Blog Posts - Ironbound Consulting Group

Purchasing Meta

11/4/2022

Image: Meta

Market Valuation:  $250 Billion

Ironbound Buy-Side Valuation:  $440 Billion

Ironbound Assessment:  California based Meta Inc., formerly named Facebook founded in 2004, is a multinational Social Media conglomerate focused on technologies that help people connect, find communities, and grow businesses.  Meta wants all their products to share a vision of bringing the metaverse to life.  Our upside valuation is $1 Trillion based on $100 Billion in sales for 2021 and continued sales growth exceeding 10% over the next few years.  This is a reasonable expectation considering the company reported in 2021, Daily-active-users (DAU) just shy of 2 billion, nearly a third of the world’s population.  The company has a strong societal mission, giving people the power to build communities and bring the world closer together, which will help the company continue to attract and retain top talent.  Severely depressing the potential upside is the founder’s voting control, currently used to direct over $10 Billion a year to finance the buildout of a highly uncertain Metaverse.  On the other hand, the limited control is helping prevent a sovereign wealth fund or group from acquiring the company for $440 Billion, or 13-times the average operating income between 2021 and 2019.  At this price, the buyer(s) would acquire $100 Billion in assets and pay about 10¢ per DAU per day for 5 years, comparable to the Twitter acquisition, in Goodwill.

BBBY is worth less than $1

10/7/2022

Market Valuation:  $700 Million

Ironbound Buy-Side Valuation:  $99 Million

Ironbound Assessment:  New Jersey Based Bed Bath & Beyond, founded in 1971, is an American retailer that sells an assortment of merchandise in the Home, Baby, Beauty & Wellness markets.  Our buyout valuation is $1.5 Billion that would account for the cash balance, property, and some additional goodwill.  Unfortunately, the company faces major headwinds to profitability despite generating nearly $10 Billion in sales from numerous high quality retail locations and digital on-demand transformation strategies.  Several problems at the Company can be rooted in a culture steeped in financial mismanagement.   At the end of 2021, the company reported having only $440 million in cash on the balance sheet, of which most could be wiped-out to cover $320 million in current merchandise credits and gift card liabilities.  The company faces shareholder lawsuits for false or misleading financial statements and also lawsuits for unjust enrichment using corporate assets to repurchase shares.  Certain executive officers were awarded stock options with strike prices of $6, while employees were offered strikes ranging from $17 to $32.  With a book value of only $175 million, our position is to stay away from this company until the stock drops below $1 per share to profit from a short squeeze.

Is Twitter Worth $44 Billion

9/16/2022

Image: Business Insider

Market Valuation:  $30 Billion

Ironbound Buy-Side Valuation:  $20 Billion

Ironbound Assessment:  San Francisco based Twitter, founded in 2006, is a global social networking platform for real-time public self-expression.  Our upside valuation is between $50 and $75 Billion, based on the $5 Billion in sales for 2021 and projected $7.5 Billion target for 2022.  Twitter has numerous lucrative opportunities given their globally entrenched politically influential capabilities.  However, headwinds holding down the valuation are risks with achieving double-digit sales growth.  Long-term growth is rooted in cohesion between stakeholders, which management usually expresses through a commitment in core values – a company’s guiding north star.  Without cohesion, both meaning and purpose can easily be lost.  In Twitter's most recent 10-k financial filings, clearly expressed core values were missing.  In addition, Twitter continues to lag behind the business trend in establishing carbon neutral goals.  A board room wakeup call is needed, until then our position is to wait for the stock to drop below $25 a share before considering engagement.

How to Stay be in Business for Over a 100 Years

8/1/2022

Image: Signing of the Equal Pay Act of 1963

Corporate Challenge:  Leading the world into the big wave of Artificial Intelligence.

Ironbound Strategy:  Powerful brands need top talent to propel their business into the future.  Holistically creating value across all stakeholders requires embracing equity as a pivotal core value.  Pay equity is the cornerstone of creating employee value.

Ironbound Action:  New York based IBM is multinational leader in technology, with operations in 175 countries, that was founded over 100 years ago in 1911.  Since 1935 IBM has had an equal pay policy, with women currently making up about a third of the workforce.  For 29 consecutive years IBM has been awarded more U.S. patents than any other company.  IBM expects the next big trillion-dollar market opportunity to be in Hybrid Cloud and Artificial Intelligence.  In 2021 the company deployed the world’s first 127-qubit processer and is expected to launch the first 1000-qubit processer in 2023.  The values of gender equality over the last century paved the values for a much more prosperous next 100 years.

*In 2019, IBM was awarded over 4,500 patents related to AI and quantum computing

** In 2021, celebrated over 105 years of uninterrupted dividends with 25 consecutive years of increases

Breakthrough Innovation from Brand Collaborations

7/8/2022

Image: Ford

Corporate Challenge: New Innovations by partnering with other brands

Ironbound Strategy: Collaborate with other brands to create value for customers, employees, and society.

Ironbound Action: Michigan based Ford Motor Company collaborated with Florida based ADT Security to create Canopy, a smart video monitoring product and service for vehicles. Every year $7.5 Billion worth of equipment is stolen from work vehicles. Ford’s collaboration with ADT innovated a new type of smart surveillance with an integrated app to reduce theft. Brand collaborations can generate phenomenal innovation, when the objective of the partnership creates value for customers, employees, and society.

* Both Ford and ADT plan to invest $100 Million into Canopy in the next three years, and open a funding round to bring in more automotive partners. Canopy is currently integrating machine learning algorithms to be able to send an alert if a person loiters near a vehicle, but not send an alert if a cat is at the vehicle.

** An average work vehicle carries $50,000 in gear. Each year motor vehicle related theft affects 230 per 100,000 vehicles, only half are due to owner error.

How to Become the Most Innovative, Customer Centric, Inclusive, and Sustainable Company in the World

6/17/2022

Image:: Dow Inc Pride Flag

Corporate Challenge:  Avoiding groupthink culture that stifles innovation and stagnates growth.

Ironbound Strategy:  Powerful brands understand that team diversity is the life blood of innovation.  Top talent is attracted to companies with holistic purpose that creates value across stakeholders: employees, customers, and society.

Ironbound Action:  Michigan based Dow Inc has business roots that can be traced back over a century to 1897.  The company has operations in 31 countries that specialize in plastics, industrial intermediates, coatings and silicones businesses.  Winning innovation awards has been critical to their sustainable growth strategy.  To be the most innovative company in the world, they recruit and retain a diverse team of top talent.  in 2021 and 2022 Dow Inc. was named by the HRC Foundation’s list of Best Places to Work for LGBTQ+ Equality.  Creative and talented employees are drawn to companies where their value is leveled-up.

* Net Sales of $55 Billion in 2021, up 41% and 28% from 2020 and 2019.

** For 17 consecutive years Dow Inc has received a perfect score in the Human Rights Campaign (HRC) Corporate Equality Index. In 2021, they ranked on Fortune 100 Best Companies to Work For® list and ranked #19 in the Diversity Inc Top 50 Companies.

*** Received the 2021 BIG Innovation Awards from the Business Intelligence Group

Attracting Carbon Neutral Customers

5/27/2022

Image: Caterpillar Generator

Corporate Challenge: Moving a brand towards renewable energy.

Ironbound Strategy: Investing in carbon neutral innovations creates value for customers, employees, and society.

Ironbound Action: Illinois based Caterpillar created a generator that runs on 100% renewable hydrogen. Many of their customers have 2030 carbon neutrality goals, and can now replace diesel generators to help reach their environmental sustainability goals sooner. Helping to create carbon neutral innovations is a fabulous way of bringing positive attention to a brand.

* Caterpillar also created a hybrid-hydrogen generator for customers who are geographically isolated and unable to consistently refill their generators with renewable hydrogen.

** Caterpillar posted $50.9B in revenue in 2021, from $41.7B in 2020, and doubled their net income from $3B to $6.5B in the last FY.

Brand Growth from Fun Co-Branding

4/15/2022

Image: John Deere Busch Light

Corporate Challenge: Adding joy to a brand.

Ironbound Strategy: Co-Branding can create value for customers, employees, and society, especially when it is centered on fun.

Ironbound Action: Illinois based John Deere co-branded with AB-In Bev in spectacular fashion. In order to create value for society, John Deere is donating all profits from the sale of beer cans emblazoned with their tractors to farmers in need. As a valued visual brand, the green and gold cans appear celebratory, bringing pride to fans, customers and employees. Creating a fun co-branding strategy can generate insurmountable value when it brings joy to stakeholders.

* In the last 5 Years, John Deere’s stock has risen from $122 to $436 with a current 1% dividend yield ($134B Market Cap).

** In the last 5 Years, AB InBev’s stock has slipped from $116 to $58 with a current 2% dividend yield ($118B Market Cap).

Brand Growth from Mentoring the Next Generation

3/11/2022

Image: Apple Store

Corporate Challenge: Getting future customers to choose your brand.

Ironbound Strategy: Mentoring is a phenomenal way to create value for customers, employees, and society.

Ironbound Action: California based Apple is creating value for society by providing free mentorship programs around the world. The company is paying digital artists, photographers, musicians, DJ’s, and designers to teach underserved youths at Apple locations. Apple’s Creative Studios initiatives have 12-week immersive courses that teach youths how to leverage Apple’s platform and bring their hidden talents and creativity to the entire world. Mentoring is an excellent way of creating value for society. It also generates pride for employees, that their dedication at work helps make the world a better place.

* Apple’s annual revenue increased from $260.2 Billion in 2019, to $274.5 Billion in 2020, to $365.8 Billion in 2021.

Brand Growth from Helping Startups

2/11/2022

Image: Honeywell Sustainability Report

Corporate Challenge: Growing new market spaces by co-branding with startups

Ironbound Strategy: Align your brand with startups that create value for their customers, employees, and society.

Ironbound Action: North Carolina based Honeywell entered the building manufacturing marketspace by partnering with Nexii, an eco-friendly, near zero-waste, building panel startup. A year ago Nexii built Starbucks’s most eco-friendly store in just 6 days, using sustainably derived concrete panels that assembled on-site like a puzzle. Honeywell quickly moved to make a partnership with Nexii, to build their small and medium sized buildings, and help reduce Honeywell’s climate change impact. Honeywell hopes to convince clients who use Honeywell efficiency products to convert their buildings using Nexii technology as well. When a brand is committed to helping the environment, more of an impact can be made by teaming up with other brands on the same mission.

* Half of Honeywell’s R&D investment is directed towards positive social and environmental outcomes. In the last FY, Honeywell’s expenditure on R&D was $1.3 Billion.

** Last FY, Honeywell posted $34.4B in sales, with $5.6B net income.

*** Honeywell’s building solutions sales have flatlined around $2.3B after it spun-off its nearly $4B Homes and Global Distribution segment in 2018/2019.