Down 25% In A Day - MONI / Monitronics / Brinks - Whatever You Call Them - Is In Trouble

JH
John Honovich
Sep 07, 2018
IPVM

More bad news:

They are now just a nickel off their low from a few months ago and down nearly 90% this year:

This is supposedly one of the biggest alarm / security companies.

Thoughts?

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LJ
Lee Jones
Sep 08, 2018
Support Services Group

ADT is sliding too…… a race to the bottom… destination = penny stock?

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U
Undisclosed #1
Sep 08, 2018
IPVMU Certified

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JH
John Honovich
Sep 11, 2018
IPVM

ASCMA / Moni / Brinks was down another 19% yesterday to a new all-time low:

This company is in serious trouble.

UI
Undisclosed Integrator #2
Sep 11, 2018

I haven't yet looked at the trade volume, but is somebody pushing this down to make it an easy acquisition?  Seems that any company with a major part of their revenue as RMR is a darling and not a pariah.  

I don't have any experience in working with Monitronics ... aside from this tumble in stock price, are they a good company?

LJ
Lee Jones
Sep 11, 2018
Support Services Group

You asked… “Is this a good company”.

The stock price has dropped steadily from $88 several years ago to about $1 today.   Lots of smart people, over lots of time, are staying away. Lots of debt and lots customer/revenue attrition.

We believe the basic business is broken. The natural process-of-evolution of time, technology, society, politics has eroded the basic business model that is over 100 years old (ADT is 140 years old). We see a pattern similar to the KODAK rolled film and film camera business. Here, the core business requires local police response to on-demand calls for help from private monitoring firms that monitor private property deterrent alarm systems, like ASCMA/Monitronics, and ADT. Changing the business name to Moni or Brinks or (?) will not change customer expectations. Customers expect, and demand, a reliable security service when they pay very high forever monitoring fees. That critical core of this business is going away or already gone all across the country, similar to most other countries across the globe.

Special note: response to “deterrent” systems (blind, un-witnessed motion) differ from “defensive systems” (remote site witness).  Key word is witness, for on-demand emergency response. Most of the 25 million existing monitored customers in the US are of the low priority deterrent type .  Source: Lee Jones; Support Services Group

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JH
John Honovich
Sep 11, 2018
IPVM

We believe the basic business is broken.

It may very well be but that still does not explain why MONI / ASCMA valuation has gone down so much faster and is so much lower than ADT and other traditional players.

Something specifically seems especially amiss at MONI / ASCMA, even relative to their peers.

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LJ
Lee Jones
Sep 11, 2018
Support Services Group

ADT is taking a beating too. Remember, their recent IPO was the “…worst performance of any $Billion company in over 10 years”; now trading in single digits, and dropping, when insiders were expecting 3-4x higher. If compared, we note that ADT has much higher percent of modern “defensive” systems; has its own inhouse infrastructure; and has an endless source of funds via Apollo; and other differential, but millions of ADT customers have similar low end, low priority “deterrent” model. Important to note, Moni has little or no infrastructure other than monitoring, buying contracts, and billing/collection.

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Avatar
David Morgan
Sep 13, 2018
Security Dealer Marketing

Hi John - This is horrible, I didn't realize how bad their stock has taken a hit as of late and and as Lee indicated their stock has steadily dropped since a high of $88 over the last few years.  See the following image which shows their employee count down by 120 according to LinkedIn over the last 2 years:

 

Also, they've only had a total of just 5 new hires in all of 2018...Most of our independent dealer clients compete with Moni/Brinks and ADT but hopefully there will be some turnaround for competition's sake!

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LJ
Lee Jones
Sep 30, 2018
Support Services Group

Moni/Monitronics has several hundred third party alarm dealers, aka contract originators.   We would like to hear from you about your recent experiences and expectations.  Thanks

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