{ "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": 50, "pageCount": 70, "prevPage": 49, "nextPage": 51, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "overcrowded", "nDataPoints": 2, "notes": "The slide uses quotes from earnings calls to highlight the shift in strategy and the contradiction between past and present business models.", "elementsJson": [ "headline_text", "paragraph" ], "metadataConfidence": 0.95, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b98-72ad4dd9da96/50", "deckHref": "/decks/019dd923-622c-750b-8b98-72ad4dd9da96", "deckJsonHref": "/decks/019dd923-622c-750b-8b98-72ad4dd9da96.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-72ad4dd9da96#slide-50", "components": [ { "bbox": null, "kind": "callout", "text": "These above paragraphs encapsulate the endeavor that Momo is now undertaking to transform its brand and content from an anonymous hook-up and cam girl site to a social media platform focused on delivering professional entertainment (and marketing opportunities).", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-14dd-72ca-b978-9d552cc2b997", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.1, "w": 0.9, "x": 0.05, "y": 0.8 }, "kind": "paragraph", "text": "These above paragraphs encapsulate the endeavor that Momo is now undertaking to transform its brand and content from an anonymous hook-up and cam girl site to a social media platform focused on delivering professional entertainment (and marketing opportunities). The magnitude and risk of this transition shouldn't be understated as Momo's historical revenues (and growth) have been partially tied to their legacy \"content\" and the user base that it attracted", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "00b84cbd-ff50-4c5e-9137-fdbd7f81c68e", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.2, "w": 0.9, "x": 0.05, "y": 0.6 }, "kind": "paragraph", "text": "Up until this point in time, management had continued to beat the drum of Momo being a location based anonymous social networking site with a large set of monetization opportunities. However, on the Q3'17 earnings call there was a sudden acknowledgement by CEO Tang Yan \"On the product side, one of the key hurdles that we had in improving the long-term user retention was the fact that our core use case, which was pretty much based on nearby people and instant messaging was kind of limited\". Momo management then doubled down on delivering a \"social and entertainment experience\" to capture the attention and wallets of the young Chinese", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "11d1380b-4dcb-4344-aa85-4461f68ca5a1", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.1, "w": 0.9, "x": 0.05, "y": 0.9 }, "kind": "paragraph", "text": "Momo's ability to execute this transition and growth strategy is up for debate and is anyone's guess. This will clearly be a tight rope act as evidenced by the recent acquisition of Tantan, a popular hook-up (and dating) site, that was questioned by an analyst for its strategic benefit on a recent conference call. On one hand, the acquisition makes sense in the hope that it further broadens Momo's MAU and introduces a more female oriented demographic. Conversely, there are no plans to integrate the platforms and recognize material synergies, as it likely reinforces the brand that Momo is trying to distance itself from", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "6e77e352-7841-44ca-ab06-f413aae5f27a", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.25, "w": 0.9, "x": 0.05, "y": 0.2 }, "kind": "paragraph", "text": "In an attempt to reposition Live Video to preserve market share and avoid the scrutiny of regulators, Momo introduced an agency based content improvement strategy. \"The goal is to set up the policies and incentive systems so that increasing number of quality agencies professional performers can feel motivated and driven enough to offer higher quality and more differentiated content through our platform.\" This is a tectonic shift from Q4 '16 when it was stated on the earnings call that the \"number one agency in December only represented somewhere around 3% of the total revenues from Live Video service and the Top 10 you know in aggregate represented somewhere around 16%.\" Very little transparency has been provided around the agency strategy or the anticipated impact to Live Video's financials", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "7015125c-a87b-4435-9a8e-cb4a8ccd9148", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.9, "x": 0.05, "y": 0.45 }, "kind": "paragraph", "text": "In addition to the proposed changes on the content side of Live Video, Momo also decided to introduce new use cases for the overwhelming majority of live streaming broadcasters that simply viewed it as a means of socializing with friends (rather than a talent based occupation). Momo once again introduced new products (radio, quick chat, quiz show, etc.), most free or without Momo taking a cut for the time being, in hopes of maintaining and attracting new users", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "d5b3ed58-6e7f-48e0-9343-38445e0e92f9", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "\"The goal is to set up the policies and incentive systems so that increasing number of quality agencies professional performers can feel motivated and driven enough to offer higher quality and more differentiated content through our platform.\" — Momo Earnings Call; \"On the product side, one of the key hurdles that we had in improving the long-term user retention was the fact that our core use case, which was pretty much based on nearby people and instant messaging was kind of limited\" — CEO Tang Yan", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-14dd-72ca-b978-a23aaef066a4", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.65, "x": 0.305, "y": 0.04 }, "kind": "title", "text": "The Dangerous Goal of Reinventing Momo's Live Video Business", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "87e76c88-636a-4a57-9603-3477d05f56e0", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "ceo-quote-contradiction", "slug": null, "matchId": "12c5776b-6138-469a-99f2-9f486b4945f9", "evidence": "Contrasting past earnings call statements with current strategic pivots.", "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": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }