A couple weeks ago we posted an article about Digital Turbine and its quest to rule the world of bloatware. The company has partnered with several large global carriers to preinstall its DT Ignite and DT IQ software which are meant to deliver personalized paid app recommendations on Android devices. The fact that Digital Turbine is publicly traded on the Nasdaq (ticker: APPS) adds an extra dimension to the saga, as investors tend to have strong opinions about controversial situations. Yesterday, Mako Research (a “private investor”, according to his bio) posted an article to stock market site Seeking Alpha detailing Digital Turbine’s ties to “stock manipulators” and proclaiming the company’s technology “obsolete.”
The report has caused APPS to fall to new lows, which will make it more difficult (and more expensive) for the company to raise additional capital if it needs to do so. The link to the full article is below. It’s long and very detailed, but here are some choice quotes.
On the company’s management and insiders:
I believe Digital Turbine is an extremely speculative and overvalued stock that will likely prove entirely worthless as the company’s products are unviable and the insiders involved with APPS have a long history of “securities fraud.” This report will also detail the rampant capital destruction that has occurred at Digital Turbine’s failed rollup… and how Digital Turbine’s accounting is suspect, with numerous warnings from the SEC and the auditor that itself has been repeatedly connected to accounting frauds.
On whether Google will “allow” DT Ignite to exist at all:
APPS has bet the farm on DT Ignite and I believe this current revenue ramp story will leave shareholders very disappointed as they realize APPS is actually closer to bankruptcy than it is to generating adjusted or non-adjusted profits…It’s clear that Google is right in the middle of disintermediating APPS and soon carriers will terminate their relationships with APPS because they can keep 100% of the revenue instead of sharing the revenue with APPS.
On why any user would want ongoing app recommendations from DT IQ:
APPS says that it will integrate iQ with DT Ignite to continuously evaluate the user’s activity and dynamically recommend applications for the lifetime of the device. This appears to be a serious invasion of privacy… The real question is, why would any user need to travel outside the native app store ecosystem to find an app that they need or want? Isn’t it easier to go to the main app store and simply search “hotels”? Doing so in both the App Store and Google Play Store yielded plenty of helpful results. Even if a user doesn’t know exactly what they want, they can browse plenty of pre-curated lists that rank applications based on their popularity or reviews.
You can read the full article on Seeking Alpha. Once you get down to the comments, you’ll see plenty of arguing and dissent, exactly what makes financial markets so interesting. We’ll know who’s right and who’s wrong soon enough.
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