[Nick Hargrave]

I attended the AGM yesterday, 1 of just 3 individual investors that attended alongside institutional representatives from Canaccord and Rathbones, Markt Brady from Spark Advisory (company NOMAD), Fred Walsh (company broker Stifel) and 3 bard members – David Reeeves, James Draper, Lisa Hau and Donald Stewart.

Following the recent EGM requisition action, the aim was be positive and allow the company to talk about their successes with a view to building a more open and collaborative engagement going forward. The board came into meeting looking outwardly nervous, not knowing what to expect, but they warmed up and we had a good discussion as the meeting went on

During the meeting I tried to tease out some EA news but they are still keeping their cards close to their chest given the size of the client and their strict NDAs. We discussed the new NFL partnership with the NFL Commanders to understand the revenue model – BIDS have provided a rate card for all of the inventory in the virtual stadium for the Commanders that they can sell to their sponsors (i.e. the NFL club itself is effectively the reseller for the inventory) and BIDS receive a 15-20% commission on the rate card. The club retains any sponsorship value they generates above the rate card value. BIDS are already receiving interest from additional NFL clubs.

We discussed the market expectations for 2023 (£15m revs) and James stated he was “very confident” on achieving, though we caution that we’ve heard that before so the proof really will be in the pudding and with quarterly advertising budgets they are only now starting to see Q4 budgets coming in.

The key conversation was around their competitive position and scale relative to Anzu, who recently raised $48m at what is believed to be a $200m valuation and why the gulf in valuation to BIDS. James is clearly frustrated with the valuation an AIM, noting that Anzu has the benefit of being private and so doesn’t have a public reference value and noted that their CEO was a very good salesman. THe valuation on AIM prevents many institutional investors from investing as they have minimum market cap and % ownership restrictions. James stated that Anzu are the only competitor they now see at significant publisher pitches, no longer seeing Frameplay, Adverty or Admix and believes there is lots of room for both BIDS and Anzu to succeed.

After the formal AGM I had a one on one chat with with James. I talked to him about controlling the public narrative, how the requisition was a missed good news story, concerns over dilutive funding and Azerion. Obviously I didn’t get any new info but again he warmed up a lot. He’s obviously frustrated with the valuation that makes funding harder but he still believes in the huge potential of the business. It sounds like the Azerion relationship cannot be revived and they are going all out on the legal claim to recoup what they believe they are owed. They are expecting the defence from Azerion shortly and will then be in a better position to assess where they stand. Time will tell, but hopefully he will be a bit more open to some future thoughts at least.

In conclusion, we have succeeded in bringing about a greater focus on investor engagement at board level, reduced the board size and cost to something more reasonable, and hopefully reset the relationship to a more positive footing.

Topic