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  "documentTitle": "Momo, Inc. (MOMO)",
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  "authorName": "Ben Axler",
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  "sourceTypeLabel": "Short seller",
  "presentationDate": "2018-06-27 00:00:00",
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      "text": "Given the shifting nature of the Live Video strategy and very limited financial and KPI transparency for the segment, Spruce Point relied on 50 detailed Mandarin based interviews with members of the Live Stream Ecosystem (Agency/Broadcaster/Users/Advertisers) to develop a forward view of Momo’s prospects.",
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      "text": "Cash Rebates: Several agencies discussed that they also had the option of receiving cash rebates for purchasing virtual currency. It is unclear if these transactions are considered costs of revenues",
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      "text": "A majority of agencies we spoke with indicated that they were experimenting with other platforms where there are reputations for bigger spenders (e.g., Now) or the popularity of the channel is growing rapidly (e.g., Douyin). A good portion of the agencies expressed some concern over Momo's outlook and the value in diversifying platforms. We expect Momo's market share to slip over the coming 18 months",
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      "text": "Most of the competing platforms maintain 40%-55% of virtual currency gifting, and emerging threat Now maintains only 30%-40%. We expect Momo's cost of revenues to move up materially over time to match industry levels (50%-70%)",
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      "text": "Momo will now face formidable new competition in the live streaming space from well funded public companies and private companies with the backing of Tencent, Baidu, Alibaba and Bytedance",
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      "text": "Momo Owned Agencies: When we asked agencies about whether or not Momo controls its own agencies we got a range of responses from \"No\" to their biggest agency is their own. Most folks \"in the know\" were reluctant to provide specifics, but indicated that this is particularly the case with some of their largest agents. This would indicate related party transactions and again the accounting treatment remains unclear",
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      "text": "Fee Sharing: Momo appears to tier fee sharing with Agencies based on their size and allegiance. Momo's take ranges from a high of 60% to a low of 50% in our sample",
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      "text": "Free Virtual Gifts: The majority of our sample indicated that Momo didn't provide them with free virtual gifts. However, several agencies referenced what one referred to as a \"commercial secret\" that Momo provides free gifts based on the scale, ranking and exclusivity of an agency. It is unclear how these transactions are recognized from an accounting perspective",
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      "text": "Given the shifting nature of the Live Video strategy and very limited financial and KPI transparency for the segment, Spruce Point relied on 50 detailed Mandarin based interviews with members of the Live Stream Ecosystem (Agency/Broadcaster/Users/Advertisers) to develop a forward view of Momo's prospects.",
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      "text": "Fundamental Challenges On The Horizon For Momo's Live Video Segment (Cont'd)",
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      "text": "Undisclosed Insights Into Momo Live Video Strategy",
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