{
  "docId": "019dd923-622c-750b-8b98-c99fec0ed8aa",
  "docSlug": "1c836eeb374c",
  "documentTitle": "Monolithic Power Systems (MPWR)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Ben Axler",
  "documentKindSlug": "activist-deck",
  "documentKindLabel": "Activist deck",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2019-10-09 00:00:00",
  "orientation": "landscape",
  "aspectRatio": 1.3333334,
  "pageNumber": 12,
  "pageCount": 95,
  "prevPage": 11,
  "nextPage": 13,
  "slideType": "valuation_table",
  "function": "expose_contradiction",
  "density": "dense",
  "nDataPoints": 60,
  "notes": "Uses a peer benchmark table to justify the adjustment assumptions applied to the financial model on the left.",
  "elementsJson": [
    "headline_text",
    "callout_box",
    "valuation_table",
    "comparison_table"
  ],
  "metadataConfidence": 1,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b98-c99fec0ed8aa/12",
  "deckHref": "/decks/019dd923-622c-750b-8b98-c99fec0ed8aa",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b98-c99fec0ed8aa.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-c99fec0ed8aa#slide-12",
  "components": [
    {
      "bbox": null,
      "kind": "callout",
      "text": "As we've already shown: 1) MPWR's Chinese tax filings do not account for ~$262m of revenue, and 2) MPWR's inventory turnover metrics are ballooning and a significant industry outlier despite stable and steady gross margin growth that management touts.",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd952-ee38-728b-98c9-efaf7164f3c0",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "metric",
      "text": "inventory turnover: $265m",
      "attrs": null,
      "subkind": "primary",
      "toolName": "Quantification",
      "toolSlug": "quantification",
      "confidence": null,
      "componentId": "019dd952-ee38-728b-98c9-f23471f3e171",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.11,
        "w": 0.96,
        "x": 0.02,
        "y": 0.19
      },
      "kind": "paragraph",
      "text": "As we've already shown: 1) MPWR's Chinese tax filings do not account for ~$262m of revenue, and 2) MPWR's inventory turnover metrics are ballooning and a significant industry outlier despite stable and steady gross margin growth that management touts. If we assume that MPWR's inventory metrics should be in line with industry peers, and that $245 - $265m of revenue is overstated, it implies ~$93m of inventory is also overstated.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "9ec2447d-5fb8-4f62-8ee9-e9d3307f6159",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.03,
        "w": 0.35,
        "x": 0.52,
        "y": 0.92
      },
      "kind": "source-note",
      "text": "Source: Bloomberg. Long-term based on last 30 quarters",
      "attrs": null,
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "b3f81e7a-655c-451d-90ed-565347ae7c20",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.55,
        "w": 0.46,
        "x": 0.52,
        "y": 0.36
      },
      "kind": "table",
      "text": "Peer benchmark table comparing MPWR inventory metrics to industry average.",
      "attrs": null,
      "subkind": "data",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "d07bd1b6-fc11-41ac-b4eb-43df006b0f02",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.55,
        "w": 0.48,
        "x": 0.02,
        "y": 0.36
      },
      "kind": "table",
      "text": "Financial adjustment model showing LTM sales, COGS, and inventory adjustments.",
      "attrs": null,
      "subkind": "valuation",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "588e3c6c-0c45-4a0f-85ee-fba3d0b59f2b",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.65,
        "x": 0.31,
        "y": 0.03
      },
      "kind": "title",
      "text": "Mathematical Support For $245 - $265m of Potentially Overstated Sales",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "57cbf81f-e4ff-430f-bab5-dcc2b0a1cc04",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [
    {
      "name": "fraud-exposure",
      "slug": null,
      "matchId": "88d5ed35-7be9-4a69-b9be-20885f294a35",
      "evidence": "Uses financial modeling to expose potential revenue and inventory inflation.",
      "confidence": 0.9
    },
    {
      "name": "peer-benchmark",
      "slug": null,
      "matchId": "40ce1b9c-f109-44f8-98f3-07a17ec0228d",
      "evidence": "Compares company metrics against industry averages to highlight outliers.",
      "confidence": 0.95
    }
  ],
  "arcBeats": [
    {
      "to": 40,
      "from": 7,
      "beatId": "d8746476-9a97-4214-9f12-49d6bd9131a5",
      "arcName": "Problem-Agitate-Solution",
      "arcSlug": "problem-agitate-solution",
      "beatName": "Agitate (Make it worse)",
      "beatSlug": "problem-agitate-solution-agitate-make-it-worse",
      "evidence": "The document then agitates the problem, presenting numerous examples of accounting and disclosure red flags.",
      "position": 1,
      "confidence": 0.8,
      "parentBeatName": "Development",
      "parentBeatSlug": "development"
    }
  ],
  "loops": [
    {
      "to": 20,
      "from": 11,
      "name": "Iceberg",
      "slug": "10-iceberg",
      "bestFor": "Consulting, complex problem solving, organizational change",
      "matchId": "ad3628c0-3aed-426e-8797-d2edb57cbace",
      "evidence": "The document highlights numerous accounting and disclosure red flags, including discrepancies in revenue and inventory reporting.",
      "position": 0,
      "objective": "To reveal hidden risks and red flags in MPWR's financials",
      "structure": "The Symptom (Visible) -> The System (Hidden) -> The Root Cause",
      "confidence": 0.7,
      "description": "Reveal that the visible problem is merely a symptom of a deeper root cause"
    }
  ],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}