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MusicMagpie
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== Sensitivities == Edison believes the key risks to MMAG’s performance are as follows: * '''Competitive pressures:''' MMAG has many competitors in the buy and sell segments, some competitors have significantly more funding available to them and the structural growth dynamics of the circular economy suggest that competitive pressures are likely to remain high. * '''Rapidly changing product cycles:''' consumer-facing products are subject to rapidly changing product cycles and changes that may severely alter the growth outlooks for those categories. In disc media, MMAG is exposed to a declining category, with a rate of decline that may accelerate. The market for pre-owned products is determined by the rate of new product development, therefore MMAG is dependent on the rate of innovation of new products by third parties. * '''Development of Technology subscriptions:''' the company’s growth profile and free cash generation is very dependent on its success at developing Technology rentals, which have an expected higher revenue and EBITDA margin over the life of a device to counter the expected structural decline for disc media. The growth of rental revenue dampens near-term revenue growth and profitability as one-off sales are substituted for long-term revenue and each device is capitalised on the balance sheet. * '''Changing business exposure and addressable markets:''' MMAG’s business exposure is likely to change as it seeks to increases the size of its addressable markets and product categories offered. * '''Increasing regulation:''' the company is subject to laws and regulation that affect how companies conduct business online (eg consumer protection, information security and advertising) and regarding environmental and health and safety laws. With the increasing importance of both to governments and consumers, it is likely that regulations and laws will continue to increase. * '''Developing internationally:''' decluttr is a relatively small business in a re-commerce market that is in its relative infancy, which presents the potential risks of failing to execute on management’s growth strategy and that greater investment than expected is required to deliver on the growth strategy. Although Edison believes management has no aspirations to diversify geographically, new markets with similar characteristics as existing markets may become more interesting. * '''Foreign currency exposure:''' MMAG’s US business presents the risk that reported financials will be positively or negatively affected by translation. The company does not hedge its transaction or translation exposure. * '''Free float and major shareholders:''' MMAG’s major shareholders include the founders and connected parties, and Northern Entities, a venture capital firm that initially invested in MMAG in 2015. Combined these shareholdings represent c 54.9% of the issued shares.
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