Groove Community Update – Remark Media

September 12, 2013 at 8:30 am Leave a comment

 

Remark Media hit a new 52 week high this week and over the last few weeks has been trading in much higher volumes than we have seen in the near past. We believe this is likely the result of several factors.

First, we noted that the trading volume started ticking up following the company’s Q2 report filing with the SEC. The company reported a substantial increase in revenue, likely due to the bump in ad revenue that the company’s IRS.com, Banks.com and FileLater.com get each year during the days leading up to the IRS personal income tax filing deadline on April 15.

Another potential factor we see is that the company is likely benefiting from increased traffic to the recently acquired Bikini.com. We see great potential for ad revenue developing there, particularly if the general public responds to the new content and community on Bikini.com in the same way we have experienced with our own GrooveVC editors, who apparently are spending much more time on their due diligence with the Bikini.com site than they have with previous acquisitions. Seriously though, there are a number of directions we could see the company going with Bikini.com that could create substantial value for shareholders and we think investors are likely starting to take notice.

 

Another factor that may be driving increased interest in Remark Media shares is the increasing likelihood of the company starting to realize the substantial value represented by its ownership of approximately 10% of Sharecare. As we have discussed previously, we believe that Sharecare will file to go public within the next year and the improving market for Initial Public Offerings make the likelihood of this occurring in the near future even better. Additionally, we note that the company recently hired former Apple communications executive Jen Martin to be Sharecare’s first Public Relations leader, describing her role as “the VP of communications, overseeing PR strategy, media relations, and messaging”. All other things being equal, we think this hire makes it more likely than before that we are moving ever closer to a Sharecare IPO. Of course, this means that Remark Media shareholders are moving ever closer to realizing the value of that Sharecare stake, which in itself should drive Remark shares higher.

 

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