Low Market Cap Deserves Attention
Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.
In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.
The below articles were written under our previous business model. We have kept these articles online here for your reference.
Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.
Click Here to View Latest Articles
Overview: Crowd Mobile Limited ("Crowd Mobile", "the Company") is an Australian technology company focused on mobile software and mobile marketing services. The Company operates three divisions: the Questions and Answer Platform ("Q&A"), the Subscription division ("Subscription"), and the Crowd Media Division ("Crowd Media"). Built by the Company and its predecessors over the past 15 years, the Q&A and Subscription divisions operate in 64 countries supported by 30 languages. Crowd Media was launched in 2017 and Crowd Mobile has worked with over 6,000 digital influencers to date. Wise- owl’s last report was issued in September 2017.
Catalysts: Following two years of operational challenges and declining investor confidence, Crowd Mobile continues to invest heavily in growth initiatives across all three divisions. The restructure of the Subscription division is now complete following a non-cash write-down and move to a leaner operating model, ensuring it maintains profitable, while Crowd Media is showing promising early signs. With the division on track to deliver a 250% uplift in revenues to $1.25 million during H1FY19, the transition is further supported by recently appointed key personnel with a focus to revive and optimise the business. We also see an opportunity for Crowd Mobile to enhance its balance sheet by refinancing its current borrowings and providing clarity around its cash position.
Hurdles: Despite the Company’s improved operational leverage, there is no guarantee against further erosion of its earnings base amid mixed performance across its key operations. While Crowd Mobile’s balance sheet has significantly improved over the past three years, reducing its debt by circa 80% the Company remains reliant on external capital to fund its proposed growth plans including its digital marketing strategy. Competition remains a risk in this sector due to limited-entry barriers.
Investment View: Crowd Mobile provides transitional exposure to mobile software and services trends. As the Company continues to experience a number of operational challenges, there are medium-term risks including funding, financial performance, and competition. However, we see the potential for Crowd Mobile to extract value from its existing sales and marketing infrastructure, reduce costs and broaden its revenue mix through new opportunities. If the Company can demonstrate strong corporate governance and high transparency, recent management changes have the potential to restore market confidence. While investors require a long-term speculative appetite, we believe that Crowd Mobile’s market cap of <A$10 million deserves attention and we will monitor the stock for its turnaround potential.
General Information Only
This material has been prepared by Jason Price. Jason Price is an authorised representative (AR 000296877) of 62 Consulting Pty Limited (ABN 88 664 809 303) (AFSL 548573) (62C), and a Director of S3 Consortium Pty Ltd (trading as StocksDigital).
This material is general advice only and is not an offer for the purchase or sale of any financial product or service. The material is not intended to provide you with personal financial or tax advice and does not take into account your personal objectives, financial situation or needs. Although we believe that the material is correct, no warranty of accuracy, reliability or completeness is given, except for liability under statute which cannot be excluded. Please note that past performance may not be indicative of future performance and that no guarantee of performance, the return of capital or a particular rate of return is given by 62C, Jason Price, StocksDigital, any of their related body corporates or any other person. To the maximum extent possible, 62C, Jason Price, StocksDigital, their related body corporates or any other person do not accept any liability for any statement in this material.
Conflicts of Interest Notice
S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.
Publication Notice and Disclaimer
The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.
Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.
This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.
