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MeetMe, Inc. Message Board

  • investora2z investora2z Jul 16, 2013 7:21 AM Flag

    Difficult to sustain the positive moves

    The long term performance of the stock reflects its fundamental performance. Years of losses have weighed down on the stock and it is down by more than 75% over the last two years and is also down 18% over the last one year. It has bounced sharply by about 55% from the 52 week low made last month. The buoyancy is related to the upward revision of the management guidance for Q2'13. Now the revenues are expected to be around $9 million compared to the earlier expectations of below $8 million. The projected improvement is likely to be driven by advertiser acceptance of new Meetme advertising products for the mobile environment. Despite this revision, the guidance indicates a drop of 30% on a yoy basis as the revenues in Q2'12 were $13 million. In Q1'13 also, the revenues had dropped by about 25%. The losses continued to increase, and the accumulated deficit on March 31 was around $197 million. So the fundamentals are not great at all, and there is an urgent need for a remarkable improvement in the bottom line. Even the revenue growth, which was exponential in previous years, has slowed down, and there have been significant declines. Competition is not going to decrease as new players are attracted to the segment, and new concepts will keep attracting users to their platforms. Yappn (YPPN) has a multi-lingual social platform where users can chat without the barrier of language. The competitors like Facebook (FB) and LinkedIn (LNKD) are in a league of their own because of the size and global brand power. In any case, the valuations are not comparable, and these bigger companies are making some profit, though the operating margins are very low. Till there is a significant improvement in fundamentals, the up moves will be difficult to believe. They may not be easily sustainable.

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