 }, "kind": "paragraph", "text": "Based on countless hours we've spent viewing Momo's website, it appears that Momo has limited interest/capability in shutting down violators of these policies.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "17378252-4185-4b7d-8f80-c52aa4108140", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.89, "x": 0.08, "y": 0.42 }, "kind": "paragraph", "text": "During the recent Q1'18 earnings call, Momo management also explained away a decrease in cost of revenues by stating that strength in non-event day revenue resulted in \"scaled back the revenue oriented operating efforts around the quarterly competition event.\"", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "2a1351fc-fcc0-44ad-a8a7-c1431050e3b9", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.89, "x": 0.08, "y": 0.35 }, "kind": "paragraph", "text": "The revenues of Beijing Mushang Culture Media, an undisclosed Momo talent agency, would seem to suggest that Momo has been much more dependent on agencies than previously portrayed.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "73a095d1-02f1-439e-9832-4df8e25c2c18", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.89, "x": 0.08, "y": 0.87 }, "kind": "paragraph", "text": "However, there is no need to take our word for it. Four of the agencies that we spoke with gave the unsolicited opinion that Momo has a reputation as a (sex) cam site.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "d2323d09-f5e4-472f-ae1e-3a3fca77f300", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.89, "x": 0.08, "y": 0.51 }, "kind": "paragraph", "text": "Spruce Point's research consultant specifically asked 11 agencies, including a Momo owned agency, if there was any change in tournament payouts, and was consistently told there was no such reduction in revenue or incentive removal.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "e0dc1aa3-3fa7-4782-982a-b425686d02cf", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.11, "w": 0.89, "x": 0.08, "y": 0.23 }, "kind": "paragraph", "text": "Momo's management recently reported record Monthly Active Users (\"MAU\") for Q1 2018. However, Analysys and QuestMobile data indicate that live stream industry MAU peaked six to twelve months back, and that Momo's MAU is well below stated levels.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "e1b4d067-1be8-4000-801b-0e464edaaf01", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.68, "x": 0.28, "y": 0.03 }, "kind": "title", "text": "Spruce Point Has Significant Concerns Regarding Multiple Red Flags Identified At Momo (Cont'd)", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "996ee6b9-8efc-4d91-bdf3-1f09ad08a017", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "fraud-exposure", "slug": null, "matchId": "7f9d6515-c67e-4657-9b13-927b8ae3e094", "evidence": "The slide explicitly contrasts management claims with external data and consultant interviews to suggest misrepresentation.", "confidence": 0.9 } ], "arcBeats": [ { "to": 69, "from": 7, "beatId": "2ed90acb-05ba-4602-8daa-c17fe790841b", "arcName": "Overcoming the Monster", "arcSlug": "overcoming-monster", "beatName": "Expose Contradiction", "beatSlug": null, "evidence": "Slides 7-69 systematically expose contradictions and red flags in Momo's business, including undisclosed charges, complex VIE structure, and regulatory risks.", "position": 2, "confidence": 0.8, "parentBeatName": null, "parentBeatSlug": null } ], "loops": [ { "to": 15, "from": 7, "name": "Aha Moment", "slug": "03-aha-moment", "bestFor": "Data-heavy sections, research findings, analytical arguments", "matchId": "e80fc9fe-eee3-4c63-9ecb-b5238ed599c0", "evidence": "Slides 7-15 reveal several red flags and concerns, creating an 'aha' moment for the audience.", "position": 0, "objective": "What are the key concerns with Momo's business?", "structure": "The Problem/Question -> What the Data Shows -> The Insight", "confidence": 0.8, "description": "Establish a tension, present data, then deliver the insight that changes everything" } ], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }