Summary
- SCOR is a $234.2M micro-cap NASDAQ stock.
- Since the 2019 Q1 earnings call on May 8, 2019, the stock has gone into a free-fall.
- The company closed at a new 52-week low of $3.70 on July 18, 2019.
- Based on SCOR's pronounced volatility at present, I believe that the company is un-investible except for the most risk-tolerant.
2019 has been a tumultuous year for comScore, Inc. (NASDAQ:SCOR). Since trading at a 52-week high of $23.21 on March 5, 2019, the stock has decreased by ~84% and currently trades at a 52-week low of $3.70. Among the contributing factors to the recent significant price pressure are the unexpected departures of both the former CEO and company president, each of whom was in their respective roles for less than a year. The company's former COO and other key members of the leadership team also abruptly left SCOR recently, causing disarray management-wise. SCOR also recently announced a RIF, which presumably affects the sales arm of the company and will put more pressure on revenues going forward. Bottom line, this situation ramps up the challenges regarding what I believe will be a transitional year for the company.
Investment Thesis
"Red flags" abound on SCOR's front. Changes in management and BOD conflicts have left the company without a clear direction. This uncertainty has caused investors to take pause to the downside. I've always considered increased volume to the downside a bellwether for future trading. On July 18, 2019, SCOR plunged ~12.5% on volume almost twice the 90-day average. The source of the company's $20M cash infusion less than a month ago is already underwater by ~50%. Although the specific terms and conditions of this financing are not public, deals of this nature typically have legalese which gives the unnamed financier leverage under such conditions. That adds yet another unknown for current and prospective shareholders to seriously evaluate and to do so within a limited time frame.
Company Background
SCOR was founded in 1999 and is a global information and analytics company that measures consumer audiences and advertising across media platforms. In June 2007, the company's IPO raised $82.5M by issuing 5M shares of its common stock at $16.50 per share. Interest in SCOR's ability to effectively compete with industry leader Nielsen Holdings PLC (NLSN) reached a peak on August 17, 2015, when SCOR closed at an all-time high of $64.64. Shortly thereafter, the WSJ questioned the company's "nonmonetary" revenues which spawned an SEC probe that resulted in a temporary delisting of the company's stock by NASDAQ. Although that specific issue has been resolved, the SEC probe is still ongoing, and thus far, SCOR has incurred mind-numbing sums of $38.3M, $83.4M, and $46.6M for the years ended December 31, 2018, 2017, and 2016, respectively (total $168.3M) for "investigation and audit-related expenses."
