Taboola.com Ltd. (TBLA)
Taboola (
TBLA) is a very interesting digital advertising company that went public via a SPAC merger in October of 2020.
CNBC describes their business in this way: "Taboola places content recommendation boxes on the websites of
publishers (including CNBC). Those boxes recommend pieces of content
from a publisher’s own site along with promoted slots that advertisers
pay for. Taboola makes money when it’s paid by advertisers, and it
shares that revenue back with the publisher. The company says more than
13,000 advertisers use its network to reach over 500 million daily
active users on the sites of more than 9,000 publishers."
Their CEO, Adam Singolda, said "As I think about our business, I think of Taboola as a search engine
but in reverse. Instead of expecting
people to type things they know and look for information, like travel
information, news, or products, Taboola is providing them with
recommendations for content and things they might like but just never
knew existed."
This is an exciting and interesting way to connect people with websites.
Yahoo Deal
Taboola was up 44% yesterday on news that Yahoo is taking a 25% stake in the company, and Taboola and Yahoo signed a 30-year advertising agreement. This agreement will allow advertisers to target relevant audiences without having to use third-party cookies (the worst!) or any other privacy-invading tools. Pretty awesome if you ask me.
Here's a snapshot of Taboola's income statement summary from the 3rd quarter and its comparison to last year.
Their business has been slowly declining year/year, and their guidance is really not that great. So, in a nutshell, this Yahoo deal is very welcome.
Weekly Chart
Like so many SPACs,
TBLA has sold off hard from its highs. The weekly chart below shows nice bullish divergence on both MACD and RSI(14) as the stock was making lows over the last few months.
Bottom Line
This is a very interesting company that has a nice solution to the internet advertising problem. I think they will continue to grow as adoption of their technology continues, but probably more likely in my mind is that they get acquired in the coming years, maybe even by Yahoo.
