Jeeesh! This write up has been posted here before - by me- and I thought it hadn't--well worth a re-post and re-read though.
If you go to Switch website and click "media", there is a video of the governor of Nevada going on and on about Switch and introducing the CEO/ founder to the State Senate. I never really saw anything like it before. This is in the "state of the state" address.
So this tells me right there, there is something striking about Switch. Seems Switch has some compelling, cutting edge technology that is impacting the whole state of Nevada, so it's an interesting partnership that could lead to some competitive advantages for GTT's cloud offering.
Hopefully this is the kind of partnership that doesn't sound like much, on the face of it, in a PR but could impact the whole investment theme for GTT.
Right now,it's just speculation on my part.
If it's something that can juice up GTT even more as an investment, all I could say is, WOW! If so, there will be more light shed on this, I'm sure.
Re Iti. There has been a loosening of Government purse strings and spending in their niche. They are experts in their niche, able to deal with municipalities, get contracts and service them. They do "Technology", having developed and sold a lane change warning device that was ahead of it's time. They invested in products which are tech oriented and according to them, in direct response to what is needed by their customers and these products will have good growth curve with higher margins.
It's a real company. Solid financials. Long history. In spite being a penny stock in some people's definition.
Re Mitek. Three analogies.
You are on a grassy field, hiking, with a goal in mind : a mountain before you, rising on the plain. But the mountain always appears to be three days walk away. Even after another day's walk through another, unseen valley and thicket, it STILL appears before you, at about three days away.
Mitek shorts and there's a lot, keep counting on there always being another valley, always another unseen thicket ahead and shorts are forever hopeful that longs will always be walking, never arriving.
The way I connect the dots is that, at some time over next two to three Q's, a surge in revs will either present itself as accessible and "at hand" or, if I'm wrong, the stock will falter, forcing me to decide whether what I see is not a mountain but a giant cloud, or whether to trudge on.
A car goes down the road. Your aim is to predict where it will be next Q hr or some time after. If it were at a constant 60MPH it would be simple to predict. But everyone knows this car start is supposed to start slow and stays slow for a period, then, it's supposed to gradually accelerates to 60MPH, then finally levels off. Although most people know this, it's often forgotten and it's more difficult to predict where revenue will be, at any given time as it involves a sort of calculus. Also there has been a bit of water in the car's tank- here and there. However, all that sputtering and water will be forgotten if/when the car hits 60MPH and holds it for a while.
So therein lies the opportunity for the market to inefficiently digest the known information and connect the dots and award a cap that could be low enough for price per share to greatly appreciate as the truth unfolds.The reload business model ties to smart phone proliferation and a propensity for people to adopt mobile banking as well as banks being signed, installed, integrated and it's tied to the lifting of various deposit policy limitations, as fears of fraud are assuaged and the product goes mainstream.All of this is happening for sure, but the market wants to know, "where's the beef?"
In the final analogy, some of the names have NOT been changed, so as to protect, you, the innocent.
Say I want to sell prepaid cell phones on an island where no one has cell phones. In fact, everyone drives to a phone booth and waits in lines to make and receive calls. Investors in my company, Newfangled Communications, love the story behind my business model, which is to sell blocks of time, so when the time is used up, customers reorder from my channel partners, who buy blocks and send me, the monopoly, money, ad ininitum.
The stock goes up just on the story. It helps that I'm a bonfide Harvard grad.
I go to the main governmental agency, that takes and makes a lot of phone communications. I make a deal to co-develop some infrastrucure and details and sell them a phone, along with their first block of prepaid. My investors get a report of what revenues I made and the stock goes wild because they think my business model has hit the ground running, whereas in fact, there has not been a single reorder.
At that high point of shareholder exuberance, although I've been involved in a shareholder lawsuits in the past decades, involving stock sales amd misleading investors and I've had to have my insurance pay renumerations for that, I sell a chunk of my shares, knowing that many were awarded to me prior to this- in a stock option, deemed not to be in the best interests of my shareholders and one of my board members, Mr. Michael W. Bealmear, reportedly had quit over this- with his letter actually posted on the internet.
But, be that as it may, I was paid for tweaking infrastructure, paid for a phone itself and paid way, way up front for big time block and I reported that and felt it was time to unload some.
Now accept for hypothetical reasons, that the government agency has no need to reload their phones for quite a while. That has to do with the way the deal was structured and one other thing: People on this island, if they get a prepaid phone, tend to use, for example, 1 minute a month the first month, 2 the next, 4 the next, 8 the next, 16, 32, 64, 128, 236 etc. up to a good high, reliably steady level making me finally profitable. Say I sell one prepaid phone the first month, 2 the next, 4 the next 8, 16, 32 till it level off at eighty or so and just about everyone HAS one, that is GOING to have one. Say the first customer, the main governmental agency sues me, claiming they developed the whole idea of prepaid cell phones and I stole the idea from them? But say I had other, even bigger blockbuster products on the cusp, that will float my boat, no matter what punch the storm packs (to use an anology within an anlogy and I believe, by the way, Mitek will come out on top) Do you see how it would be hard for investors to put a cap on my company, predict when this company will have reliable, recurring earnings growth, based on what their ultimate business model IS?
A small position and a wait and see attitude and a pause to have a "lookie see" at revenue results might be prudent. Or maybe a big pluge into the stock would be better- depending on your dot connecting, your proficiency at calculus, perspecuity in picking out and weighing salient factors and your risk tolerance.
One last thing:The general goes to war with the army he has, not the one he wishes he has. The investor who loves the product and it's future goes to invest with the management team they have, not the sinless one he wishes they had.
Sooner or later there has to be an explosion in revenues.
When that will happen, I don't know. Probably no next Q. Or-- probably then.
I just know you cannot simply look at things arithmetically and linearly, when they are amenable only to calculus and they are exponential.
I'm just saying, here are a lot of hockey stick shaped charts that go into the outcome, into the number and amount of reloads.It will come, imo.
Only the tiniest fraction companies can accomplish what this company did:
Dug themselves out of the hole of pink- slip-left-for-dead-derision and obscurity.
With that kind of strategic goal setting and perseverance in execution, the future looks good!!
They have proven they can acquire, manage the integration and improve metrics in a way that fits with strategic objectives.
As Winston Churchill said, "when going through Hell, keep going! Never, never give up!"
Liquidity challenges are mitigated by being on larger exchange.
I'm hoping to see some continued selling of the investment thesis and some institutional buying.
With the tiny float, price per share should rapidly improve as long as they CONTINUE improving the cash flow, margins and other metrics. Talk about a tiny obscure company going on a larger stage and you now have to mention ARI. Super!! Thanks I need the money!
We never buy based on unrealistic estimates- it's always realistic.
Actually, here's how it works:
We don't buy till we "feel" the impetus, somewhat viscerally.
So does logic drive impetus, or do we buy on emotion and justify ourselves later with logic? I think the latter.
We have a hype industry called "advertising" that exploits the real way we make decisions.
So the "brain" that got me to buy at $9 tells me to hold at $5.
The shorts don't care if there are a gazillion images being deposited. They just know what longs should know too: It takes time before Mitek can get the revenues it needs to be profitable. Time before any hockey stick shaped chart of revenues presents itself
AND, as long as there are enough who believe the time for an explosion in profits is just around the corner AND as long there are those that feel the emotion to "get in", you will have shorts jumping all over it again.
So there's justified expectation. That, you point out. But there is such a thing as a bubble of expectation to be popped and shorted.
THAT, I point out.
Inexperienced investors- and there are a lot- get freaked. Shorts win.
Of course, at some point the shorts may find themselves with hockey stick up their #$%$.
I believe that day will come.
But the short damage will be much more closely hinged on revenues released- not based on what we say here or expectations, that may only be hitched to emotional perceptions.
Mark Tluszcz, CEO at Mangrove Capital Partners. See video.
Mitek is right at the heart of this. Mitek's been using the words to explain the advantages of their mobile image capture since 2007. That, and "seamless". Of course "killer app" too but that's ancient.
Once investors have a vocabulary they tend seek out opportunity based on that vocabulary, I would think. . And they tend to grasp the potential better and be more comfortable investing in new things.
This is all a part of Mitek going Degenerous/mainstream.
And doing it before there is a credible competitor.
Check Google trends for searches on "frictionless". It's not searched a lot, but it's trending sharply up. Interesting stuff.
...and those are my exact intentions right now.To hold a core position. The company is entitled to some time. ...to get through any mis-steps they may have had in the past. And to get the young cow pumping out the recurring revenues.
Of course I want to believe everything you say. You make valid points, in that, we are NOTt in the same exact "dejavu" we found ourselves to be just before the previous infamous miss and plunge.
But a devil's advocate might simply point out that Mitek's day in the sun has been declared before and "priced into" the stock prematurely before.
Management has proven a lot of good things. But keep in mind they proved there can be, if not outright shenanigans, definitely screw ups too.
So, anyways, a flower unfurls when conditions present. Not a minute before. This is now a revenue growth game.
If I liked to short equities, I might do so, if I believed a stock could get way ahead of itself once again.
So it's the longs getting unhinged from attainable revenue growth targets and going off into the wild blue yonder that helps cause shorting.
I carry the guilt of being stupid but try to learn a few things. Revenues HAVE to be there.
That's all I'm saying. That said, appreciate your posts.
Sales, so far, have been what is holding back the price.
Mitk would have kept climbing the first time it hit $12 if sales confirmed that the expectations of growth were justified. But revenues did not confirm that at all.
You cannot, imo, have a $7 - 12 price per share and have the amount of sales we've seen so far. That would be unhinged from the reality of this very important metric-REVENUE.
I mention this not to discourage longs but to encourage them IF they believe that revenue growth, in earnest, is at hand.
I thought the stock would closing in on $30 by now. It's no where near that. Mitek is still struggling to confirm any shadow of my previous my growth expectations for it
But that said, after last months results, I think we could be turning a major corner.
If revs come in at under $3.2 M neighborhood, expect the stock to tank. In the neighborhood of $4M and no big drama. Above $4.5M and we'll be in or near double digits, probably, depending on what is said in CC.
But what counts is not a single Q but a trend. There has to be steady growth in revenues in evidence. otherwise there will be no growth in PPS.
To just shoot to $12 now, could possibly happen. But it would probably a set up for a replay of another famous Mitk nose dive. I know my posts are long. Sorry. But there it is.
Banks often buy from channel partners of Mitek's. Banks probably worry more about NOT having mobile deposit that works and NOT having it NOW, then about what happens in the future, with a lawsuit of Mitek's. Banks would be looking at an immediate exodus of mobile banking customers, not to mention higher check processing fees.
But in spite of the lawsuit there seems to be are no real competitors to buy mobile deposit from.
It all makes me think there is a consensus that Mitek is the way to go. And the lawsuit is stopping no one from going with them.
Who do you want to buy from, the guy who says his idea was stolen or the guy who's product works better and is available?
You just want something NOW that works.
Whether banks think the suit is bogus, or a slam dunk for Mitek, I , myself, wouldn't be able to say.
As far as it being a slam dunk for USAA, that doesn't walk or quack anything at all like a duck- not to me.
Not with everyone flocking to Mitek. Not with Mitek's recent patents granted that improve mobile deposit. Why doesn't USAA improve theirs? Maybe they can't. Maybe they don't have the hundreds of years of man hours that went into the original patented product.
I posted this upped target ago about a week before Yahoo revised it but my post was deleted because I mentioned the other site.
I believe the target may have been moved up in light of the comments made in CC re new goals:
"We have set new objectives. To more than double our current annualized run rate to a $400 million level and more that triple our annualized adjusted EBITDA run rate to $100 million."
These predicted fruitions have to do with the execution of strategic plans.This should result in upped price targets as organic growth kicks in and acquisitions( that continue to fit their strategies) come out of the pipeline.
The goal is $400M revs. 10% organic growth is $40M. So that, right there, would be nearly half of 2010 entire revs. So you can say what you want, but meeting these goal-s exactly as they HAVE MET their $200M rev. goals- would be good for the PPS (price/ share).
I think the PPS was about $1- 1.20 when the $200 M goal was set forth. NOTHING was said much about organic growth then..So, look at what the price was upon achievement of $200M. I think it's fair to extrapolate another double, triple or quadruple
We had a drop on higher volume yesterday. But if you check the 5 day Yahoo candle chart and the one day chart, every time it went down, it was on light volume and EVERY time it went up it was on high volume. All candles that are long and white are on volume. ALL drops are short candles on light volume.
Pretty amazing, in fact.
This supports the idea that accumulation may be what's happening. It takes time for these big players, who believe in the company's future, to get their full position. And it's still possibly going on, even after recent big gains in valuation. That would bode well.
Add $3 a share or so,imo, if favorable. It dropped by much more than that when the lawsuit was announced as I recall. The Enterprise value of Mitek was cut in half -at least.
any time the stock moves up ...
There has always been some reaction to the new high- in terms of profit taking, shakeout, whatever. Whatever low is produced has always been retested at least once if not thrice. This happens even though the CC and results are great. And they were very good this time again.
Sometimes the stock trades momentarily "crazy low " -below it's 200dma but once these lows are "in " it just goes on to a new high. Just takes time... see what it does this time, if anything, to fake us out.
Hopefully big volume buyers pounce again.
...and today, Yahoo finally updates the information I posted. Check the institutional interest. THIS is what will drive the stock price higher for a while-imo. Remember GTT was left for dead. But it's VERY much alive and well. So institutions need to address that.