Same asset, new use: management describes redeploying something the company already owns into a materially higher-value
The model's full reasoning — Q4 2021 call → NOWe need to determine if management describes a current repurposing of an existing asset to a materially more valuable use, already in motion. Key candidates: The E*Trade Advisory Services (EAS) acquisition is pending, not yet closed. So not that. The self-directed trading platform: "We soft launched our self-directed trading platform at the end of June." That is a new offering, but is it repurposing an existing asset? It's a new platform, not necessarily repurposing something. It's a new product. The securities business: They have Axos Clearing, which they acquired. They are integrating EAS into it. But EAS is not yet closed. What about the deposits? They are using deposits to fund loans or place at other banks. That's not a change of purpose. What about the technology investments? They mention "our technological investments we have made in our banking platform are generating strong interest from EAS Advisory clients" - but that's future. Look for a clear statement of redirecting an existing asset to a new, more valuable use. Consider the mortgage banking: They originated loans for sale. That's their business. Consider the data processing costs: They moved legacy network equipment to cloud. That's cost reduction. Consider the securities business: They have stock lending, margin lending, etc. They are growing. What about the "excess liquidity" - they are placing deposits at other banks. That's a use of excess cash, but not a repurposing of an asset. The question asks: "does management describe that the company is CURRENTLY PUTTING SOMETHING IT ALREADY OWNS OR ALREADY DOES TO A DIFFERENT AND MATERIALLY MORE VALUABLE USE THAN THE USE IT WAS ORIGINALLY BUILT, BOUGHT, OR INTENDED FOR" Look for a specific example. Perhaps the self-directed trading platform is built on existing banking platform? But it's a new offering. Maybe the Axos Clearing business itself was acquired for one purpose and now being used for something else? They acquired it in 2019. They are now using it to support EAS? But EAS is not closed. Another possibility: The bank's technology and operating systems are being used to serve EAS clients? But that's future.
| Ticker | Company | Call | Date | Call grade |
|---|---|---|---|---|
| SANG | Sangoma Technologies Corporation | Q2 2024 | 2024-02-08 | D |
| APPS | Digital Turbine, Inc. | Q1 2024 | 2023-08-08 | D |
| PRPH | ProPhase Labs, Inc. | Q1 2023 | 2023-05-11 | F |
| GGR | Gogoro Inc. | Q1 2023 | 2023-05-11 | D |
APPS · Q1 2024 → YESThe question is whether management describes currently putting something they already own or do to a different and materially more valuable use, and that this is already happening now. YES Bill Stone describes using the company’s existing on-device technology and installed base of hundreds of millions of devices (already owned and paid for) for a new purpose: alternative app distribution via DT Hub and SingleTap monetization. He states they have launched DT Hub with four U.S. operators and are generating revenue today with incremental higher RPDs from devices engaging with the Hub product, and they are leveraging existing hub capabilities to enable direct distribution outside Apple/Google stores. This is presented as already happening now, with the new use delivering better economics through higher RPD accretion and expanded revenue streams.
PRPH · Q1 2023 → YESThe question is whether management describes currently putting something they already own or do to a different and materially more valuable use, and that this change is already happening now. YES The transcript shows management describing a clear redirection of assets already owned: the manufacturing facility (originally kept solely for Cold-EEZE infrastructure after the brand sale) is now being run for third-party lozenge manufacturing, with revenues growing nearly 100% year-over-year and $25 million targeted for 2024 — a use they explicitly call “the least interesting business” yet one with “enormous value” and an estimated $70 million next-year market value.
GGR · Q1 2023 → YESThe question is about whether Gogoro is currently putting something it already owns or does to a different and materially more valuable use. YES The transcript shows Gogoro is already redirecting its existing battery-swapping network and smart batteries (originally built for vehicle swaps) into a new Virtual Power Plant use case via the Enel X partnership.