Known mainly in the Forex and online gaming worlds for his controlling interest in Playtech PLC (LON:PTEC), parent company of Retail Forex / CFD brokerage Markets.com, online entrepreneur Teddy Sagi has a number of other public companies in his portfolio.
One of those companies, Crossrider PLC (LON:CROS), recently put out a year-end trading update which disappointed investors, sending Crossrider shares down nearly 20% last week – leaving Crossrider shares more than 60% below their September 2014 IPO price of £1.03 (they’re now at £0.40).
Crossrider is a creator of digital ad platforms specializing in monetizing web and mobile media through the use of ‘big data’. The Company’s web and mobile platforms power ad networks, agencies and direct publishers and enable the delivery of relevant digital advertising through the analysis of big data – making online marketing significantly more efficient and cost effective.
A number of Retail Forex and online gaming companies use Crossrider’s technology solutions to deliver relevant advertising to targeted users.
The company’s co-founder and CEO Koby Menachemi actually comes from the online financial world. Menachemi served as Chief Technical Officer of online financial research site Seeking Alpha before setting up Crossrider in 2011, with backing from Teddy Sagi. Sagi continues to own about 73% of Crossrider.
Despite its share price woes, Crossrider does appear to be in good financial shape. The company did about $85 million of Revenues in 2015, earned EBITDA of $10 million, and has more than $70 million of cash on its balance sheet. However with a market cap of about $80 million at its current share price, Crossrider is trading at not much more than the value of its cash in the bank.
Alongside Crossrider’s year-end Trading Update, the company announced that Menachemi – who has led Crossrider since its inception – will be stepping down as CEO to pursue ‘other opportunities’. It is unclear if the negative reaction of Crossrider’s shares to the Trading Update was a result of Menachemi’s surprise resignation, or of the company’s lukewarm outlook for 2016 stating that:
whilst the Board expects FY2016 revenue and earnings to be ahead of FY2015 its current expectation is that any such increase will be modest.
Probably a little of both.
Crossrider’s full Trading Update for 2015 can be seen here.