Ströer: the Pile Gets Bigger (SAX:GR)

We are unimpressed with Ströer’s response to our initial report. There seems to be a cottage industry that has grown up around responding to criticism from short activists. Accordingly, Ströer leaves major issues unaddressed, which we presume is because it has no good answers. Further, certain of its response were highly misleading.

This response to Ströer is 10 pages long, plus a 14-page appendix. It covers the following topics:

1. Historic Organic Growth Remains Overstated
2. Whether Ströer Reports Q1 Organic Growth that Exceeds Guidance is Irrelevant
3. Müller Misleads in Response to a Question on Self Dealing
4. Ströer’s Operational EBITDA Justification Does Not Hold Water
5. Ströer’s Response Strengthens Our Conviction that the Cash Flow Statement is Prepared Erroneously (and Misleadingly)
6. Ströer Appears to Contradict Itself on freeXmedia, and Strengthened Our Conviction this was an Improper Transaction
7. Müller Appears to have told an Untruth
8. “Project Zero” and Alleged Ballroom Material Misstatements
9. Ströer Confirmed that Public Video is Unusually Profitable; Yet it Offered No Explanation as to Why
10. Müller and Ströer’s Moaning is Disingenuous
11. Dirk Ströer’s Relationship to Sambara Stiftung / Müller’s Failure to Address His Irregular Series of Share Transactions
12. Dirk Ströer’s Bizarre “Temporary Retirement”
13. Former CIA Behavioral Analyst and Polygrapher Found Numerous Indicia of Deception in Ströer’s Call and Written Response

To download the full report (file size: 1.2 MB), check the box to agree with the Terms of Service and then click the “Download Report” button.

Terms of Use

The reports on this website have been prepared by Muddy Waters, LLC (d/b/a Muddy Waters Research, hereinafter “Muddy Waters Research”). We refer to Muddy Waters Research, collectively with its affiliates and related persons as “Muddy Waters” and each individually as a “Muddy Waters Entity”. All reports are for informational purposes only.  Under no circumstances should any of these reports or any information herein be construed as investment advice, an offer to sell, or the solicitation of an offer to buy, any security or financial instrument.

Muddy Waters Research is an online research publication that produces due diligence-based reports on publicly traded securities. The reports are the property of Muddy Waters Research. This website is owned by Muddy Waters Research. The opinions, information, and reports set forth herein are solely attributable to Muddy Waters Research and are not attributable to any member, manager, officer, director, employee, member, client, client of an affiliate, investor, consultant, affiliate or agent thereof (collectively, such persons, the “Muddy Waters Related Persons”).

As of the publication time and date of each report, Muddy Waters Related Persons are SHORT the securities of the subject issuer (each, a “Covered Issuer”), unless otherwise stated in the report.  Such person will likely realize significant gains if the prices of the Covered Issuer’s securities decline. Muddy Waters Related Persons intend to continue transacting in the securities of Covered Issuer for an indefinite period after the report’s publication date, and such Muddy Waters Related Person may be long, short, or neutral at any time thereafter regardless of their initial position and views as stated as of the time of first publication.  No Muddy Waters Related Person has a duty to update you on our position in a Covered Issuer or whether we have a position in a Covered Issuer.

Each report on this website is opinion journalism.  Muddy Waters Research is providing its journalistic opinions about issues of concern to the general public based on facts that are fully disclosed to the readers. To the best of our knowledge, all information contained herein is accurate and reliable and has been obtained from publicly available sources that we believe to be accurate and reliable. The information presented herein is “as is,” without warranty of any kind, whether express or implied. All expressions of opinion are subject to change without notice, and Muddy Waters Research is under any duty to update or supplement this presentation or any information or opinion herein.

Muddy Waters Research is an affiliate of and under common control with Muddy Waters Capital LLC, which is an investment adviser registered with the U.S. Securities and Exchange Commission.  Muddy Waters Capital LLC and its relying advisers (collectively, Muddy Waters Capital”) does not render investment advice to anyone unless it has an investment adviser-client relationship with that person evidenced in writing. You understand and agree that Muddy Waters Capital does not have any investment advisory relationship with you or does not owe fiduciary duties to you. Giving investment advice requires knowledge of your financial situation, investment objectives, and risk tolerance, and Muddy Waters Capital has no such knowledge about you.

By downloading from, or viewing material on this website, you agree to the following Terms of Use.  You agree that your use of the research on this website is at your own risk. You agree to hold harmless all Muddy Waters Related Persons for any direct or indirect losses (including trading losses) attributable to any information on this website or in a research report. You further agree to do your own research and due diligence before making any investment decision with respect to securities of the Covered Issuer or any other financial instruments that reference the Covered Issuer or any securities issued by the Covered Issuer. You represent that you have sufficient investment sophistication to critically assess the information, analysis and opinion on this website. You further agree that you will not communicate the contents of reports and other materials on this site to any other person unless that person has agreed to be bound by these Terms of Use. If you access this website, download or receive the contents of reports or other materials on this website on your own behalf, you agree to and shall be bound by these Terms of Use. If you access this website, download or receive the contents of reports or other materials on this website as an agent for any other person, you are binding your principal to these same Terms of Use.

If you are in the United Kingdom, you confirm that you are accessing research and materials as or on behalf of: (a) an investment professional falling within Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “FPO”); or (b) high net worth entity falling within Article 49 of the FPO (each a “Permitted Recipient”). In relation to the United Kingdom, the research and materials on this website are being issued only to, and are directed only at, persons who are Permitted Recipients and, without prejudice to any other restrictions or warnings set out in these Terms of Use, persons who are not Permitted Recipients must not act or rely on the information contained in any of the research or materials on this website.

You agree that no Muddy Waters Related Person shall be liable for any claims, losses, costs, or damages of any kind, including direct, indirect, punitive, exemplary, incidental, special or consequential damages, arising out of or in any way connected with this presentation. This limitation of liability applies regardless of any negligence or gross negligence of any Muddy Waters Related Persons. You accept all risks in relying on the information and opinions in this presentation. 

You agree that the information on this website is copyrighted, and you therefore agree not to distribute this information (whether the downloaded file, copies / images / reproductions, or the link to these files) in any manner other than by providing the following link: https://muddywatersresearch.com/research/. If you have obtained research published by Muddy Waters Research in any manner other than by download from that link, you may not read such research without going to that link and agreeing to the Terms of Use.  You agree that any dispute between you and Muddy Waters Research and its affiliates arising from or related to this presentation shall be governed by the laws of the State of Texas, without regard to any conflict of law provisions. You knowingly and independently agree to submit to the personal and exclusive jurisdiction of the state and federal courts located in Austin, Texas and waive your right to any other jurisdiction or applicable law, given that Muddy Waters Research and its affiliates are based in Austin, Texas. The failure of Muddy Waters Research to exercise or enforce any right or provision herein shall not constitute a waiver of such right or provision.  You agree that each Muddy Waters Related Person is a third-party beneficiary to these Terms of Use. If any provision of these Terms of Use is found by a court of competent jurisdiction to be invalid, the parties nevertheless agree that the court should endeavor to give effect to the parties’ intentions as reflected in the other provisions set forth herein, in particular as to this governing law and jurisdiction provision. You agree that regardless of any statute or law to the contrary, any claim or cause of action arising out of or related to this presentation must be filed within one (1) year after the occurrence of the alleged harm that gave rise to such claim or cause of action, or such claim or cause of action be forever barred.