We think Opera collapses...

[Prorootect]

We think Opera collapses on its own worsening financials

Opera: Phantom of the Turnaround – 70% Downside
Published on January 16, 2020

Summary (NASDAQ: OPRA)

• Opera went public in mid-2018 based largely on prospects for its core browser business. Now, its browser market share is declining rapidly, down ~30% since its IPO.
• Browser gross margins have collapsed by 22.6% in just one year. Opera has swung to negative $12 million in LTM operating cash flow, compared to positive cash flow of $32 million for the comparable 2018 period.
• Opera was purchased by a China-based investor group prior to its IPO. The group’s largest investor and current Opera Chairman/CEO was recently involved in a Chinese lending business that listed in the U.S. and saw its shares plunge more than 80% in just 2 years amid allegations of fraud and illegal lending practices.
• Post IPO, Opera has now also made a similar and dramatic pivot into predatory short-term loans in Africa and India, deploying deceptive ‘bait and switch’ tactics to lure in borrowers and charging egregious interest rates ranging from ~365-876%.
• Most of Opera’s lending business is operated through apps offered on Google’s Play Store. In August, Google tightened rules to curtail predatory lending and, as a result, Opera’s apps are now in black and white violation of numerous Google rules.
• Given that the vast majority of Opera’s loans are disbursed through Android apps, we think this entire line of business is at risk of disappearing or being severely curtailed when Google notices.
• Instead of disclosing to investors that its “high-growth” microfinance segment could be imperiled by these new rules, Opera instead immediately raised $82 million in a secondary offering without disclosing Google’s changes to investors.
• Opera’s short-term loan business now accounts for over 42% of the company’s revenue and is responsible for eye-popping top line “growth”. Meanwhile, the segment experienced massive defaults (~50% of lending revenue) and company-wide cash flow has worsened.
• Post IPO, Opera promptly directed ~$40 million of cash into businesses owned by its Chairman, including $30 million into a karaoke app, and $9.5 million into an entity used to acquire a business that Opera had already operated and funded, via a questionable transaction.
• We think Opera collapses on its own worsening financials, with that timeline accelerating significantly if Google bans its lending apps or if its Chairman/CEO continues to draw cash out of the business through questionable related-party deals.

More: on hindenburgresearch.com: Opera: Phantom of the Turnaround – 70% Downside

 

[Moonhorse]

Opera browsers in 2020, what’s next?

By Krystian Kolondra, EVP browsers 2020 is on, and at Opera, we are already working at full speed on new things for everyone who wants a better browser. This year we skipped the traditional new year’s resolutions, but it’s good to reflect for a moment and recap what happened in 2019. In the...

blogs.opera.com

Opera Limited announces third quarter 2019 financial results | Opera Limited

Revenue of $93.7 million, growth accelerating to 119% year-over-year; exceeding the top end of Opera’s guidance range Monthly active users averaging 232 million for smartphone (up 18% YoY) and 68 million for PC (up 16% YoY) Opera News users grew 39% to over 169 million monthly active users

investor.opera.com

 

[plat]

Well, which one to believe? Is Opera in trouble or not? According to Opera's blogs, it's exceeding its own expectation revenue-wise.

 

[ErzCrz]

I do like Opera browser. Mainly for the built-in VPN and adblocker. Hard to tell which article to believe really.

 

[Outpost]

Opera refutes Hindenburg Research’s allegation that it violated Google’s policy

Opera Ltd, the Oslo-based developer of Opera web browser and other affiliated services like OPay and OKash, has denied claims

nairametrics.com

 

[upnorth]

Well, which one to believe? Is Opera in trouble or not?

Allow me help debunk that, easy!

The Hindeburg Research are known in the stock market and the financial world. Sharks, is another word, but this one is in a low category of it's own.

Hindenburg suggested Opera’s stock should trade at around $2.50, around a 70% discount to Opera’s $9 share price before the report was released on January 16. Hindenburg also disclosed the firm would short Opera. Founder Nate Anderson confirmed to TechCrunch Hindenburg continues to hold short positions in Opera’s stock — which means the firm could benefit financially from declines in Opera’s share value. The company’s stock dropped some 18% the day the report was published.

Opera and the firm short-selling its stock (alleging Africa fintech abuses) weigh in | TechCrunch

Internet services company Opera has come under a short-sell assault based on allegations of predatory lending practices by its fintech products in Africa.

techcrunch.com

Todays market share lands Opera on the Nasdaq stock market with a price around 7.27, and if one check back from the 16th of January, it's very obvious that Opera is far from any collapse.

 

[Divine_Barakah]

Brave is a better alternative and maybe Vivaldi

 

[upnorth]

Brave is a better alternative and maybe Vivaldi

Nah, not really if one talk money as I can't find any of those companies/vendors on the Nasdaq stock market.

 

[Divine_Barakah]

Nah, not really if one talk money as I can't find any of those companies/vendors on the Nasdaq stock market.

I am afraid I did not get what you meant. I was talking about functionality and trustworthiness.

 

[upnorth]

I am afraid I did not get what you meant. I was talking about functionality and trustworthiness.

I'm fully aware what you thought/talk about and that's fine IMO, but I mentioned money as in business and financial/economic worth/wealth. Same thing this thread topic is about. If one compare Opera with Brave and also Vivaldi, as those was the two companies/vendors you mentioned and it's the stock market that's the pointer, you automatic get a result that should be possible for anyone to interpret.

Nothing personal or even anything negative at all against Brave or Vivaldi as I never used them, but if I want to make money on the stock exchange market, I cant really buy or sell financial/economic stocks that don't exist. Not on Nasdaq anyway.