Riverboat Mandelbaum: Perion Network (PERI) CEO All In

Steve Kanaval  |

On December 5th, 2015, CEO Josef Mandelbaum of Perion Network (PERI) decided to spend $180M on Undertone (beautiful ad's for beautiful brands) which was more than the value of the entire company. This is akin to pushing all chips to the middle of the table and going all in.

Obviously, the goal for Mandelbaum was to buy a supercool revenue line without stacking on too much debt, and integrate the company, and have the acquisition be immediately accretive. These numbers would eventually come due for Mandelbaum and yesterday's quarterly release (which incorporated revenue for this acquisition) hit the wire. The stock felt some pressure after the analyst Q&A, and Mandelbaum was quick to give guidance on his purchase of Undertone. Clearly, he is still all in.

Personally, I like Mandelbaum's riverboat gambling style, and he understands how Wall Street works, and he knows publicly traded companies can buy or build. Mandelbaum chose to buy. He said back in December “I’ve looked at maybe 100 companies over the past year, and this is one of the few that had scale, profitability, and a differentiated marketing position which was consistent with where we wanted to go”.

Below is a sample of and Undertone product: Learn more about the product here

Shares in Perion Network (PERI) sold off right before Christmas 2015 falling nearly 50% between the holiday and early February where it tested the $2 level in the stock. The company had a $168M valuation last I checked, down from pre-Undertone levels. But clearly "Riverboat Madelbaum" has a plan, and I love listening to company calls, it is refreshing for an analyst. Below is a chart inclusive of the last quarter.

So, flashing forward to the recent quarterly report CEO Mandelbaum had this to say on the call:

" To start, I am proud to say that our year-end financial results capped a very strong year for the Company. We surpassed our financial goals and made significant progress in further evolving our strategy. We were at the high end of our revenue and EBITDA guidance and exceeded non-GAAP net income guidance or both for the quarter and year.

We have significantly strengthened the Company by diversifying our revenue with the acquisitions of Undertone and MakeMeReach, which will represent close to 50% of total revenue in 2016, solidly positioning us in growth categories like mobile, social and video. The Company is in good health financially with the total cash amount of $60 million and a net financial debt position of roughly $39 million."

So we get to see this riverboat gambler walk through the portal of day to day execution, which I think will also be supercool. The whole thing is just a refreshing plunge into digital advertising and I'm rooting for "Riverboat Mandelbaum."

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Companies

Symbol Name Price Change % Volume
PERI Perion Network Ltd 9.01 0.51 6.00 1,287,914 Trade

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