CuriosityStream has grown to 24 Million subscribers over the past few years, and has grown a massive content library consisting of 10000+ titles.
Despite their impressive growth in subscribers and revenue, the stock has declined from a high of $22 to the current price of $1.58 due to the recent market-wide collapse in growth stocks and streaming stocks.
https://www.macrotrends.net/stocks/charts/CURI/curiositystream/balance-sheet?freq=Q
If we take a look at CURI's balance sheet, we can see the company trades at a price to book below 0.6.
What is even more impressive is that if you look at their liabilities, they have almost no long term debt, and most of their current liabilities are just deferred revenue(ie someone paid an annual subscription but the whole year of service hasn't been rendered yet).
One thing to be wary of when looking at book value is what their assets consist of. High prices paid for acquisition can inflate book value via Goodwill, and a Goodwill impairment can lead to reported net losses and a decline in book value. Teladoc was a great example of this, it was picked up by value funds due to their high book value, when in reality almost all of it was due to them overpaying for Livongo, and the stock later crashed after they reported a massive loss due to goodwill impairment
However, for CURI, they hold $84 Million in cash and cash equivalents, and $13 Million in receivables. So their book value is mostly covered by cash.
Most of the remainder of their balance sheet is intangible assets, AKA content, which in my opinion is massively undervalued.
With all this in mind, why is the stock trading so low? Investors are concerned over the company's profitability. Having a lot of cash on the balance sheet isn't that great if the company burns through it, and the company has been operating on a negative cash flow basis. This creates genuine concerns about the companies return on equity, and if they can make good use of their assets to generate a profit.
Fortunately, the company is committed to positive cash flow by 2023. A price hike is planned for this year, and considering their annual subscription is only $20, I can't see it affecting subscriber numbers much. Additionally, their content library has grown large enough that they can slow down their spending.
A $84 Million market cap for a platform with over 10,000 titles, 24 million subscribers, $85 Million in cash, $13 Million in receivables, as well as a stake in Nebula is a complete steal.
The cheap valuation could also make the company the target of an acquisition by another company looking to grow their streaming content library by bundling the service with their own subscription.
That being said, considering current market conditions, this is an investment that can take a while to pay off, and is very risky short term, as the market is shying away from growth companies, and the company likely won't be returning capital to shareholders any time soon. So don't go in expecting to make a quick buck.
While I originally shied away from this stock due to their high valuation and lack of profitability, I think at current prices the company is a steal.
Positions: A few thousand shares of CURI acquired between $1.50 and $2.40.
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