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  "documentTitle": "Momo, Inc. (MOMO)",
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  "authorName": "Ben Axler",
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  "presentationDate": "2018-06-27 00:00:00",
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      "text": "Management cited a decrease in tournament related bonuses as the key driver, but this was consistently rebuffed by every agency that we interviewed, including a Momo owned agency.",
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      "text": "In Momo's Q1 2018 results, cost of revenue as a % of Live Stream Revenue suddenly declined for the first time since Q4 2016. Management cited a decrease in tournament related bonuses as the key driver, but this was consistently rebuffed by every agency that we interviewed, including a Momo owned agency. Spruce Point finds this change in trend counterintuitive given a growing focus on agencies.",
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      "kind": "quote",
      "text": "We scaled back the revenue oriented operating efforts around the quarterly competition event. Therefore, cost on bonus or rewards offered to broadcasters during the March tournament, was significantly reduced. - Momo CFO Jonathan Zhang on Q1 2018 Earnings Call",
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      "text": "In November, we rolled out a trial plan, whereby the qualified agencies are provided with a different level of additional cash incentives if they reach certain growth targets. Although such incentives will likely cause cost in revenue to continue to fluctuate in the future, we believe it will better motivate the agencies and individual broadcasters to invest and grow their business within our ecosystem, which in turn will grow ours.- CFO Johnathan Zhang Q4 2017 Earnings Call",
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      "text": "In November, we rolled out a trial plan, whereby the qualified agencies are provided with a different level of additional cash incentives if they reach certain growth targets. Although such incentives will likely cause cost in revenue to continue to fluctuate in the future, we believe it will better motivate the agencies and individual broadcasters to invest and grow their business within our ecosystem, which in turn will grow ours. — CFO Johnathan Zhang Q4 2017 Earnings Call; We scaled back the revenue oriented operating efforts around the quarterly competition event. Therefore, cost on bonus or rewards offered to broadcasters during the tournament, was significantly reduced. — Momo CFO Jonathan Zhang on Q1 2018 Earnings Call",
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      "text": "Source: Spruce Point Consultant Interviews",
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      "kind": "table",
      "text": "Consultant Questions vs Response From Momo Owned Talent Agency",
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      "kind": "title",
      "text": "Red Flag 6: Recent Management Statements And Results Rebuffed By Agency Interviews",
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