Author Topic: RMBL - RumbleOn  (Read 19996 times)

cameronfen

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Re: RMBL - RumbleOn
« Reply #130 on: October 11, 2018, 09:33:48 AM »
So are you out of the stock LF?  I've still got 100 shares left.

Anybody know why they have an eBay motors logo on the homepage now?  Are they selling bikes on eBay motors?

I took some profits around $10.10 average.  Sold 80K of 100k shares.  Stock was up 10+ days straight.  I am long 33,000 shares and adding on any weakness.  Q3 numbers should be ~$25m based on the 100,000 offer announcement.  Also Joe Reece joining is interesting.  Serious experience in M&A and CST Brands was acquired/merged in a $4.4b transaction shortly after he joined that board.  I am in no way implying the same value here.  I believe he was strategically brought on board for a variety of potential reasons.

I'm of the belief that as long as the multiple is within reason, and the position is not sleep at night too large, you really have to hold these stocks. These types of stocks at inflection points are difficult to value.  I did trim my position which wasn't enormous to begin with, but if you dont hold on like after a double you are going to miss the 5% of stocks that are 5+ baggers, and considering 30% of these types of stocks the growth or profitability never comes and the stock goes down 25+%, you can't get a good return (maybe as good a return) if you dont have a possibility of a big right tail winner. 

I guess I should add, I only have 5% of my portfolio in this.  I'm not really responding to LFinvestor, but to the people that sell out after a quick double.  again everything imo and not a recommendation to do anything.
« Last Edit: October 11, 2018, 10:04:12 AM by cameronfen »


LFvalueseeker

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Re: RMBL - RumbleOn
« Reply #131 on: October 11, 2018, 10:10:13 AM »
So are you out of the stock LF?  I've still got 100 shares left.

Anybody know why they have an eBay motors logo on the homepage now?  Are they selling bikes on eBay motors?

I took some profits around $10.10 average.  Sold 80K of 100k shares.  Stock was up 10+ days straight.  I am long 33,000 shares and adding on any weakness.  Q3 numbers should be ~$25m based on the 100,000 offer announcement.  Also Joe Reece joining is interesting.  Serious experience in M&A and CST Brands was acquired/merged in a $4.4b transaction shortly after he joined that board.  I am in no way implying the same value here.  I believe he was strategically brought on board for a variety of potential reasons.

I'm of the belief that as long as the multiple is within reason, and the position is not sleep at night too large, you really have to hold these stocks. These types of stocks at inflection points are difficult to value.  I did trim my position which wasn't enormous to begin with, but if you dont hold on like after a double you are going to miss the 5% of stocks that are 5+ baggers, and considering 30% of these types of stocks the growth or profitability never comes and the stock goes down 25+%, you can't get a good return (maybe as good a return) if you dont have a possibility of a big right tail winner.

I agree with everything you're saying, however I still have scars from a few positions I was big in and watched all the profits fade away.  I was a bit over my skis on this position from the beginning and watching it go from $4.25 to $10.00, I wouldn't sleep at night if I didn't adjust the position size.  It is now a properly sized position for my portfolio.  My biggest issue with microcaps is unsophisticated mgmt teams that do really dumb things.  I was caught off guard on the capital raise RMBL did and thankfully it worked out and was the right decision.  I have been a shareholder of some incredible companies that have destroyed value through a variety of poor financings and ill advised capital markets decisions.  I have become more disciplined to take significant profits but it's mentally tough to watch winners continue to go up. 

globalfinancepartners

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Re: RMBL - RumbleOn
« Reply #132 on: October 26, 2018, 06:36:40 AM »

landstander

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Re: RMBL - RumbleOn
« Reply #133 on: October 26, 2018, 06:55:36 AM »
Yes. In Q2 they were estimating $100+ million for 2018 revenues. A significant drop. And while margin was higher than I expected, revenue was lower.

Haven't looked through the details and will be interested to hear the reasoning behind an expansion rather than focusing on the core business on the conference call later today.

Ismael

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Re: RMBL - RumbleOn
« Reply #134 on: October 28, 2018, 07:07:13 PM »
Their offer conversion rate and average sales price is coming in lower than previous quarters.  Will be interesting to see where the equilibrium settles.  Nice that the margin is expanding.  Still showing strong growth too.  Entering adjacent markets (both organically and acquisitively) makes sense.  Internet markets tend toward winner take all so hope they continue to spend aggressively to acquire customers and build a brand.  With the addition of Joe Reese I wonder if there is more industry consolidation in store… 

cameronfen

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Re: RMBL - RumbleOn
« Reply #135 on: October 29, 2018, 09:49:56 AM »
Their offer conversion rate and average sales price is coming in lower than previous quarters.  Will be interesting to see where the equilibrium settles.  Nice that the margin is expanding.  Still showing strong growth too.  Entering adjacent markets (both organically and acquisitively) makes sense.  Internet markets tend toward winner take all so hope they continue to spend aggressively to acquire customers and build a brand.  With the addition of Joe Reese I wonder if there is more industry consolidation in store…

Just some random thoughts.  Responding: I rather them be a big fish in a small pond than a small fish in a big pond (or many ponds which is even worse).  That being said, deal probably had good synergies and didn't look too expensive either. 

More thoughts: Even the low end of their guidance seems optimistic and it implies qoq revenue acceleration from 42% to 50%.  I think current growth is fine and I think management is trying to split the difference with the way to optimistic previous guidance (in hindsight, I drank the cool aid before).  That being said, they could easily juice up revenue by sacrificing margin (through giving higher apprasals) and it is nice (I think) to see they arent doing that. 

LFvalueseeker

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Re: RMBL - RumbleOn
« Reply #136 on: October 29, 2018, 10:55:51 AM »
I am chiming in so I don't get accused of disappearing.  I am still trying to understand this acquisition.  After a bit of time, I believed I had a firm grasp on the motorcycle market and all the aspects that made it interesting from an investment angle.  I am trying to understand the used auto market landscape and how Wholesale fits in and does 1+1=3 through the combination with RumbleOn.  Interested in other peoples thoughts. 

globalfinancepartners

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Re: RMBL - RumbleOn
« Reply #137 on: October 30, 2018, 05:59:09 AM »
One of the things that always confused me about their pitch was that this was billed as not being 'capital intensive' - not requiring much capital.  I guess they would say that because they only had a few key sites and everything else was outsourced to dealer-parters, auction-photo-inspection outfits, etc..  But they had to keep raising capital to fund growth, continually expanding their borrowing, continually selling new shares.  I get that they aim for very quick inventory turns, but they always had to finance that inventory and it is a revolving door right?  Growth means lots of capital tied up.

Not sure how their previous plan squares up with the money losing acquisition - but I suppose you can hope that it isn't really a cash money loser and that it comes with some complementary useful assets for the power sports biz.  Certainly looks like profitability is a ways off now.

Anybody know if they have successfully expanded into the rest of "power sports" like they kept saying?  Or are they still a motorcycle only outfit?

globalfinancepartners

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Re: RMBL - RumbleOn
« Reply #138 on: October 31, 2018, 01:17:43 PM »
New board member Joe Reese bought some stock from the company and some more in the open market -
https://www.sec.gov/Archives/edgar/data/1596961/000165495418011782/xslF345X03/section16.xml

edit - another director buying in both the PIPE and the open market -
https://www.sec.gov/Archives/edgar/data/1461836/000165495418011885/xslF345X03/section16.xml
« Last Edit: November 02, 2018, 04:29:31 AM by globalfinancepartners »