Replies to post #30 on Cheetah Mobile Inc (CMCM)

[finesand]

Short Attack; Excellent Financials & Performance; Buyback

Best summary, I just added the last little piece of the puzzle,
the share structure in combination with the $92M buyback!

Short attack: https://finesand.wordpress.com/2018/11/30/cheetah-mobile-cmcm-an-outrageous-unfounded-accusation-short-attack/
- Already refuted with details given: 3rd Party SDKs, not intend
- Google even blogged about it: 3rd Party SDKs, no intend
- Hence CMCM's refutation is supported, forget the class-action suit attempts

Financial etc: https://finesand.wordpress.com/2018/12/05/cheetah-mobile-cmcm-a-financially-solid-high-growth-company/
- $600M in cash on hand
- 2018 PE roughly a 20-30% 2018 EPS increase to $1.66 -$1.80
- adware phasing out slowly, AI driven stuff coming in
- revenue already more balanced by countries and utils/games

And now the magic cooky, which I didn't totally get first: The impact of the share repurchase program they started for $100M earlier. After the short attack they had $92M left.
And they stated: Every day ;-)

Best you read it all in my blog, but below I copy the share structure pic and quote the most important conclusion.

Non-Tradable Class-B shares are fully owned by the parent companies and represent full control of CMCM. Class-A shares are tradable. One ADS represent 10 ordinary shares. Class-A and Class-B shares together represent the total OS, since they have equal value. Major parent companies owning from total OS are

Kingsoft 47.33%
Tencent 16.52%

Insiders and parent companies together hold 81.75% of total OS and 33.29% of Class-A shares. 13-F filings represent 19.72% of Class-A shares. In total 53% of Class-A shares are currently owned in above period, leaving 47% or 18M free float to trade.

...

Below mentioned share repurchase program will reduce the Class-A free float dramatically, roughly by 13M ADS @ $7 avg for $92M. This would reduce the Class-A free float from 39M to 26M ADS, a reduction of over 33%. The Class-A free float would be reduced to below 8M ADS.


..

Thanks to the short attack, $92M could buy roughly 13M ADS @ $7 average in the trading range $5.50 – $8.50. This reduces the Class-A about 33% down to only 26M ADS, leaving the free-float below 8M ADS! Roughly 4.4M ADS short-interest were reported last session.