Its Time to Buy Remark Media Again
We have encouraged investors to be cautious with Remark over the last 12 months, as the acquisitions (of Vegas.com and China Branding Group) transformed the company’s financial statements and outlook, while the company continued to pour significant resources into the development of its Kan Kan Data Intelligence Platform. While the acquisitions had very clear and compelling top and bottom line implications and potential for growth, we were concerned about the runway for the Kan Kan project and found it’s potential difficult to quantify. For this reason, we encouraged investors to take a “wait and see” approach until there is tangible evidence of value creation and the potential for Kan Kan to produce revenue.
The announcement today of Kan Kan’s selection by the AliBaba Cloud Group to provide its advanced facial recognition and image classification services to Alibaba cloud’s Robotic Vision Ecosystem Union represents a huge step forward in the company’s growing relationship with Alibaba and (according to Remark CFO Doug Osrow) a very significant revenue opportunity that will impact the financials in the first half of 2017. This is the traction we have been waiting to see and we believe it is now time for investors to aggressively accumulate Remark Media shares again. With the stock up only 1.3% since the news was released this morning, we believe the lack of investor recognition of the implications of this deal plus what is likely end of year tax loss selling presents a tremendous opportunity for adding shares.
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