10 07-08 web 2.0 weekly
DESCRIPTION
Summer financing doldrums: After a very strong June (with total transaction value (excluding M&A) of $542.8 million from 66 transactions, averaging $8.4 million each), July has started very slowly with only one small financing announced. However, we have seen some large M&A transactions (see below). In comparison, total capital raised in July 2009 was $206.2 million, averaging $5.4 million over 38 deals. Excluding Dec 09 and Apr 10, the average monthly total is ~$270 million.Deals (M&A, Finance)Google, acquired ITA Software, search provider for the travel industry for $700 mm. infoGROUP, provider of business and consumer databases for sales leads, mailing lists, direct marketing, database marketing, e-mail marketing, and marketing research solutions, was taken private for $645 mm by CCMP Capital Advisers.GroupSpaces, a provider of web-based tools for sports clubs, university societies, organizations, and groups of friends or coworkers, raised $1.3 mm.Domain based online advertising services provider, OCTANE360, was acquired by Local.com for $10.9 mm. Negative price performanceThe Web 2.0 public company universe fell again this week, with 61% of companies seeing their market cap fall vs. 27% rising and 12% flat.TRANSCRIPT
www.mackieresearch.com
Web 2.0 Weekly
“Big Acquisitions, Little Financing”
Copyright © 2000-2010, Mackie Research Capital Corporation, All rights reserved
July 8, 2010
David Shore, CFA, MBA [email protected]
Damian Wojcichowsky, CFA 416.860.7652
This report has been created by Analysts that are employed by Mackie Research Capital Corporation, a Canadian Investment Dealer.For further disclosures, please see last page of this report.
www.mackieresearch.com
www.mackieresearch.com2
Key Developments (past week)
Deals (M&A, Finance) – Big Acquisitions, Little Financing
� Google, acquired ITA Software, search provider for the travel industry for $700 mm.
� infoGROUP, provider of business and consumer databases for sales leads, mailing lists, direct marketing, database marketing, e-mail marketing, and marketing research solutions, was taken private for $645 mm by CCMP Capital Advisers.
� GroupSpaces, a provider of web-based tools for sports clubs, university societies, organizations, and groups of friends or coworkers, raised $1.3 mm.
� Domain based online advertising services provider, OCTANE360, was acquired by Local.com for $10.9 mm.
Financial Results/Guidance/Partnerships/Product� Points International Ltd. (TSX:PTS) announced that it has formed a partnership with
The Mileage Company. The new partnership means that Airmiles UK members can now purchase miles for themselves or gift Airmiles to other members.
� RealNetworks Inc. (NasdaqGS:RNWK) is once again scaling back its operations and announced a restructuring of its operations which includes layoffs of 85 employees. The layoffs include a 25% reduction in its executive ranks and the reorganization seeks to streamline its technology and media services divisions. The company is now down to 1,365 employees from 1,700, with roughly 65 layoffs coming out of the Seattle office.
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Public Company Data
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Aggregate Public Data
Web 2.0 Public Companies Total Median Max Min# Companies 103 - - -
Market Cap (US$ mm) 74,460.8 67.2 30,629.6 1.2
Revenue (US$ mm) 23,139.7 56.0 3,057.7 0.0
1 Year revenue growth 2.5% 8961.6% -100.0%
EBITDA as % of revenue - 11.3% 63.1% -99.5%
Net cash (US$ mm) 9,273.3 3.3 1,841.1 -670.8
TEV/Revenue - 1.9x 47.4x 0.1x
TEV/EBITDA - 8.5x 45.6x 0.5x
P/E - 15.3x 90.4x 0.0x
Relative to 52 week high -42.9% -4.1% -95.6%
Source: CapitalIQ
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Public Company Distribution
By Sector By Country
Source: CapitalIQ
28
18
109
5 5
3 3 3 32 2 2 2
1 1 1 1 1 1 1 1
0
5
10
15
20
25
30
Ga
min
g
So
cia
l N
etw
ork
ing
Me
dia
Div
ers
ifie
d
Mobile
Ma
rketin
g
Infr
astr
uctu
re
SM
S/V
oic
e
Ente
rpris
e
Ad
vert
isin
g
Inte
rnet
Reta
il
Vir
tual W
orl
d
Datin
g
Mu
sic
Ve
rtic
al C
om
munit
ies
Sea
rch
Po
dca
stin
g
Lea
rnin
g
Vid
eo
Co
llab
ora
tio
n
Pay
ment
Fin
ancia
l S
erv
ices
0
5
10
15
20
25
30
35
40
45
50
Unit
ed S
tate
s
Cana
da
Chin
a
So
uth
Kore
a
Japa
n
Ta
iwa
n
Hong K
ong
Ge
rma
ny
Po
land
Au
str
alia
Un
ited
Kin
gdom
Italy
Fin
lan
d
Sw
ed
en
India
Ru
ssia
Mala
ysia
Sw
itz
erla
nd
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Valuation Dashboard – 1 Week
Rising
27%
Falling
61%
Flat
12%
Rising
35%
Falling
64%
Flat
1%
Rising
35%
Falling
65%
Flat
0%
Market Cap
Rising
44%
Falling
56%
Flat
0%
EV/Revenue
EV/EBITDA P/E
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Median EV/Revenue
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
3.0x
3.5x
4.0x
4.5x
5.0x5
/11
/20
09
5/1
8/2
00
95
/25
/20
09
6/1
/20
09
6/8
/20
09
6/1
5/2
00
96
/22
/20
09
6/2
9/2
00
97
/6/2
00
97
/13
/20
09
7/2
0/2
00
97
/27
/20
09
8/3
/20
09
8/1
0/2
00
98
/17
/20
09
8/2
4/2
00
98
/31
/20
09
9/7
/20
09
9/1
4/2
00
99
/21
/20
09
9/2
8/2
00
91
0/5
/20
09
10
/12
/20
09
10
/19
/20
09
10
/26
/20
09
11
/2/2
00
91
1/9
/20
09
11
/16
/20
09
11
/23
/20
09
11
/30
/20
09
12
/7/2
00
91
2/1
4/2
00
91
2/2
1/2
00
91
2/2
8/2
00
91
/4/2
01
01
/11
/20
10
1/1
8/2
01
01
/25
/20
10
2/1
/20
10
2/8
/20
10
2/1
5/2
01
02
/22
/20
10
3/1
/20
10
3/8
/20
10
3/1
5/2
01
03
/22
/20
10
3/2
9/2
01
04
/5/2
01
04
/12
/20
10
4/1
9/2
01
04
/26
/20
10
5/3
/20
10
5/1
0/2
01
05
/17
/20
10
5/2
4/2
01
05
/31
/20
10
6/7
/20
10
6/1
4/2
01
06
/21
/20
10
6/2
8/2
01
0
373839404040404042444545464646474850515150545556616161626666666565667070707073727167707271767477767979797978807981838283
Mu
ltip
le (
x)
Median Long-term average
# companies
Source: CapitalIQ
Revenue multiples down slightly, still
well below LT average
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Median EV/EBITDA
0. 0x
5. 0x
10. 0x
15. 0x
20. 0x
25. 0x
30. 0x
5/18/2009
5/25/2009
6/1/2009
6/8/2009
6/15/2009
6/22/2009
6/29/2009
7/6/2009
7/13/2009
7/20/2009
7/27/2009
8/3/2009
8/10/2009
8/17/2009
8/24/2009
8/31/2009
9/7/2009
9/14/2009
9/21/2009
9/28/2009
10/5/2009
10/12/2009
10/19/2009
10/26/2009
11/2/2009
11/9/2009
11/16/2009
11/23/2009
11/30/2009
12/7/2009
12/14/2009
12/21/2009
12/28/2009
1/4/2010
1/11/2010
1/18/2010
1/25/2010
2/1/2010
2/8/2010
2/15/2010
2/22/2010
3/1/2010
3/8/2010
3/15/2010
3/22/2010
3/29/2010
4/5/2010
4/12/2010
4/19/2010
4/26/2010
5/3/2010
5/10/2010
5/17/2010
5/24/2010
5/31/2010
6/7/2010
6/14/2010
6/21/2010
6/28/2010
7/5/2010
18 20 21 22 22 2121 2123 22 25 2223 23 25 26 26 25 2424 25 27 2829 32 3434 36 39 3738 39 38 4041 38 3838 42 41 4042 41 41 42 43 44 4444 47 49 4850 5151 49 50 48 4749
Multiple (x)
Median Long-term average
# companies
Source: CapitalIQ
EV/EBITDA multiples down, depressed below LT average
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Median P/E
0. 0x
5. 0x
10. 0x
15. 0x
20. 0x
25. 0x
30. 0x
35. 0x
5/18/2009
5/25/2009
6/1/2009
6/8/2009
6/15/2009
6/22/2009
6/29/2009
7/6/2009
7/13/2009
7/20/2009
7/27/2009
8/3/2009
8/10/2009
8/17/2009
8/24/2009
8/31/2009
9/7/2009
9/14/2009
9/21/2009
9/28/2009
10/5/2009
10/12/2009
10/19/2009
10/26/2009
11/2/2009
11/9/2009
11/16/2009
11/23/2009
11/30/2009
12/7/2009
12/14/2009
12/21/2009
12/28/2009
1/4/2010
1/11/2010
1/18/2010
1/25/2010
2/1/2010
2/8/2010
2/15/2010
2/22/2010
3/1/2010
3/8/2010
3/15/2010
3/22/2010
3/29/2010
4/5/2010
4/12/2010
4/19/2010
4/26/2010
5/3/2010
5/10/2010
5/17/2010
5/24/2010
5/31/2010
6/7/2010
6/14/2010
6/21/2010
6/28/2010
7/5/2010
19 19 18 18 19 1819 1820 20 20 1819 19 19 20 21 24 2323 24 25 2726 30 3132 31 33 3234 36 37 3939 38 3939 40 41 3839 39 40 37 37 35 3333 32 35 3536 3535 37 35 32 3433
Multiple (x)
Median Long-term average
# companies
Source: CapitalIQ
P/E multiples also down and below LT average
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Average EV/Revenue – by Sector
13.4
11.9
9.99.4
5.3 5.04.4 4.3
3.7 3.63.3 3.2
2.82.4 2.2 2.2
1.9 1.6 1.5 1.3
0.3
-
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0In
frastr
uctu
re
Virtu
al W
orld
Div
ers
ifie
d
Learn
ing
Socia
l N
etw
ork
ing
Mobile
Music
Mark
eting
Vert
ical C
om
munitie
s
Searc
h
Gam
ing
SM
S/V
oic
e
Podcasting
Colla
bora
tion
Advert
isin
g
Media
Inte
rnet
Reta
il
Ente
rprise
Vid
eo
Dating
Fin
ancia
l S
erv
ices
2 1 7 1 8 4 2 4 1 1 21 3 1 1 3 9 2 3 1 2 1# Companies
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Average EV/EBITDA – by Sector
45.6
38.5
17.715.8
11.5 11.3 11.2 10.98.9 8.7
6.8
-
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
50.0
Fin
ancia
l S
erv
ices
Searc
h
Mobile
Ente
rprise
Gam
ing
Div
ers
ifie
d
Socia
l N
etw
ork
ing
Inte
rnet
Reta
il
Media
Colla
bora
tion
Mark
eting
1 1 3 2 14 5 6 2 6 1 2# Companies
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Average P/E – by Sector
87.8
53.6
37.9
33.8
26.2
18.9
15.312.9 12.5
-
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
Internet Retail Enterprise Collaboration Diversified Social
Networking
Marketing Advertising Gaming Media
2 3 1 9 18 5 3 28 10# Companies
www.mackieresearch.com13
47
2625
1615
1312
11 11 109 9
8 7 7 75 5
5 4 4 4 4 3 3 3 3 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 0 0 0 0 0 0 0 0 0 0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
50.0
NeXplore Corporation
SpectrumDNA, Inc.
SocialGO PLC
Tencent Holdings Ltd.
GeoSentric Oyj
Paid Inc.
Worlds.com Inc.
Gree, Inc.
Beyond Commerce, Inc.
MOKO.mobi Limited
Lingo Media Corporation
Chinese Gamer International
TransGaming, Inc.
DigitalPost Interactive, Inc.
Fluid Music Canada, Inc.
Dena Co. Ltd.
HUGHES Telematics, Inc.
Accelerize New Media, Inc.
Mixi, Inc.
Changyou.com Limited
WebMediaBrands Inc
SK Communications Co., Ltd.
Frogster Interactive Pictures AG
Taleo Corp.
Motricity, Inc.
Wizzard Software Corporation
Kingsoft Corporation Limited
iseemedia Inc.
Open Text Corp.
ePro Ltd.
Modern Times Group Mtg AB
NEOWIZ Games Corporation
XING AG
Sohu.com Inc.
Score Media Inc.
Velti Plc
Shutterfly, Inc.
UOMO Media, Inc
PNI Digital Media Inc.
GungHo Online Entertainment, Inc.
Myriad Group AG
ValueClick, Inc.
Platforma Mediowa Point Group S.A.
HanbitSoft, Inc.
Unilava Corporation
Webzen Inc.
NeuLion Incorporated
YD Online Corp.
Gamania Digital Entertainment Co., Ltd.
Spark Networks, Inc.
Hutchison Telecommunications Hong Kong Holdings Ltd.
SNAP Interactive, Inc.
Ynk Korea Inc.
Oriented Media Group Berhad
NetDragon WebSoft, Inc.
AQ Interactive, Inc.
Internet Group SA
OAO RBC Information Systems
Points International Ltd.
The New York Times Company
TheStreet.com, Inc.
Northgate Technologies Limited
Uniserve Communications Corp.
DADA SpA
IAC/InterActiveCorp.
United Online, Inc.
CDC Corp.
AOL, Inc.
GigaMedia Ltd.
Glu Mobile, Inc.
Cyberplex Inc.
Tree.Com, Inc.
Actoz Soft Co., Ltd.
Openwave Systems Inc.
GameOn Co Ltd.
Jumbuck Entertainment Limited
RealNetworks Inc.
Asknet AG
Yippy, Inc.
Mobile Data Corp.
EV/Revenue Ranking
Source: CapitalIQ
NeXplore has highest revenue multiple at 47x
www.mackieresearch.com14
45.6
38.537.0
30.7
25.825.8
22.2
19.018.718.316.9
15.615.514.213.813.8
12.411.810.4
9.5 8.7 8.6 8.5 8.3 8.1 7.8 7.6 7.6 7.5 7.3 6.9 6.8 6.5 6.2 6.1 5.9 5.4 4.9 4.6 4.43.5
2.0 1.9 1.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
50.0
Tree.Com, Inc.
SK Communications Co., Ltd.
HanbitSoft, Inc.
Tencent Holdings Ltd.
Motricity, Inc.
Taleo Corp.
Frogster Interactive Pictures AG
Mixi, Inc.
Gree, Inc.
Chinese Gamer International
Myriad Group AG
AQ Interactive, Inc.
Modern Times Group Mtg AB
Shutterfly, Inc.
Dena Co. Ltd.
TheStreet.com, Inc.
Score Media Inc.
YD Online Corp.
Openwave Systems Inc.
Platforma Mediowa Point Group S.A.
Open Text Corp.
IAC/InterActiveCorp.
Gamania Digital Entertainment Co., Ltd.
DADA SpA
XING AG
GungHo Online Entertainment, Inc.
PNI Digital Media Inc.
Velti Plc
NEOWIZ Games Corporation
Uniserve Communications Corp.
NetDragon WebSoft, Inc.
Spark Networks, Inc.
Changyou.com Limited
Kingsoft Corporation Limited
ValueClick, Inc.
CDC Corp.
Hutchison Telecommunications Hong Kong Holdings Ltd.
The New York Times Company
Sohu.com Inc.
Cyberplex Inc.
United Online, Inc.
AOL, Inc.
Actoz Soft Co., Ltd.
GameOn Co Ltd.
EV/EBITDA Ranking
Excluding EV/EBITDA > 100xSource: CapitalIQ
Tree.com leads the group at 45.6x
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90.487.8
58.2 56.5
49.1
41.037.9 36.4
31.4 30.7 29.725.3 24.7 23.5
17.6 16.8 15.3 14.3 14.2 13.0 12.9 11.3 10.4 9.5 9.3 8.05.1 3.3 2.2 2.0 1.8 1.1
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
ePro Ltd.
Shutterfly, Inc.
Points International Ltd.
Mixi, Inc.
CDC Corp.
Tencent Holdings Ltd.
Open Text Corp.
Gree, Inc.
NetDragon WebSoft, Inc.
Gamania Digital Entertainment Co., Ltd.
Dena Co. Ltd.
Frogster Interactive Pictures AG
Chinese Gamer International
Velti Plc
NEOWIZ Games Corporation
Hutchison Telecommunications Hong Kong Holdings Ltd.
Cyberplex Inc.
ValueClick, Inc.
The New York Times Company
DADA SpA
Sohu.com Inc.
Kingsoft Corporation Limited
AOL, Inc.
Changyou.com Limited
GameOn Co Ltd.
United Online, Inc.
Uniserve Communications Corp.
Jumbuck Entertainment Limited
Netease.com Inc.
Giant Interactive Group, Inc.
Shanda Interactive Entertainment Ltd.
Perfect World Co., Ltd.
P/E Ranking
Source: CapitalIQ
ePro has the highest P/E at 90.4x
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Total Market Capitalization
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
7/13/2009
7/20/2009
7/27/2009
8/3/2009
8/10/2009
8/17/2009
8/24/2009
8/31/2009
9/7/2009
9/14/2009
9/21/2009
9/28/2009
10/5/2009
10/12/2009
10/19/2009
10/26/2009
11/2/2009
11/9/2009
11/16/2009
11/23/2009
11/30/2009
12/7/2009
12/14/2009
12/21/2009
12/28/2009
1/4/2010
1/11/2010
1/18/2010
1/25/2010
2/1/2010
2/8/2010
2/15/2010
2/22/2010
3/1/2010
3/8/2010
3/15/2010
3/22/2010
3/29/2010
4/5/2010
4/12/2010
4/19/2010
4/26/2010
5/3/2010
5/10/2010
5/17/2010
5/24/2010
5/31/2010
6/7/2010
6/14/2010
6/21/2010
6/28/2010
7/5/2010
98 98 98 98 98 98 98 98 97 98 98 98 98 99 99 99 99 99 99 99100100100100100100100100100100100100101102102102102102102102102102102102102102102102102103103103
(US$m)
# companies
Source: CapitalIQ
Total market cap drops $1.8 bn to $74.5 bn
www.mackieresearch.com17
Total Market Cap – by Sector
-
5,000.0
10,000.0
15,000.0
20,000.0
25,000.0
30,000.0
35,000.0
40,000.0D
ivers
ifie
d
Gam
ing
Media
Socia
l N
etw
ork
ing
Colla
bora
tion
Ente
rprise
Mark
eting
Mobile
Inte
rnet
Reta
il
Searc
h
Music
SM
S/V
oic
e
Dating
Fin
ancia
l S
erv
ices
Advert
isin
g
Vid
eo
Virtu
al W
orld
Vert
ical C
om
munitie
s
Paym
ent
Infr
astr
uctu
re
Learn
ing
Podcasting
9 28 10 18 1 3 5 5 2 1 2 3 2 1 3 1 2 1 1 3 1 1# Companies
Nine Diversified companies totaling $35 bn in market cap
www.mackieresearch.com18
Market Cap Ranking
0
1,000
2,000
3,000
4,000
5,000
6,000
Tencent H
old
ings L
td.
Nete
ase.c
om
Inc.
Dena C
o. Ltd
.G
ree, In
c.
Modern
Tim
es G
roup M
tg A
BIA
C/Inte
rActiv
eC
orp
.S
handa Inte
ractiv
e E
nte
rtain
ment Ltd
.A
OL, In
c.
Open T
ext C
orp
.G
iant In
tera
ctiv
e G
roup, In
c.
Sohu.c
om
Inc.
Changyou.c
om
Lim
ited
The N
ew
York
Tim
es C
om
pany
Perf
ect W
orld C
o., L
td.
Hutc
his
on T
ele
com
munic
atio
ns H
ong K
ong H
old
ings
Tale
o C
orp
.V
alu
eC
lick, In
c.
Mix
i, In
c.
Chin
ese G
am
er
Inte
rnatio
nal
NE
OW
IZ G
am
es C
orp
ora
tion
Shutterf
ly, In
c.
SK
Com
munic
atio
ns C
o., L
td.
Kin
gsoft C
orp
ora
tion L
imite
dU
nite
d O
nlin
e, In
c.
RealN
etw
ork
s Inc.
Motr
icity
, In
c.
Gam
ania
Dig
ital E
nte
rtain
ment C
o., L
td.
GungH
o O
nlin
e E
nte
rtain
ment, Inc.
NetD
ragon W
ebS
oft, In
c.
Velti
Plc
CD
C C
orp
.M
yriad G
roup A
GX
ING
AG
Openw
ave S
yste
ms Inc.
Flu
id M
usic
Canada, In
c.
OA
O R
BC
Info
rmatio
n S
yste
ms
Gig
aM
edia
Ltd
.T
he9 L
imite
dA
Q Inte
ractiv
e, In
c.
Webzen Inc.
HU
GH
ES
Tele
matic
s, In
c.
TheS
treet.com
, In
c.
Poin
ts Inte
rnatio
nal L
td.
HanbitS
oft, In
c.
Gam
eO
n C
o L
td.
DA
DA
SpA
Acto
z S
oft C
o., L
td.
Paid
Inc.
Fro
gste
r In
tera
ctiv
e P
ictu
res A
GT
ree.C
om
, In
c.
Spark
Netw
ork
s, In
c.
Score
Media
Inc.
Yip
py, In
c.
YD
Onlin
e C
orp
.Q
uepasa C
orp
.M
oggle
, In
cN
euLio
n Incorp
ora
ted
Pla
tform
a M
edio
wa P
oin
t G
roup S
.A.
PN
I D
igita
l Media
Inc.
Ngi G
roup Inc.
Cyberp
lex Inc.
Gra
vity
Co., L
tdA
ccre
dite
d M
em
bers
Hold
ing C
orp
ora
tion
Glu
Mobile
, In
c.
GeoS
entr
ic O
yj
Tra
nsG
am
ing, In
c.
Dig
italT
ow
n, In
c.
WebM
edia
Bra
nds Inc
eP
ro L
td.
Multi
plie
d M
edia
Corp
ora
tion
Socia
lwis
e, In
c.
Asknet A
GLookS
mart
, Ltd
.Y
nk K
ore
a Inc.
NeX
plo
re C
orp
ora
tion
YouB
last G
lobal,
Inc.
Accele
rize N
ew
Media
, In
c.
VO
IS, In
c.
Dolp
hin
Dig
ital M
edia
, In
c.
Lin
go M
edia
Corp
ora
tion
Wiz
zard
Softw
are
Corp
ora
tion
Nort
hgate
Technolo
gie
s L
imite
dU
nila
va C
orp
ora
tion
Jum
buck E
nte
rtain
ment Lim
ited
Inte
rnet G
roup S
Ais
eem
edia
Inc.
Dig
italP
ost In
tera
ctiv
e, In
c.
Kent In
tern
atio
nal H
old
ings Inc.
MO
KO
.mobi L
imite
dS
ocia
lGO
PLC
SN
AP
Inte
ractiv
e, In
c.
Kiw
ibox.C
om
, In
c.
Beyond C
om
merc
e, In
c.
Spectr
um
DN
A, In
c.
IAS
Energ
y, In
c.
Oriente
d M
edia
Gro
up B
erh
ad
Unis
erv
e C
om
munic
atio
ns C
orp
.E
n2G
o Inte
rnatio
nal,
Inc.
Bro
adW
ebA
sia
Inc.
Worlds.c
om
Inc.
UO
MO
Media
, In
c
Source: CapitalIQ
Tencent’s $30 bn market cap dominates group
www.mackieresearch.com19
Price Performance – 1 Week
Price Momentum• Negative price momentum, with 62% of
stocks falling over the past week.
• Second consecutive week of >60% companies with falling prices
Rising
26%
Flat
12%
Falling
62%
www.mackieresearch.com20
Average Price Performance – 1 Week, by Sector
10.0%
4.1% 2.6% 1.2% 0.4% 0.0% 0.0%
-0.6% -1.6% -1.8%-5.5% -6.7% -6.8% -6.9% -7.5%
-9.2% -9.3% -9.8%-11.0%-13.7%
-19.1%
-37.4%-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
Infr
astru
ctu
re
Mo
bile
Ad
vert
isin
g
So
cia
l
Ne
two
rkin
g
Pa
ym
en
t
Le
arn
ing
Po
dca
stin
g
SM
S/V
oic
e
Ga
min
g
Co
llab
ora
tion
Inte
rnet R
eta
il
Datin
g
Mu
sic
En
terp
rise
Ma
rketin
g
Div
ers
ifie
d
Fin
an
cia
l
Se
rvic
es
Me
dia
Ve
rtic
al
Co
mm
un
itie
s
Sea
rch
Vid
eo
Vir
tua
l W
orl
d
Source: CapitalIQ
Infrastructure sector shows highest weekly returns
www.mackieresearch.com21
Price Performance – 1 Week
-100.0%
-80.0%
-60.0%
-40.0%
-20.0%
0.0%
20.0%
40.0%
60.0%
80.0%
WD
DD
BW
BA
ET
GI
IAS
C.A
VO
ISA
IM:S
GO
TS
X:N
LN
YIP
IB
YO
CT
SX
V:U
SS
MK
BC
HIN
.AA
06
62
70
A0
52
79
03
76
53
88
8P
AY
DM
OT
RW
EB
MO
PW
VR
BC
IN
YT
A0
95
66
0T
RE
ET
SE
:24
32
TL
EO
LO
VL
OO
KV
CL
KU
OM
OU
NT
DA
OL
59
00
57
TS
X:F
MN
IAC
IS
FL
YS
TV
IM
TG
BT
SX
V:P
NR
NW
KK
NT
HS
ND
AS
EH
K:8
08
6V
EL
TS
XV
:MM
CQ
PS
AK
OS
E:A
06
9M
YR
NT
SX
:SC
RS
OH
U7
77
SE
HK
:21
5G
AG
RV
YT
SC
MA
04
70
80
HU
TC
OT
EX
TS
E:3
63
26
18
03
81
2O
1B
C
CM
:DA
A0
52
77
0P
WR
DIE
ET
SX
V:L
MA
SX
:JM
BK
IWB
DB
:M0
CU
NL
AO
ME
DIA
MB
YL
WZ
ET
SX
V:T
NG
LV
WD
70
02
49
7G
TS
M:3
08
3S
CL
WC
YO
UA
02
37
70
TS
X:C
XG
LU
UT
SX
:PT
SN
CT
YX
TR
A:A
5A
WS
E:IG
RN
TE
SF
RG
AC
LZ
WS
E:P
GM
NX
PC
DG
LP
38
38
DG
TW
GIG
M2
12
1Y
BL
TS
PX
AD
PD
MG
EO
1V
AC
CM
Source: CapitalIQ
www.mackieresearch.com22
Price Performance (Top 10)
1 Month
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
SN
AP
Inte
ractiv
e,
Inc.
Yip
py,
In
c.
Fro
gst
er
Inte
ract
ive
Pic
ture
s A
G
Un
ise
rve
Co
mm
un
ica
tio
ns
Co
rp.
Cyb
erp
lex I
nc.
Po
ints
Inte
rna
tion
al L
td.
Ha
nb
itSo
ft,
Inc.
DA
DA
Sp
A
Mix
i, I
nc.
AQ
In
tera
ctiv
e,
Inc.
3 Month
0%
20%
40%
60%
80%
100%
120%
140%
Yip
py,
Inc.
Beyond
Com
merc
e,
Inc.
YouB
last
Glo
bal,
Inc.
eP
ro L
td.
AQ
Inte
ractive,
Inc.
SK
Com
munic
ations
Co.,
Ltd
.
Dig
italT
ow
n,
Inc.
Poin
ts
Inte
rnational Ltd
.
Gre
e,
Inc.
Glu
Mobile
, In
c.
6 Month
0%
500%
1000%
1500%
2000%
2500%
OA
O R
BC
Info
rmation
Syste
ms
eP
ro L
td.
Beyond
Com
merc
e,
Inc.
AQ
Inte
ractive,
Inc.
Quepasa C
orp
.
Unis
erv
e
Com
munic
ations
Corp
.
Score
Media
Inc.
Velti P
lc
SN
AP
Inte
ractive,
Inc.
Poin
ts
Inte
rnational Ltd
.1 Year
0%
500%
1000%
1500%
2000%
2500%
3000%
3500%
4000%
OA
O R
BC
Info
rma
tion
Sys
tem
s
Yip
py,
Inc.
eP
ro L
td.
Qu
ep
asa
Co
rp.
AQ
Inte
ractiv
e,
Inc.
Ve
lti P
lc
Flu
id M
usic
Ca
na
da
, In
c.
De
na
Co
. L
td.
Tra
nsG
am
ing
,
Inc.
Gre
e,
Inc.
Source: CapitalIQ
www.mackieresearch.com23
Price Performance (Bottom 10)
1 Week
-80.0%
-70.0%
-60.0%
-50.0%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
Unis
erv
e
Co
mm
unic
atio
ns
Corp
.
Beyon
d
Com
merc
e, In
c.
Yip
py
, In
c.
NeuL
ion
Inco
rpo
rate
d
Soc
ialG
O P
LC
VO
IS,
Inc
.
IAS
Energ
y,
Inc
.
Bro
adW
ebA
sia
Inc.
En2G
o
Inte
rnatio
na
l, In
c.
World
s.c
om
Inc
.
1 Month
-80.0%
-70.0%
-60.0%
-50.0%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
Socia
lGO
PL
C
Mo
bile
Data
Corp
.
Lo
okS
mart
,
Ltd
.
Ac
cre
dite
d
Mem
bers
Hold
ing
Co
rpora
tion
VO
IS, In
c.
Beyo
nd
Co
mm
erc
e,
Inc
.
En2G
o
Inte
rnatio
na
l,
Inc
.
Bro
adW
eb
Asia
Inc.
Unila
va
Co
rpora
tion
Wo
rlds
.com
Inc
.
6 Month
-100.0%
-90.0%
-80.0%
-70.0%
-60.0%
-50.0%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
NeX
plo
re
Co
rpora
tion
Lin
go
Me
dia
Co
rpora
tion
Sp
ectr
um
DN
A,
Inc.
VO
IS, In
c.
MO
KO
.mo
bi
Lim
ited
UO
MO
Me
dia
,
Inc
Wo
rlds
.com
Inc
.
Un
ilava
Co
rpora
tion
En2G
o
Inte
rnatio
na
l,
Inc.
Bro
adW
eb
Asia
Inc
.1 Year
-120.0%
-100.0%
-80.0%
-60.0%
-40.0%
-20.0%
0.0%
Moggle
, In
c
Acto
z S
oft
Co., L
td.
IAS
Energ
y,
Inc.
Spectr
um
DN
A,
Inc.
Worlds.c
om
Inc.
Beyond
Com
merc
e,
Inc.
YouB
last
Glo
bal,
Inc.
UO
MO
Media
,
Inc
En2G
o
Inte
rnatio
nal,
Inc.
Bro
adW
ebA
sia
Inc.
Source: CapitalIQ
www.mackieresearch.com24
Capital Market Activity (Financing, M&A)
www.mackieresearch.com25
Financing Activity – Current Month
Company Name Country Sector Acquis ition NA Grand Total
ITA S oftware US A S earch 700.0 700.0
infoGROUP US A Advertis ing 644.9 644.9
OCTANE360 US A Advertis ing 10.9 10.9
GroupSpaces UK V ertica l Communities 1.3 1.3
1355.8 1.3 1357.1
www.mackieresearch.com26
Financing Activity – Current Month, by Sector
Other
50%Search
49%
Advertising
1%
Vertical
Communities
0%
$ Raised # Deals
Other
0%
Search
34%
Advertising
33%
Vertical
Communities
33%
www.mackieresearch.com27
6.3
8.8
6.4
9.6
12.2
7.6
10.3
5.7
13.7
5.5
8.4
1.3
5.4
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
900.0
1000.0
Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10
(US
$m
)
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
(US
$m
)
Total Average per Deal LTM Total Average***Dec-09 includes $180m Zynga investment
Apr-10 includes $300m DST investment
Jun-10 includes $147m Zynga investment**Excludes Dec-09, Apr-
10
Financing Activity
After huge June, July starts very slowly
www.mackieresearch.com28
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
900.0
Advert
isin
g
Searc
h
Gam
ing
Media
Analy
tics
Inte
rnet R
eta
il
Colla
bora
tion
Mobile
Virtu
al W
orld
Socia
l Com
merc
e
Vert
ical C
om
muniti
es
Socia
l Netw
ork
s
Locatio
n-b
ased S
NS
Vid
eo
Mobile
Ad
Com
ment/R
eputa
tion
SM
S/V
oic
e
Virtu
al G
oods
Ente
rprise
Fin
ancia
l Serv
ices
Infr
astr
uctu
re
Aggre
gatio
n
Wid
get
Music
Tra
vel
Publis
hin
g
Mic
roblo
g
Onlin
e L
earn
ing
Cro
wdsourc
ed
Conte
nt
20 5 12 6 10 5 3 10 5 6 6 6 3 4 2 2 1 2 3 3 4 3 1 1 3 1 1 1 1
(US
$m
)
# companies
Capital Market Activity Ranking – by Sector, last three months
Advertising the biggest area of interest in the
past 3 months(20 deals, $810 mm)
www.mackieresearch.com29
Top 5 Sectors (2008-present)
$ Raised # Deals
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
Ja
n-0
8
Fe
b-0
8
Mar-
08
Ap
r-08
May-0
8
Ju
n-0
8
Jul-
08
Aug-0
8
Sep-0
8
Oc
t-08
No
v-0
8
Dec-0
8
Ja
n-0
9
Fe
b-0
9
Mar-
09
Ap
r-09
May-0
9
Ju
n-0
9
Jul-
09
Aug-0
9
Sep-0
9
Oc
t-09
No
v-0
9
Dec-0
9
Ja
n-1
0
Fe
b-1
0
Mar-
10
Ap
r-10
May-1
0
Ju
n-1
0
Jul-
10
(US
$ m
m)
Social Networks Gaming Advertising Video Virtual World
0
5
10
15
20
25
30
Ja
n-0
8
Fe
b-0
8
Mar-
08
Ap
r-08
May-0
8
Ju
n-0
8
Jul-
08
Aug-0
8
Sep-0
8
Oc
t-08
No
v-0
8
Dec-0
8
Ja
n-0
9
Fe
b-0
9
Mar-
09
Ap
r-09
May-0
9
Ju
n-0
9
Jul-
09
Aug-0
9
Sep-0
9
Oc
t-09
No
v-0
9
Dec-0
9
Ja
n-1
0
Fe
b-1
0
Mar-
10
Ap
r-10
May-1
0
Ju
n-1
0
Jul-
10
(# D
eals
)
Social Networks Advertising Gaming Virtual World Video
No deals in top 5 sectors in JulyTop 5 sectors average $170 mm & 15 deals per month (aggregate)
www.mackieresearch.com30
Top 10 Deals (2010 YTD)
Financing Acquisitions
300.0
147.0135.0
50.0 50.044.0 40.0 35.0 33.0 31.0
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
Dig
ita
l S
ky
Te
ch
no
log
ies
Zyn
ga
Gro
up
on
Qiy
i
Gla
m M
ed
ia
Liv
ing
So
cia
l
Tre
mo
r M
ed
ia
Gilt G
rou
pe
Pla
yd
om
Ha
ute
Lo
ok
700.0
644.9
225.0
187.5160.0
142.0126.5
100.080.0 75.0
0
100
200
300
400
500
600
700
800
ITA
So
ftw
are
info
GR
OU
P
Sir
i
ICQ
Tu
rbin
e
Jig
sa
w
Allo
y
An
ke
en
a N
etw
ork
s
Mo
ch
i M
ed
ia
Tsa
vo
Me
dia
Google acquisition of ITA ranks as biggest acquisition this yearinfoGROUP taken private in 2nd largest acquisition this year
www.mackieresearch.com31
Upcoming Events/Earnings
Source: CapitalIQ
Company Date Time Quarter Conf Call Details
Score Media (TSX:SCR) 14-Jul-10 16:00 PM (EST) Q3/10 NA
The New York Times Company (NYSE:NYT) 22-Jul-10 11:00 AM (EST) Q2/10 888-293-6979
IAC/InterActiveCorp. (NasdaqGS:IACI) 28-Jul-10 11:00 AM (EST) Q2/10 NA
Tree.Com, Inc. (NasdaqGM:TREE) 29-Jul-10 11:00 AM (EST) Q2/10 877-874-1588
www.mackieresearch.com32
Public Company ListingCompany Name Ticker Exchange
Trading
Currency HQ
Current
Price
US$ Market
C ap (mm) Employees
Accelerize New M edia, Inc. ACLZ OTCBB USD United States 1 15.9 10
Accredited M embers Holding Corporation ACCM OTCBB USD United States 1 40.9 8
Actoz Soft Co., Ltd. A052790 KOSE KRW South Korea 10,750 78.0 NA
AOL, Inc. AOL NYSE USD United States 20 2,173.9 6,700
AQ Interactive, Inc. 3838 TSE JPY Japan 173,000 107.2 NA
Asknet AG XTRA:A5A XTRA EUR Germany 3 20.7 NA
Beyond Commerce, Inc. BYOC OTCBB USD United States 0 5.0 16
BroadWebAsia Inc. BWBA OTCPK USD United States 0 1.7 46
CDC Corp. CHIN.A NasdaqGS USD Hong Kong 2 221.8 NA
Changyou.com Limited CYOU NasdaqGS USD China 27 1,401.1 1,308
Chinese Gamer International GTSM :3083 GTSM TWD Taiwan 271 722.8 NA
Cyberplex Inc. TSX:CX TSX CAD Canada 1 44.3 NA
DADA SpA CM :DA CM EUR Italy 4 79.7 597
Dena Co. Ltd. TSE:2432 TSE JPY Japan 2,371 3,938.6 NA
DigitalPost Interactive, Inc. DGLP OTCBB USD United States 0 6.6 6
DigitalTown, Inc. DGTW OTCBB USD United States 1 33.0 4
Dolphin Digital M edia, Inc. DPDM OTCBB USD United States 0 13.6 NA
En2Go International, Inc. ETGI OTCBB USD United States 0 2.4 NA
ePro Ltd. SEHK:8086 SEHK HKD Hong Kong 1 28.9 707
Fluid M usic Canada, Inc. TSX:FM N TSX CAD United States 2 162.1 NA
Frogster Interactive P ictures AG FRG XTRA EUR Germany 21 68.7 NA
Gamania Digital Entertainment Co., Ltd. 6180 GTSM TWD Taiwan 52 256.6 NA
GameOn Co Ltd. 3812 TSE JPY Japan 75,400 83.1 NA
GeoSentric Oyj GEO1V HLSE EUR Finland 0 33.7 120
Giant Interactive Group, Inc. GA NYSE USD China 7 1,565.3 1,575
GigaM edia Ltd. GIGM NasdaqGS USD Taiwan 2 128.4 NA
Glu M obile, Inc. GLUU NasdaqGM USD United States 1 39.8 479
Gravity Co., Ltd GRVY NasdaqGM USD South Korea 2 41.7 455
Gree, Inc. TSE:3632 TSE JPY Japan 7,350 3,787.7 NA
GungHo Online Entertainment, Inc. 3765 OSE JPY Japan 187,200 244.7 NA
HanbitSoft, Inc. A047080 KOSE KRW South Korea 4,765 85.4 NA
HUGHES Telematics, Inc. HUTC OTCBB USD United States 3 91.0 276
Hutchison Telecommunications Hong Kong Holdings Ltd.SEHK:215 SEHK HKD Hong Kong 2 1,007.2 1,732
IAC/InterActiveCorp. IACI NasdaqGS USD United States 22 2,392.9 3,200
IAS Energy, Inc. IASC.A OTCPK USD Canada 0 3.7 NA
Internet Group SA WSE:IGR WSE PLN Poland 1 7.7 NA
iseemedia Inc. IEE TSXV CAD Canada 0 7.1 NA
www.mackieresearch.com33
Public Company Listing cont.
Company Name Ticke r Exchange
Trading
Currency HQ
Current
Price
US$ Market
Cap (mm ) Employees
Jumbuck Entertainment Limited ASX:JM B ASX AUD Australia 0 7.8 79
Kent International Ho ldings Inc. KNTH OTCPK USD United States 2 6.6 NA
Kingsoft Corporation Limited 3888 SEHK HKD China 4 512.3 2,735
Kiwibox.Com, Inc. KIWB OTCBB USD United States 0 5.0 6
Lingo M edia Corporation TSXV:LM TSXV CAD Canada 0 13.6 NA
LiveWorld Inc. LVWD OTCPK USD United States 0 1.2 NA
LookSmart, Ltd. LOOK NasdaqGM USD United States 1 20.1 65
M ixi, Inc. 2121 TSE JPY Japan 476,000 838.5 NA
M obile Data Corp. M BYL OTCBB USD United States 0 1.2 NA
M odern Times Group M tg AB M TG B OM SEK Sweden 418 3,576.8 2,936
M oggle, Inc DB:M 0C DB EUR United States 1 49.7 2
M OKO.mobi Limited M KB ASX AUD Australia 0 6.0 NA
M otricity, Inc. M OTR NasdaqGM USD United States 8 319.5 355
M ultiplied M edia Corporation TSXV:M M C TSXV CAD Canada 0 27.0 NA
M yriad Group AG M YRN SWX CHF Switzerland 4 195.7 778
NEOWIZ Games Corporation A095660 KOSE KRW South Korea 37,800 651.9 NA
NetDragon WebSoft, Inc. 777 SEHK HKD China 4 239.7 2,901
Netease.com Inc. NTES NasdaqGS USD China 32 4,214.7 NA
NeuLion Incorporated TSX:NLN TSX CAD Canada 0 48.8 224
NeXplore Corporation NXPC OTCPK USD United States 0 17.8 NA
Ngi Group Inc. 2497 TSE JPY Japan 32,350 45.7 NA
Northgate Technologies Limited 590057 BSE INR India 17 12.4 NA
OAO RBC Information Systems RBCI M ICEX RUB Russia 34 145.2 2,523
Open Text Corp. OTEX NasdaqGS USD Canada 37 2,120.7 3,700
Openwave Systems Inc. OPWV NasdaqGS USD United States 2 162.7 590
Oriented M edia Group Berhad OM EDIA KLSE M YR M alaysia 0 3.3 NA
Paid Inc. PAYD OTCBB USD United States 0 71.9 20
Perfect World Co., Ltd. PWRD NasdaqGS USD China 22 1,115.9 2,896
Platfo rma M ediowa Point Group S.A. WSE:PGM WSE PLN Poland 1 46.5 NA
PNI Digital M edia Inc. TSXV:PN TSXV CAD Canada 1 46.3 NA
Points International Ltd. TSX:PTS TSX CAD Canada 1 88.5 93
Quepasa Corp. QPSA OTCBB USD United States 4 51.1 71
RealNetworks Inc. RNWK NasdaqGS USD United States 3 445.0 1,754
Score M edia Inc. TSX:SCR TSX CAD Canada 1 64.0 230
Shanda Interactive Entertainment Ltd. SNDA NasdaqGS USD China 38 2,251.6 5,721
Shutterfly, Inc. SFLY NasdaqGS USD United States 24 640.2 519
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Public Company Listing cont.
Company Name Ticker E xchange
Trading
Currency HQ
Current
Price
US$ Market
Cap (mm) Employees
S K C ommunications C o. , L td. A066270 KOS E K R W S outh K orea 17,950 604.8 519
S NAP Interactive, Inc. S T V I OTC B B US D United S tates 0 5.6 NA
S ocia lGO P LC AIM:S GO AIM GB P United K ingdom 0 5.6 15
S ocia lwise, Inc. S C LW OTCB B US D United S tates 1 25.0 9
S ohu.com Inc. S OHU NasdaqG S US D China 41 1,538.4 NA
S park Networks , Inc. LOV AME X US D United S tates 3 66.9 3,997
S pectrumDNA, Inc. S P XA OTCB B US D United S tates 0 4.8 155
T a leo C orp. T LE O NasdaqGM US D United S tates 24 943.9 8
T encent Holdings Ltd. 700 S E HK HKD China 130 30,629.6 916
T he New Y ork T imes C ompany NY T NY S E US D United S tates 9 1,237.6 7,845
T he9 L imited NC T Y NasdaqG S US D China 4 108.7 7,665
T heS treet.com, Inc. T S CM NasdaqGM US D United S tates 3 90.2 1,010
T ransG aming, Inc. T S XV :TNG T S XV CAD Canada 1 33.5 274
T ree.C om, Inc. T R E E NasdaqGM US D United S tates 6 67.5 28
Unilava C orporation UNLA OTCB B US D United S tates 0 8.0 700
Uniserve C ommunications C orp. T S XV :US S T S XV CAD Canada 0 3.0 40
United Online, Inc. UNTD NasdaqG S US D United S tates 6 486.2 NA
UOMO Media , Inc UOMO OTCB B US D C anada 0 1.3 1,699
V alueC lick , Inc. V C LK NasdaqG S US D United S tates 11 862.9 NA
V elti P lc V E L AIM GB P United K ingdom 4 231.7 1,086
VOIS , Inc. V OIS OTCB B US D United S tates 0 14.2 459
W ebMediaB rands Inc W E BM NasdaqG S US D United S tates 1 31.4 2
W ebzen Inc. K OS E :A069080 KOS E K R W S outh K orea 10,650 103.2 83
W izzard S oftware C orporation W ZE AME X US D United S tates 0 13.2 326
W orlds .com Inc. W DDD OTCB B US D United S tates 0 1.4 80
XING AG O1B C XT R A E UR Germany 28 180.6 1
YD Online C orp. A052770 KOS E K R W S outh K orea 4,460 54.7 293
Y ippy, Inc. Y IP I OTC B B US D United S tates 3 63.6 NA
Y nk K orea Inc. A023770 KOS E K R W S outh K orea 2,945 19.2 NA
Y ouB las t G lobal, Inc. Y B LT OTCB B US D United S tates 0 16.2 NA
www.mackieresearch.com35
Disclaimer
RELEVANT DISCLOSURES APPLICABLE TO: NONE
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Each analyst of Mackie Research Capital Corporation whose name appears in this report hereby certifies that (i) the recommendations and opinions expressed in this research report accurately reflect the analyst’s personal views and (ii) no part of the research analyst’s compensation was or will be directly or indirectly related to the specific conclusions or recommendations expressed in this research report.
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