{ "docId": "019dd923-622c-750b-8b99-781d6376c0a8", "docSlug": "9250edf61831", "documentTitle": "MSCI Inc. (MSCI)", "authorId": "54_Spruce_Point_Capital", "authorName": "Spruce Point Capital Management", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2024-01-17 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 17, "pageCount": 123, "prevPage": 16, "nextPage": 18, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "overcrowded", "nDataPoints": 40, "notes": "Uses a 'CFO quote vs. data' structure to highlight a discrepancy in business performance.", "elementsJson": [ "headline_text", "paragraph", "quote_block", "data_table", "callout_box" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b99-781d6376c0a8/17", "deckHref": "/decks/019dd923-622c-750b-8b99-781d6376c0a8", "deckJsonHref": "/decks/019dd923-622c-750b-8b99-781d6376c0a8.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b99-781d6376c0a8#slide-17", "components": [ { "bbox": { "h": 0.12, "w": 0.18, "x": 0.81, "y": 0.78 }, "kind": "callout", "text": "Large YoY decline absent price increases", "attrs": null, "subkind": "primary", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "8d983ef9-6e59-45bc-b78f-74f0293c8e8e", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "metric", "text": "New Recurring Subscription Sales: -38.6%", "attrs": null, "subkind": "primary", "toolName": "Quantification", "toolSlug": "quantification", "confidence": null, "componentId": "019dd953-1ac4-74a6-be20-df273656bd4e", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.96, "x": 0.02, "y": 0.17 }, "kind": "paragraph", "text": "Absent price increases, we calculate that year-over-year new recurring sales would have plummeted in the -40% range in 2023. The CFO said MSCI was successful rolling out higher prices. However, is this true if clients are pushing back while MSCI's total customer count declined for the first time?", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "f9f6419a-1ccb-47ca-af54-bfd73cdc3126", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.13, "w": 0.86, "x": 0.12, "y": 0.28 }, "kind": "quote", "text": "We've been successful at rolling out higher price increases... Clearly, there are varying degrees of pushback depending on the product and region and client type, and we are very cognizant of the fact that many of our clients are feeling pressure in the current environment.", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "2f7f9581-0f3b-4468-819d-d51aa530eb83", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "We've been successful at rolling out higher price increases, although, it's modest increases relative to what we've done in the past. I would say in the third quarter, price increases contributed a comparable amount to what they've contributed in recent quarters. So across all product areas, price increases represented mid- to high 30% of new recurring sales within the index, it was 40% plus which is consistent with what we've seen in recent quarters. Clearly, there are varying degrees of pushback depending on the product and region and client type, and we are very cognizant of the fact that many of our clients are feeling pressure in the current environment. — CFO, Q3'23 Earnings Call", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-1ac4-74a6-be20-dadca38b5887", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.9, "x": 0.02, "y": 0.96 }, "kind": "source-note", "text": "Source: MSCI financial reports, Q3'23 Conference Call and Spruce Point analysis based on 40% of new index subscriptions from price increases and 35% for each other segment.", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "4fdc5aac-43e1-490e-a5ac-882f5606674b", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.48, "w": 0.78, "x": 0.02, "y": 0.45 }, "kind": "table", "text": "New Recurring Subscription Sales table showing 2022, Q1'23, Q2'23, Q3'23 data for Index, Analytics, ESG & Climate, and All other-Private segments.", "attrs": null, "subkind": "data", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "2887fe93-787d-414c-b42f-07e1bcfd6e0b", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.48, "x": 0.32, "y": 0.04 }, "kind": "title", "text": "Is MSCI Price Gouging Clients?", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "0eb13fb8-e6b0-4f74-9452-4e4a9fae13ff", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "ceo-quote-contradiction", "slug": null, "matchId": "2f4b9d9a-a0dd-41ea-b938-95c754d33fcf", "evidence": "Contrasts CFO earnings call quote with internal analysis of sales data.", "confidence": 1 } ], "arcBeats": [ { "to": 123, "from": 8, "beatId": "d662b123-aabd-40a9-9b1e-07f3af79864c", "arcName": "Overcoming the Monster", "arcSlug": "overcoming-monster", "beatName": "Expose Contradiction", "beatSlug": null, "evidence": "Most slides aim to reveal contradictions or issues with MSCI's reporting, strategy, or performance.", "position": 0, "confidence": 0.8, "parentBeatName": null, "parentBeatSlug": null }, { "to": 76, "from": 4, "beatId": "5c97492b-d3b4-46d9-8bf6-e685ece94ea2", "arcName": "Overcoming the Monster", "arcSlug": "overcoming-monster", "beatName": "Cite Precedent", "beatSlug": null, "evidence": "Spruce Point cites its track record and various precedents to support its claims.", "position": 1, "confidence": 0.8, "parentBeatName": null, "parentBeatSlug": null } ], "loops": [ { "to": 123, "from": 1, "name": "Cost Of Inaction", "slug": "27-cost-of-inaction", "bestFor": "Urgent budget requests, compliance, risk mitigation", "matchId": "96af0651-6de6-4b30-ba3b-77cee8001437", "evidence": "The loop is implicit, as the document builds a case for selling MSCI shares.", "position": 0, "objective": "Highlight the cost of inaction for investors not selling MSCI shares", "structure": "The Status Quo -> The Hidden Costs Accumulating -> The Future State of Inaction -> The Tipping Point", "confidence": 0.7, "description": "Quantify what happens if the audience does nothing" }, { "to": 66, "from": 14, "name": "Iceberg", "slug": "10-iceberg", "bestFor": "Consulting, complex problem solving, organizational change", "matchId": "135dbc3a-3938-4134-b2a9-cd049699de43", "evidence": "The document uncovers potential issues beneath the surface of MSCI's deals.", "position": 1, "objective": "Reveal hidden issues with MSCI's acquisitions and alliances", "structure": "The Symptom (Visible) -> The System (Hidden) -> The Root Cause", "confidence": 0.6, "description": "Reveal that the visible problem is merely a symptom of a deeper root cause" } ], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }