Archive for November, 2013
Remark Media Creates China’s First Boxing Channel – Launches With Distributorship of the Clash in Cotai
Remark Media announced last night that it has been named the official Digital Distributor of the Clash in Cotai boxing event headlined by Manny Pacquiao vs. Brandon Rios. Additionally, Remark Media also today announced that it is creating China’s first Boxing Channel, which will be distributed on PPTV’s platform. The Boxing Channel will feature live boxing events, documentaries, feature films, interviews, analysis and highlights from the boxing world. The Clash in Cotai is the Boxing Channel’s inaugural event. The Boxing Channel, as with PPTV’s other leading sports channels which exclusively distribute the English Premier League and the NFL, will feature a main lobby allowing viewers to browse and view on-demand content, as well as watch live events as they are broadcast. Remark Media is marketing the Boxing Channel and its live events broadcast on the channel via campaigns on Chinese social media Weibo and Weixin, incorporating celebrities, sports influencers, and cultural opinion leaders. The Boxing Channel is online at http://leader.pptv.com/boxing/.
The entire press release can be read by clicking here.
Remark is rapidly morphing into a significant player in several verticals and we believe this deal is an eye-opening example of their potential to find new and exciting ways to create value for shareholders. We should also note that any concerns about near term cash levels have been alleviated, as the 10Q filed by the company late last week included the following:
On November 12, 2013, Digipac, LLC notified the Company that it wished to convert the entire principal amounts of both the November 2012 Note and the April 2013 Note, and all accrued and unpaid interest thereon, into shares of the Company’s common stock, effective as of the same day. This conversion resulted in the issuance of 3,556,672 shares of the Company’s common stock to Digipac, LLC, and the extinguishing of a total of $5.8 million in debt issued by the Company and the approximately $281,236 in accrued and unpaid interest.
On November 14, 2013, the Company’s total cash and cash equivalents balance was approximately $2.7 million. On November 13, 2013, the Company entered into a $2.5 million Term Loan Agreement, at 6.67% annual interest rate for the first year and 8.67% for the second year, with a lender controlled by and in part owned by Mr. Kai-Shing Tao, the Company’s Chairman and Chief Executive Officer. The Term Loan Agreement is secured pursuant to the Term Loan Agreement detailed below, as amended by Amendment No. 2 to that Term Loan Agreement, dated April 2, 2013. The principal and accrued interest under the Term Loan Agreement is convertible into Common Stock of the Company at the rate of $3.75 per share, which was the closing price of the Company’s common stock on the date of entrance into the agreement. The balance is due November 2015.
Thus, the two prior convertible financings led by Remark CEO Kai-Shing Tao have now been converted into stock. While this conversion is dilutive to shareholders in that it increases the number of shares outstanding, it has zero impact on the public float and serves to further align shareholders interests with the Remark’s management. The new financing should have the same impact and management projects that this round should cover the company’s cash needs until the beginning of Q3 2014, a time frame which could allow for a liquidity event related to the company’s Sharecare stake. We believe these events will cause many new investors to take a look at the Remark story and considerable value being created for shareholders by Remark Media’s management.
Inuvo announced a very strong Q3 this past Thursday, producing $14.5m in revenue and delivering $680k or .03 per share in earnings per share. Inuvo shares have pulled back about 10% since the report and we believe this is likely due to some investors hoping to see top line revenue of $15m+ in light of comments on the Q2 call that indicated a $5m+ revenue production in July. We believe investors taking profits in Inuvo at these levels may be missing the forest for the trees, as we believe Inuvo management has wisely kept its focus on maintaining profit margins while growing the company’s mobile reach. We think investors would do well to focus on that bottom line and the fact that the company still managed to achieve 10%+ SEQUENTIAL revenue growth while expanding its mobile reach. Additionally, we note that the company’s investments in pursuit of the higher growth opportunity that mobile represents is starting to pay dividends. a fact that we expect to increasingly put the company on new investor’s radar screen.
As of Tuesday’s closing price of $1.54, INUV is essentially trading up about 50% from the price it was trading at ($1.05) when we first introduced Inuvo as one of our focus stocks. While it is always tempting to take profits when you have a stock trading 50% higher than when you acquired it, we think it would be short sighted to sell any Inuvo shares at this point. We believe the stock will hit a new 52 week high before the end of the year and that investors will start to show more interest as the stock trades north of $2. We believe selling Inuvo shares at this point in time is leaving ALOT of money on the table.
Speaking of ALOT of money, Groove community participants should take every opportunity to use the new www.Alot.com website for searching. Remember that Alot.com’s websites have a very high margin Google search feed and all ad revenue that is generated for Inuvo by these search ads is 100% profit for Inuvo (since they did not have to pay to acquire Groovers as they do for most regular consumer users of these sites). Also, with the holiday shopping season almost upon us, do not forget to use the Bargain Match website (www.bargainmatch.com) or download the bargain match browser extension (click here and get $10 just for trying it out!) that allows you to earn cash back on every purchase from nearly every major retailer in the US. The 2-10% back from any purchase that you earn is typically how much that retailer pays to Inuvo also (if you get 2%, then Inuvo earns 2% of what you bought too), so in the aggregate the use of BargainMatch by Groove members and others we recommend it to can make a big difference to Invuo’s bottom line when they report their fourth quarter in a few months. We already see indications that the Partner Network side of the company’s business is gaining very real momentum as the market for mobile ads grows in size and profitability, why not take every opportunity to help the “Owned and Operated” side (Alot.com and BargainMatch.com)grow by using each of the services and showing others how to do it too? Now that the company is solidly profitable, every additional dollar of ad revenue or bargain match shopping revenue generated goes straight to Inuvo’s bottom line as profit and that eventually improves YOUR bottom line as the stock price moves up to reflect the higher earnings. If Inuvo can report even one more penny of profit for the next quarter, the impact on Inuvo’s trading price would be significant. We already believe that Inuvo will be trading over $2 before we get too far into 2014, why not tell friends and associates to buy Inuvo at $1.50 (it is trading at $1.41 this morning – great buying opportunity) and use Alot.com and BargainMatch.com over the next few months to help push Inuvo to record earnings? As the stock value pushes past $2, everyone you recommended it to will be up 33% and have every reason to use the services more, tell others to use it more and the snowball keeps rolling. I have personally told 5 people to buy the stock (it was at $1.150 – $1.20 then) in the last 90 days and those guys are all pretty happy about their new stock and using ALOT.com’s websites on a regular basis. Keep on searching, shopping and telling others how to use Inuvo’s Alot.com and BargainMatch.com and enjoy the ride as other investors start to discover the Inuvo story.