SHORT  -  DV – DoubleVerify      $27.60

Some bullets on why DV is an interesting short:

• ·         A tactical short trade, for the short-term… 
  
  
• ·        SaaS company in media measurement, $4.4B mkt cap, $4.3B EV
  TTM:                   10x sales, 83x P/E, 50x Ebitda
  Est FY ’24:           6.4x sales, 51x P/E, 20x Ebitda  (assumes revenue doubles and margins expand)
  
  
• ·         Catalyst 1: Quietly on Fri, after the close, DV filed an offering, with no proceeds to the company, to sell 79.04 million shares or 48.19% of the company.
  
  
• ·         This offering accommodates the exit of their largest shareholder, Providence Equity Partners (48.19% owner), who holds it primarily in their fund # VII.
  
  
• ·         Previously, Providence Equity has sold down from 96 million shares or 66% pre-IPO.  Other pre-IPO PE holders have sold down such as Blumberg Capital (had 20m shs, now 14m), and Tiger Global (had 13.8m, now 2.8m).
  
  
• ·        Previous offerings were:

o   April 2021 IPO of 13.33 million shares at $27 per share. (Prov Eq sold, ~4.7 secondary shs)

o   Nov 2021 “no proceeds” secondary of 8m shares at $31.25 (Prov Eq & Mgmt sold)

o   Float is now ~69.7m shares, out of 164m outstanding… Thus, the 79.04m share offering represents a 113% increase in the float.  At $27/share, that’s ~$2.1 billion that the market needs to absorb in the near term. 

• ·         Just announced (not relevant, but I’m giggling at the tv coverage):  Kim Kardashian has to pay $1.26m to settle with the SEC for undisclosed compensation in a crypto promotion.  

  Catalyst

  as above... roadshow marketing to commence soon.