Remark Media Short Interest Update

March 25, 2015 at 10:12 am Leave a comment

Remark Media – Update – The short interest reported after yesterday’s close for Remark Media is now at the highest point since there has been a company called Remark Media with 225,000+ shares sold short. Given Remark’s tiny float and very smallish daily trading volume of 10-15,000 shares per day, this is actually a very significant short position and a situation that bears watching for several reasons –

1) Rumors abound that Sharecare may be about to file for an IPO. Some have them announcing as early as the conference where they are presenting today –

http://www.businesswire.com/news/home/20150324006192/en/Sharecare-Named-TAG-Top-10-Innovative-Technology#.VRHDFPnF-Ag

While we have seen nothing to substantiate the rumors of such an announcement, we are confident that Remark’s ownership stake in Sharecare will prove to be worth significantly more than Remark’s entire current market cap when an IPO does occur.

2) The launch of KanKan is imminent and the product’s consumer/social media focus has the potential to put Remark Media on many new investor radar screens – as a player in the social media space and potentially a play on the growth of that market in China.

We believe that Remark Media is significantly undervalued on a sum-of-the-parts analysis and that recent developments with roomlia, KanKan and Sharecare offer the potential for major upside as new investors become aware of the Remark story. We note that Remark Media’s shares are mostly owned by its management and a few institutions and that one of the largest holders (Ashford Management) has essentially doubled down on its Remark stake over the last quarter or so and now owns just under 10% of the company. The bottom line is that the float of Remark shares is very small and the thin trading volume allows for the stock price to move significantly higher with just a small uptick in demand and there are several events on the horizon that could cause such an uptick. This is not a stock that you want to be short at current prices and we believe that the speculators behind that relatively large 225,000 share Remark short interest are pretty brazen given the totality of the circumstances.

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