Stock Alert for Atrinsic Inc. (ATRN) " />

Trade Alert for Atrinsic Inc. (ATRN)

Atrinsic Inc. (ATRN) operates as a direct to consumer Internet marketing company. Organized as a single segment, it has two principal offerings: full-service, performance-based online marketing solutions and subscription content services. The Company uses a unique cross-platform approach by combining the power of the Internet, mobile technology, traditional marketing and product development. ATRN claims to be one of the top digital performance marketing companies in the United States and provide entertainment content that draws 25 million unique visitors per month.

Share Statistics (23-Feb-12) FY2009 FY2010 % Chg Q32010 Q32011 % Chg
Symbol ATRN Revenue, $Mn 69.09 40.03 -42.1% 9.18 12.33 34.3%
Current price $0.25 Gross marg. 37.3% 43.7% 17.2% 50.0% 25.3% -49.4%
52wk Range: $0.01-$7.68 Oper. margin -55.7% -40.7%
Avg Vol (3m): 18,782,700 Net margin -42.7% -49.3% -15.5% -39.7% -36.7% -7.6%
Market Cap. 1.62M
Shares Outstanding 6.52M EPS, $ -3.53 -3.04 -15.9% -0.70 -0.57 -18.6%

Source: Reuters.com, SEC Filings.

Investment Highlights

Shares in Atrinsic Inc. (ATRN) saw an interesting spike in Thursday’s trading on no news released.  The stock gained $0.04, or 18.6%, to close at $0.25, with over 19 million shares exchanged. ATRN is currently trading above its 50-day moving average of $0.10 and below its 200-day moving average of $1.21.  Market capitalization currently stands at 1.62 million and it has 6.52 million outstanding shares.

Shares of the digital media solutions provider  dropped 9.1% in the last five days, though the stock spiked 659.5% in the last month.  Year-to-date, the stock is down 90.8%.

ATRN posted revenue of $12.3 million for the third quarter of 2011, up 34% from $9.2 million reported in the comparable quarter of the prior year.

Subscription revenue, which is primarily generated from the Company’s core Kazaa digital music subscription service, dropped from $4.3 million to $2.5 million quarter-over-quarter. The Company attributed the decrease to a reduction in total subscribers compared to the year-ago period, with most of the decrease coming from its non-Kazaa subscription products, reflecting the Company’s primary focus on Kazaa and the reduction or the de-emphasis of its non-core legacy subscription products.

ATRN ended the quarter with about 55 K Kazaa subscribers, compared to nearly 65 K as of September 30, 2010 and 77 K at December 31, 2010.

The Company reported operating expenses of $17.3 million, an increase of 35% from $12.8 million in same period last year. The Company attributed the result to an increase in the cost of third party media which resulted from increased Transactional Services activity.

The latest quarter results also include a non-cash impairment of intangibles assets charge of $1.4 million which is due to the significant decline in the non-Kazaa subscription business. General, administrative, and other operating expenses decreased 27%. The decrease in G&A is a result of the Company’s efforts to streamline and eliminate certain activities and to better position the business for long-term growth.

The Company recorded an adjusted EBITDA loss of ($3.3) million in the third quarter, up from a loss of ($3.1) million in the third quarter of the prior year.  Its quarterly net loss came in at ($4.5) million, or ($0.72) per diluted share, compared to a net loss of ($3.6) million, or ($0.70) per diluted share, for the third quarter of 2010.

Adjusting to exclude the previously mentioned non-cash impairment charge in the third quarter, the Company’s net loss was ($3.1) million, or ($0.49) per diluted share.

As of September 30, 2011, the Company had $2.0 million of cash and cash equivalents compared to $6.3 million as of December 31, 2010.  Its working capital deficit stood at $9.8 million.

Source:

http://www.businesswire.com/news/home/20111114005425/en/Atrinsic-Reports-Financial-Results-Quarter-Ended-September

Financial Strength (23-Feb-12)

Company

Industry

Sector

S&P 500

Quick Ratio (MRQ) 0.58 1.04 0.59
Current Ratio (MRQ) 0.48 2.91 2.70 0.94
LT Debt to Equity (MRQ) 10.43 12.80 165.33
Total Debt to Equity (MRQ) 18.14 23.28 222.95
Interest Coverage (TTM) 1.21 1.53 26.40

Source: Reuters.com, SEC Filings.

Technical Analysis

Technically speaking ATRN is positioned to squeeze shorts and make another run at the recent high of $.36 based on buy side volume building Thursday and a Relative Strength reading of 59.95.

Source: http://stockcharts.com

Comparative Analysis

Company Name Ticker Price per Mrkt. Cap. P/E P/S
Feb23-2012 symbol Share, $ $ Mn 2011 2012 2011 2012
ValueClick Inc. VCLK 20.47 1.67B 17.35 14.62 2.35 2.10
Vertro Inc. VTRO 1.42 10.27M 12.91 47.33 0.36 0.35
Marchex Inc. MCHX 4.83 162.59M 21.00 15.09 1.08 0.96
AOL Inc. AOL 18.44 1.74B 39.23 27.94 0.82 0.83
Internet Information Providers Median       22.86 n/a 2.55 n/a
Atrinsic Inc. ATRN 0.25 1.60M n/a n/a n/a n/a

Source: Thomson Financial

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