Vijay Marolia
July 01, 2014

Why we're long SFX Entertainment (SFXE) in just 3 slides

SFXE is the best way to gain exposure to the fastest growing music genre and the largest demographic cohort in American History.
RPC’s
Quick & Easy
on
SFX Entertainment
All You Need to Know in 3 Slides
June 2014
Regal Point Capital Management, LLC
The Background
June 2014
2
Regal Point Capital Management, LLC
SFX Entertainment (SFXE)
is
the world’s leading producer of live
events,
media,
and
entertainment;
focusing exclusively on
Electronic
Dance
Music (EDM).
Founded by
Robert F. X. Sillerman
, SFXE will follow in the footsteps of his previous creation
Live Nation (LYV)
o
2000:
Sillerman sold
his original company to
Clear Channel
for
$4.4 billion dollars.
o
2005:
Clear
Channel Entertainment was
spun
off to
become
Live Nation
.
o
2012:
Sillerman formed SFX Entertainment to focus exclusively on EDM
EDM
has
a worldwide fan base
and is
immensely popular
with the
largest generation:
Millennials
o
86
million
millennials:
27%
of population
-
$
1.3 trillion in
annual
buying power
o
EDM
industry to be one worth
$6.2 billion
Broken IPO: Share
p
rice should double within 3 years
Bulls vs Bears
June 2014
3
Regal Point Capital Management, LLC
BULLISH BULLETS
>100% profit potential
Exposure to the largest US demographic ever
Roll
-
up acquisition strategy creates scalability and
synergies
Strong insider ownership
Smart
money as major holders
EDM is the fastest growing music genre on the
planet
An experienced CEO:
BEARISH BULLETS
Unattractive Fundamentals
High Volatility
Broken IPO under $15 = very little institutional
demand from traditional funds
Recent earnings miss
Expensive Acquisitions
EDM is a fad
An unconventional CEO:
RPC Investment Thesis
June 2014
4
Regal Point Capital Management, LLC
SFXE
i
s the best way to gain exposure to the fastes
t growing music genre and the largest demographic in
American history.
Regal Point Capital
is long SFX Entertainment
for the following reasons:
New share repurchase plan
One
of the best ways to gain exposure to
Millennials
In the US, dance was the only genre to achieve
positive growth in digital track sales in 2013
Upcoming festival season will act as catalyst to
improve earnings
Severely undervalued due to misunderstood strategy
“Most artists, you know, you spend their entire lives learning how to play music
and write songs, and they don’t really know how the music business works
.”
Moby
Disclaimer
PLEASE READ THE FOLLOWING IN CONJUNCTION WITH YOUR REVIEW OF THIS PRESENTATION
THIS DOCUMENT IS NOT AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SHARES OF THE FUND. AN OFFERING OF INTERESTS WIL
L B
E MADE ONLY BY
MEANS OF A CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM AND ONLY TO QUALIFIED INVESTORS IN JURISDICTIONS WHERE PERMITTED BY LAW.
PA
ST
PERFORMANCE IS NO GUARANTEE OF FUTURE PERFORMANCE.
An investment in the Fund is speculative and involves a high degree of risk. The fund will have substantial limitations on in
ves
tors’ ability to redeem or transfer their
shares, and no secondary market for the Fund’s shares exists or will develop. All of these risks, and other important risks,
ar
e described in detail in the Fund’s
Confidential Private Placement Memorandum. Prospective investors are strongly urged to review this Confidential Private Place
men
t Memorandum carefully and
consult with their own financial, legal and tax advisors, before investing.
Confidential information
. The information contained in this summary is confidential and may not be reproduced, distributed or used for any other purp
ose
.
Reproduction and distribution of this summary may violate federal or state securities laws.
Past Performance Not Indicative of Future Results.
This summary contains information about prior investments made by Regal Point Capital (the “Fund). Prior
investments are not necessarily indicative of future success. It should not be assumed that investment recommendations made i
n t
he future will be profitable or will
equal the performance reported herein. Unaudited figures are based on estimates and may be subject to material change. The in
for
mation contained herein is current
as of the date hereof, but may become outdated or subsequently may change.
Hypothetical Scenario.
This presentation includes a discussion of an example of the type of investment that may be purchased by the Fund. This discu
ssi
on is intended
to illustrate the types of analysis that may be conducted by Regal Point Capital in investing the Fund. It should not be ass
ume
d that this security or similar securities will
be purchased by the fund, or that any investment purchased by the Fund will perform as illustrated. The projected returns are
pr
esented gross of fund expenses,
management fees, and incentive fees, and incentive fees charged by the fund. If the expenses were reflected, the performance
sho
wn would be lower.
Performance under each of the scenarios presented is based upon Regal Point Capital’s proprietary assumptions regarding avail
abl
e pricing of the security. Actual
returns may vary widely from the project return figures presented, even under similar market conditions. Investors should not
re
ly upon the pro forma return data set
for herein in making an investment decision regarding the Fund. Regal Point Capital does not guarantee the performance of an
y i
nvestment or any particular rate of
return.
Important Notice.
The information set forth herein is being furnished on a confidential basis to the recipient and does not constitute an offer
, s
olicitation or
recommendation to sell or an offer to buy any securities, the investment products or investment advisory services. Such an of
fer
may only be made to eligible investors
by means of delivery of a confidential private placement memorandum or other similar materials that contain a description of
mat
erial terms relating to such
investment. The information and opinions expressed herein are provided for informational purposes only. An investment in the
Fun
d is speculative due to a variety of
risks and considerations as detailed in the Fund’s confidential private placement memoranda. This summary is qualified in it
s e
ntirety by the more complete
information contained therein and in the related subscription materials. Nothing contained herein constitutes financial, lega
l,
tax or other advice.
June 2014
5
Regal Point Capital Management, LLC
Next
get_app  Login to Download this PDF
More from Vijay Marolia