What are your views on the big AT sell-off? Buy more? Hold and be patient? Dump it?

Also, here is a quick summary of the conference call:

- Automotive ads being significantly impacted. Automakers are a significant portion of Acuity's pipeline
- Won't name the company, but they scaled back advertising by $1M USD in the third quarter alone
- Apple security update not expected to impact Acuity
- Plan is to eliminate legacy businesses by the end of next year and go all Illumin
- Pandemic hit businesses (travel etc) starting to ramp up ad spend
- Growth will not be where the company wants in Q4 because of supply chain issues, but still will be positive YoY growth
- Company plans to invest a significant amount of capital into new marketing and sales efforts for 2022. Calls 2022 their "mega" growth year in terms of plans
- Company estimates supply chain issues impacted the top line by "more than a few million" in Q3, and will impact them again in Q4
- Company close to landing enterprise clients, but deals halted due to supply chain issues. Most expected to be "pushed" to 2022 but they won't speculate as to when
- Mid market spend per client on the quarter up 17%. Meaning customers spending more money on ads
- Company does not plan share buybacks. It says the money is much better used for acquisitions. Talking to multiple companies a week, but refuses to overpay for deals
- CEO urges that Acuity is not for investors who want results in a couple quarters

So we saw the stock trading in the 9-12% range throughout most of the morning. I imagine when the point about supply chains impacting Q4 hit, is when a lot of people dumped it. In terms of adding, I will be adding to Acuity as capital becomes available.

Thanks Dan.
What do you think about buying more below $6.

Hi there. I took a position in Acuity, and plan to hold.

This is arguably one of the most puzzling reactions to earnings I've witnessed in my career as an investors. I've witnessed investors react poorly to reports, no question about that. But to this magnitude is somewhat nonsensical.

We knew that ad spend was likely going to be lower due to supply chain issues. This was apparent with companies like Snapchat, who also fell 25% or more post-earnings. Important to keep in mind, Snapchat is trading at much more expensive valuations than Acuity, so a 25% dip in both companies is not necessarily the same thing.

The company did not post the best quarter, but it also posted a lot of things to be optimistic about. For one, this is a profitable company with 5 consecutive quarters of positive net income. Secondly, that profitability will allow the company to survive better than a unprofitable company burning cash through this supply chain issue. And finally, its flagship product Illumin posted 40% revenue growth.

I think today was a combination of 2 things. For one, a lot of stop losses were hit. This creates a compounding effect, because the stop losses can quickly collapse the price, and then many other retail investors panic and sell. And secondly, I think a lot of investors are very deep in the red on this one. Many bought at price points north of $25 when the complete euphoria was happening in early 2021. As hopes of breaking even due to a turnaround slip away, many clinging to hopes of receiving their initial capital back have finally decided to move on.

Did the company deserve to take a hit due to a so-so earnings report? Absolutely. To the tune of 27%? Seems very excessive. For myself, 2022 is going to be the deciding year for Acuity. I want to give this company a chance to finally return to a somewhat normal operating environment and see what it can do. Because pre-COVID, it was absolutely crushing it.

Hope this helps.