We agreed with the overall consensus. Redbox and Coinstar are two businesses in secular decline, and we do not expect growth going forward. However, there’s a difference between businesses that are not growing and a business that’s going to die in the next 3 years.
We asked ourselves a simple question when we began due diligence on OUTR: Will the kiosk DVD rental business die within the next 5 years?
We concluded with “No,” and will explain our thinking throughout the article. After bypassing the initial conclusion, we began modeling out a share buyback pro forma statement. And from what we can tell you, we hope and pray every night that OUTR’s stock price never rises. We hope that it never rises for the next 5 years, as a matter of fact. Here is a snapshot of our conclusion as to why: