IDW- "If things had gone well, everyone would be on a yacht"

Current CEO and new publisher of IDW, David Jonas of the Jonas family took an investment call while in the car as part of his duties as a publicly traded independent comic book publisher. As he pointed out, the only comic book publishers of comparable size that you can buy stock in directly are Marvel, DC, Image, Dark Horse, Boom, Dynamite, etc. In addition to discussing the history and current status of the publisher and what they are putting out, he mentioned a few notable newsworthy items that Bleeding Cool has been eager to acquire. We’ve reported on the turbulent employment conditions, including a new EIC that they still haven’t announced, even though their competitors have. And there’s plenty of gossip to fill in the gaps. Could Jonas put some meat on those bones?

Screenshot of Davidi Jonas investment call

We’ve talked before about his mention of a new George Takei book, a turn to horror, and IDW’s own superhero, Bible, crime, mafia, and serial killer comics. But what about the company as a whole? Since this is an investment call, he had to be pretty blunt.

Davidi Jonas began by stating that “IDW has been pretty bumpy the last five to seven years. The company went public around 2009 and it was just a publishing company that wasn’t really involved in entertainment or entertainment exploitation. And as a publishing company, the company was pretty profitable. It was a small company, entrepreneurial; every dollar that was made was reinvested back into the company, but there were real cash reserves for the company.”

“If things had gone well, everyone would be on a yacht”

So what changed, Davidi? “Around 2013, the company decided to foray into entertainment and decided to become a studio and producer of sorts. While we’re reaping the rewards now with Wynonna Earp as an example, those were costly investments and frankly, they didn’t pay off. It ultimately put significant financial stress on IDW toward the end of 2019 and 2020. The company just had to pay off loans for the productions and invest in entertainment as an asset class, write and develop scripts, and build a studio. If those things had worked out, I think everyone would be sitting on a yacht clinking glasses and saying how brilliant that idea was. In retrospect, it didn’t work and those investments didn’t pay off.”

No hunting for Davidi. Could this be the new “if wishes were horses, beggars would ride”? So what happened to IDW recently? “When I came to IDW about 16 months ago, the company was in a pretty dire situation. They had fallen back into a place where they were pretty cash-strapped. By the time we were able to stop the bleeding, the company had gone from having about ten and a half million in cash at the beginning of the year to about three and a half million.”

“We have turned the tide with confidence and feel that we are on the path to profitability. We are already profitable and believe that we will be sustainably profitable. And also the engine for future growth which required a lot of difficult decisions and staff reductions and other cuts to the company’s budget.”

In other words, firing 40% of your workforce of course, with all the ramifications and more recent departures with all the gossip you would expect. So what’s next? “We’re doing more with less and feel like we’re in the strongest position to execute on our long-term goals. At this point, the company did a financing round or fundraise where we did a rights offer to IDW’s shareholders. There was pretty anemic participation from the shareholder base. I think the IDW shareholder base has become less invested in the company and the story over time, which is understandable. And so by the time we did the rights offer, the majority of the participation came from a core group of investors who believe in the future of the company, which is me and my family, and a few other small shareholders. The company is a controlled company and I am the controlling shareholder of the company. The Jonas family collectively owns and controls about two-thirds of the outstanding equity in IDW, and the rest is held by independent investors.”

Well, it seems like IDW is truly a family business now. He continued: “That round of financing wasn’t intended to pay down debt or anything like that. It was intended for strategic purposes to invest in the future of the company and to have additional cash reserves. When we hit the bottom, we were at about three and a half million, we expect to end the year with over seven million in cash with the three million that we raised. We’re on a path to profitability and we expect 2025 — when our fiscal year starts, November 1, 2024, which is our fiscal year 25 — we expect it to be an even better year than the turnaround. We’re going to be profitable this year, that’s our expectation, but when you look at the turnaround from losing about $7 million to where we are now, it’s not just the profitability, it was the ability to make that turnaround in such a short period of time. We’ve retained top talent and we’re investing in our talent, we believe the future of our company is the people and their ability to deliver, create, and collaborate, and That is where we invest our resources.”

The stock exchange

Those who remain, of course. IDW has also delisted from the New York Stock Exchange, and Davidi was asked if he would consider relisting the company. “We delisted from the New York Stock Exchange when I came in as a cost-saving measure, so we’ve saved a lot of public company costs, which probably contributes to some of the lack of liquidity and trading in the company, and lack of interest. It’s something we’re discussing whether the benefit outweighs the cost. Whatever costs we save by delisting from the New York Stock Exchange, we would have to pay back if we were to relist, so we kind of enjoy not having the burden of those costs. It’s just a question of whether that trade-off makes sense, but it’s something we’re considering.”

Expect a rebranding and relaunch of IDW at New York Comic Con for their 26th edition.