{ "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": 26, "pageCount": 95, "prevPage": 25, "nextPage": 27, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "overcrowded", "nDataPoints": 0, "notes": "The slide uses a callout-style layout to contrast executive statements with the premise of 'dodgy' disclosure.", "elementsJson": [ "headline_text", "paragraph", "quote_block" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b98-c99fec0ed8aa/26", "deckHref": "/decks/019dd923-622c-750b-8b98-c99fec0ed8aa", "deckJsonHref": "/decks/019dd923-622c-750b-8b98-c99fec0ed8aa.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-c99fec0ed8aa#slide-26", "components": [ { "bbox": null, "kind": "callout", "text": "The last quote from former CFO Meera Rao in Jan 2016 about new products not translating into higher ASPs or margins is very revealing.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd952-ee38-728b-98ca-d8e22d5ae196", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.95, "x": 0.03, "y": 0.00175 }, "kind": "paragraph", "text": "MPWR has historically reported >70% of its product family as DC to DC converters, and over time, has grown the category to >90% of sales. Yet, MPWR has forever claimed an inability to offer color on its ASPs. The last quote from former CFO Meera Rao in Jan 2016 about new products not translating into higher ASPs or margins is very revealing.....see next slide", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "cb1b0381-b8aa-4545-a000-1436b475c238", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.82, "x": 0.17, "y": 0.00885 }, "kind": "quote", "text": "CFO Neely: \"No, we don't (discuss ASPs) do that because we have so many different products with so many different price ranges it doesn't really come up with anything. Typically, we don't give a blended ASP because of the breadth of our products\" CEO Hsing: \"It is difficult for us and overall product line we're within a few percentage difference with our average.\"", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "3d507f28-80b3-4297-82f0-5088fa3faf17", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.82, "x": 0.17, "y": 0.00285 }, "kind": "quote", "text": "The way we roll out new products is that we usually -- once we have an idea and we know that technically we can do it, we go and approach our customers to see if there is an interest in the product and to ascertain how strong is their interest; and more importantly, even though there might be an interest, whether they would actually pay us a premium for it, because we have found out that you can introduce really interesting products for markets like smart phones, TVs, and while they might give customers a lot of benefits, it doesn't translate into higher ASPs or better margin for us. So we do go and verify that.", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "5f94a432-222c-42fd-9eec-8ddda8fbb3bd", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.82, "x": 0.17, "y": 0.0046500000000000005 }, "kind": "quote", "text": "We optimized our top loading as much as we can, but in terms of prices, we haven't seen any movement down. And the last part was ASPs? In terms of ASPs, we're not seeing any significant movement other than whatever would be the normal year-over-year price decreases.", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "9b3d8432-d4af-43a6-986e-8b4cf9014199", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.82, "x": 0.17, "y": 0.00615 }, "kind": "quote", "text": "Actually our ASPs are very stable throughout our years. So customer now is -- customers always ask for lower, lower, lower price, and I think the bigger issue for us is still dealing with the shipment allocation. We just gone through that, and our -- that's our biggest issue is with our -- the relation -- the biggest relationship issues with our customers.", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "bc6e39ee-fe74-473e-89e4-df00fd4a30cd", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.82, "x": 0.17, "y": 0.0076500000000000005 }, "kind": "quote", "text": "Actually, Evan, we don't talk about ASP, because it just depends on a product by product. And ASPs can actually go down and gross margin can go up, so it's not a very good indicator, so we never discuss ASPs directly.", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "fc8b6eed-abc6-4141-9463-441cae146315", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "\"The way we roll out new products is that we usually -- once we have an idea and we know that technically we can do it, we go and approach our customers to see if there is an interest in the product and to ascertain how strong is their interest; and more importantly, even though there might be an interest, whether they would actually pay us a premium for it, because we have found out that you can introduce really interesting products for markets like smart phones, TVs, and while they might give customers a lot of benefits, it doesn't translate into higher ASPs or better margin for us. So we do go and verify that.\" — Former CFO Meera Rao, Needham Conf Jan 2016", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd952-ee38-728b-98ca-ddfb52c60898", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.65, "x": 0.31, "y": 0.03 }, "kind": "title", "text": "Dodgy ASP Disclosure Despite Significant Product Concentration", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "c8ba200f-23c2-4716-bc3a-4a5b0a35d6d0", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "ceo-quote-contradiction", "slug": null, "matchId": "44949231-bc90-428a-b355-d84c9c67035a", "evidence": "The slide explicitly juxtaposes multiple executive quotes to highlight inconsistent explanations for not disclosing ASPs.", "confidence": 0.9 } ], "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": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }