AUTO
A Penance Dossier

AutoWeb, Inc. is a company that trades on the Nasdaq Global Select.
It’s a microcap at $64 million.
There are 13 million shares outstanding.
The float is 8.64 million shares.

It is 26% held by insiders (supposedly) and 21% owned by institutions (again, supposedly.)

So, what do they do?

Communications Services sector, Internet Content & Information industry.

Motherfucker, I said “WHAT DO THEY DO?”

They’re located in Tampa, FL. So, that’s cool. U.S. based Technology Company.

Bro.

They’re a digital marketing company for the automotive industry. They help retail dealers and manufacturers sell their cars online. They have a lead program, they do marketing, help with payments, and they have websites.

Great. Who cares?

Well, given the heat in the auto industry, specifically EV’s, and the fact that people don’t want to go to dealerships (or anywhere) because of the ‘vids (COVID 19), this particular company is incredibly useful and therefor can be expected to be profitable.

Fuckin’ makes so much sense.

As an aside,
I cannot stop looking at this fucking beautiful chart.
It looks exactly like CODX did the day I messed it up.
I will not botch the next one.

Earnings!

For some reason, AUTO reported quarter two earnings 22 days ago. That’s a bit late, I think.
Reporting earnings for Q2 on 8/05.
Q2 ended on June 30.
I guess penny stocks take longer?
I don’t know. Let’s find out!

Looks like, according to Investopedia, Earnings season begins about two weeks after the end of the quarter and usually ends about six weeks later.
So, a total of eight weeks.
Damn. So, about right now is when it ends and I was just being a jerk for not knowing that August 05 is smack dab in the middle of earnings season.

Maybe it takes a while for accountants to do stuff and have stuff audited and stuff.

Let’s look at earnings!

“Strong progress in turnaround.”
- CEO Jared Rowe

Indeed.
Down 10 million in revenue from Q2 of last year.
But also spending less in Ad Revenue.
Actually, had a higher margin this year than last year at this time.
Lost 3.6 million dollars less than usual.
Click traffic and volume down.

Were people not shopping for cars during Q2 for some reason??
Like, they were ascareda spending money or something??

FFS. Apply for unemployment and make more money than a nurse. Come on.

And then pages and pages of the CEO touting the glory of the company’s new practices.
Yay CEO.

In more recent times, AUTO put out another earnings report –

Oh! Just got saved. Still watching AUTO and I was thinking “omg. This could cup and handle again. I should get in.”
But aside from the fact that I’m not allowed to play stocks that I’ve lost on in a second day (brand new rule)
I also noticed that it was doing a pattern I don’t like.
Let me see if I can replicate it with letters:
Vr-
Kinda like that.
 Fuck. Hang on.

 

Anyway, where was I?

Right! So, recently (8 days ago on 08/19) AUTO put out another report for July.
Is that fair? Can they do that?
The fudge is this report?

“AUTO is reporting select preliminary unaudited results for July.”
Okay. So, you wanna come out early on your Q3 Earnings Report for a little brag?
Whatcha got to brag about?

Total revenues down from last year, but profit is up and margins are up and Net Income loss is down. Hm. Positive EBIDTA.

For those of you just joining us, EBITDA means
Earnings Before Interest Tax Debt America.
Not America. Hang on.
Oh, okay. Earnings Before Interest, Taxes, Depreciation, and Amortization.
So, basically, did you make money before the cost of doing business hit you?
And the unaudited answer for AUTO is:
Yes.
Maybe for the first time ever.
Also, they have double the money this year than they had last year.
Good for them.

And, last and possibly least – they put out a PR an hour ago (so it’s not responsible for the run) that says they’re gonna be in the Big Conference coming up.
The Gateway conference

And since this is punishment for my misdeeds, I’m now going to learn about this god damn conference that I’ve heard soooo much about lately.
Seriously. It’s always in PR’s. What the fuck is this thing?

Jesus. You can’t just google it. There’s like a thousand “Come Find God” conferences on the front page and they’re all called Gateway Conference.

Alright. Found it.
It’s an annual invite-only conference that brings together compelling companies and the nation’s top investors and analysts.

It’s a fucking investor’s circle jerk conference.
It’s
such a big deal.
You don’t even know.

Okay, so really AUTO ran because of earnings, 52 week highs, chart setup, and it was a good idea.

I mean, if you look at the chart, it had a good run on August 5^th.
It held up. It ran again.
It held up. It ran again.
They dropped their braggy ass, unaudited, preliminary July report and it ran again.

I think the chart has reached its crescendo and will pull back significantly, but I’ll keep watching because apparently it can do stuff including make my favorite pattern.

Don’t worry. I’m not letting myself off that easy.
MORE FUNDAMENTALS!
YOU WANNA LOSE ON A WINNING TRADE YOU LITTLE BITCH??
MORE FUNDAMENTALS!!

(I already did TA and how I fucked that up. It’s on another post)

Profit Margin sucks ass (but less in July.)
Quarterly growth, year over year, is negative which means the company is shrinking.
Earnings Per Share is negative because they’re losing money.
They owe 12 million. They have 5.2 million.
And they don’t pay dividends.

I am shocked – SHOCKED I TELL YOU – that they don’t have a shelf offering or warrants.
I fucking promise you that is coming.

Tomorrow.

Just kidding. I don’t know when. But bet your ass.

Let’s look at the CEO and then I’ll let myself go watch video lessons for 7 hours.

Jarde Rowe.
Linkedin profile set to private, so you have to be signed in to see it.
Sneaky bastard.

Awww… he looks friendly.

He makes $550k/year – base salary.
Received $942k in stock options as a bonus. Hmm… look out for that.
I guess that’d make me friendly, too.
It’s okay. I like ramen. c:

He’s got a bachelor’s degree and an MBA.
Been CEO since 2018.

Check out the dump in March 2018.
They hired this guy in April 2018.
Wonder why.

Well, google searches for ‘jared rowe fraud’ and ‘jared rowe convict’ turned up plenty of interesting stuff. But nothing relevant.

Alright.
I give this stock a C- with a likely offering coming to a stock market near you.

Whatever the fuck that means.