The Yowza!! deal was not about buying revenue, but quickly getting to scale. It's about that land grab I previously referenced. I have a close friend who knows Mike, the primary investor who owned the debt in Yowza!!. He told me Friday that Mike really likes Bill Clark and that he believes his shares of Spindle leave him with significant upside over time. Appears as though he too see's the potential possibility of his shares eventually becoming worth many times current levels. I always like deals where the seller primarily gets equity in the acquiring company. The only reason any seller would take almost all stock is if they had a high degree of comfort that it was a valuable currency with strong potential upside.
Sorry guys, been out of pocket. My opinion is that it is absolutely brilliant. It really speaks for itself. Even better, I've heard rumblings they stole Yowzaa from a price perspective with them taking mostly stock which gives them too a vested interest in the combined company's success. The deal is obviously synergistic. I previously said it's all about the land grab and this deal speaks exactly to that. They have the complete platform and now they have the reach with a tremendous amount of merchants. In January comes the mobile wallet feature to tie it all together.
Can't say I'm surprised because I have long talked about the quality of management here, specifically Bill Clark and his team. I've expected good things from them and so far that's exactly what they've delivered. Certainly not completely flawless, and nobody ever is, but under the circumstances and within such a short time frame, it's hard to not be very impressed.
I've made no secret about what I think the future holds here. With now a staggering 95,000 merchants, 2M users, increasing revenues, key IP, and a highly scalable model that anyone of dozens of companies could acquire and instantly integrate, I'm more convinced than ever it's only a matter of time before someone makes a run at them. I still can't and won't speculate about the stock price, lots of factors can influence it on any given day. What I can say is that with each passing day and with continued execution, this company becomes worth more and more to so many of those potential buyers. Ultimately on a longer term basis, I think we shareholders are in a unique early stage situation that has the potential of generating us some really nice returns on our investments.
That SA article today is a great read. Hits the nail right square on the head in my opinion.
All correct carp slayer. I don't think Spindle ever gets there on par with BT. I think they are acquired long before that. You are correct that there were some very high quality VC's who invested early in the deal. I mentioned that a lawyer friend of mine invested $50k prior to the VC investment and ended up making roughly 15M on his original investment.
Currently they have about 6k merchants but have plans to increase that number substantially. I predict it the numbers grow quicker than you can imagine because merchants benefit from the service and it pays for itself. With the mobile wallet component coming in January, more will be compelled to participate. You're correct that in some places, the merchants are limited. There are many ways to increase those numbers and I'm sure the company is working on doing exactly that. Remember, I believe Braintree had roughly 30K merchants when acquired for $800M. It's really about that land grab right now so merchant count increasing is something we will all want to keep our eyes on. Larger the reach and footprint, the more this company is worth to an eventual acquirer.
"The AD LIFE platform combines all aspects of mobile engagement to drive awareness, sales and loyalty," said Ivan Braiker, CEO, Hipcricket. "We are pleased to provide expanded capabilities to Millennial Media's large and diverse client base, and help bridge the mobile advertising and marketing gap with superior technology, data, analytics and insight. This collaboration should enable Hipcricket to deliver technology to exciting new growth markets ripe for embracing our best practices."
The collaboration will enable Millennial Media to offer Hipcricket's AD LIFE(R) messaging platform across its rich media and video ad units. Clients leveraging these select mobile ad formats will be able to understand customer engagements across multiple mobile channels and gain critical insights for driving stronger messaging and retargeting for future campaigns.
"Measurement is critical to moving the needle in mobile advertising," said Frank Weishaupt, SVP, Global Sales & Revenue, Millennial Media. "Brands and agencies require insights and analytics to inform campaign decisions and target the right consumers with the right message. The AD LIFE platform is a comprehensive solution for bringing together mobile advertising and mobile marketing engagements."
Millennial Media Leverages Hipcricket AD LIFE(R) Platform for Mobile Analytics
Collaboration Makes Mobile Engagement and Analytics Easier for Brands and Agencies
BALTIMORE, Dec 04, 2013 (BUSINESS WIRE) -- Millennial MM +0.28% , the independent leader in mobile advertising, today announced that it is teaming with Hipcricket, Inc. (otcqb:HIPP), a leader in mobile engagement and analytics, to offer advertisers deeper analytics across three of the common mobile experiences: mobile applications, mobile web, and messaging services.
The combined offering of Hipcricket's mobile engagement and analytics platform and Millennial Media's advertising platform delivers measurement analytics on reach and frequency across mediums, creative efficiency, demographics, behaviors, location-based insights and demographic indexes based off of conversions.
I expect we soon hear of MM and HIPP partnering. Been expecting it for some time, it makes great sense. Possible precursor to what may eventually be a marriage. Deals in this space often happen after they date for a while to test out the relationship. MM desperately needs analytics, HIPP has the best. HIPP's now dating a handful like Google, Mondelez and a few others. Anyone could eventually lead to a deal and eventually should although I still think the ultimate buyer someone outside the scope of mobile and perhaps on the data side. On a more general note, ad spending is starting to pick up and I expect 2014 to big a big year for many in the mobile space, both in marketing and mobile payments.
Yenski, I have no idea whether we see these prices again next year or not. What I do know is that if they keep executing like they are, they will remain in a very strong position and likely be acquired at much higher prices. I've thought that from day 1. I'd just remind everyone that nothing ever goes straight up and us longer term shareholders don't want to see that happen anyways. Value sustainability is really the key, I'm sure you agree.
What I can tell you is that everything I'm seeing and hearing in the mobile space in general, both on the mobile ad spend side as well as the payments evolution, points to much wider spread adoption. I think 2014 is going to be a real breakout year for mobile in general. We've all been waiting on it for some time now and there have been a few false starts, but all indications are 2014 will be year to be remembered for many mobile companies.
You have to remember that they have already done two acquisitions to date so clearly Bill Clark and his team understand the concept of acquiring other complimentary assets.
Stay tuned yenski. There's an old saying that great minds think alike. CEO Bill Clark and his team are some of the most talented and forward thinking people in the space. I'm sure they will consider any and all strategies to maintain their early leadership position and continue to build value.
"The application carries the merchant-customer relationship from the original discovery of offers, on through the loyalty phase, and straight to the transactional side," added Michael Stevens, executive vice president with Spindle and creator of the MeNetwork solution. "It encapsulates the full spectrum of the retail experience in one simple yet powerful platform that demonstrates the true potential of the mobile commerce model."
Spindle Announces General Availability of MeNetwork360 Mobile Commerce and Marketing Application
Spindle Rolls-Out Its New Mobile App for iOS and Android, Enabling Effective Discovery and Ongoing Interaction Between Merchants and Consumers
SCOTTSDALE, AZ--(Marketwired - Dec 3, 2013) - Spindle, Inc., (OTCQB: SPDL), a leading provider of mobile commerce solutions, announced that its MeNetwork360(SM) application is now available to merchants and consumers. Combining location-based mobile marketing and payment processing on a single platform, the MeNetwork360 app is compatible with both iOS and Android devices.
MeNetwork360's innovative smartphone and tablet app offers a broad range of mobile marketing functionalities, featuring both a merchant-facing and a consumer-facing interface within the same intuitively designed application. This unique combination of services creates a comprehensive mobile commerce ecosystem that gives Spindle's customers a more comprehensive and fluid mobile commerce experience compared to competitive solutions in the marketplace.
"The MeNetwork360 platform delivers an end-to-end mobile commerce experience, allowing merchants and consumers to engage in meaningful, ongoing interactions," said Bill Clark, chief executive officer at Spindle. "Customers can identify new merchant offers, develop loyalties and establish long-term relationships with participating businesses, based on the consumer's predetermined preferences and buying patterns. On the merchant side, retailers are able to easily manipulate content that inspires these customer engagements, turning prospects into new customers -- and in turn, loyal patrons."
The new app includes two respective sets of tools: the MeNetwork360 consumer app, and the MeNetworkPro merchant app. MeNetwork360's consumer app allows the user to locate merchants in their area, read reviews, accept special orders and promotions, track and earn loyalty rewards, and share discoveries through social networks
I think HIPP absolutely eventually gets acquired. I know they could flip it right now easily for $1 as it stands, but management wants much higher. If I were them and had gone through what they have and were now sitting in the position they are, I wouldn't want to sell it that cheap either. They've weathered the storm and done the hard work. It's just been such a comedy of errors with that company with the worst mistakes being made on Paul Arena's watch. He did a great thing buy purchasing HC but he completely misguided the investment community and squandered all their operating capital on the patents. HC really has something of significant value and it's worth far more than its current market price. Stock is just disconnected from the underlying fundamentals. Either it catches up on its own or it will when someone takes them out understanding it's value also to be ultimately unlocked in a larger players greater scale. Truth is nobody can do what HIPP does and they do it very well. Put that business inside of a Google or other player, likely a data company I bet, and it will be a billion dollar business within a couple years.
It's nice to see a company like Apple understands where the market is going. Apple is one of those very companies that might eventually seek to acquire, rather than build. I can tell you if they are taking on that type of initiative in house to build, their m&a people and investment bankers are simultaneously currently looking for potential acquisitions that will accomplish the exact same. While I've named many before in previous posts, there are literally hundreds of companies that would immediately benefit from owning a company like this. At the current valuation and at even 5x's it, it is still so much cheaper to just acquire a proven platform than try and build it yourself. Not only that, but even if you could do it, you still won't have the proven patent that Spindle does that give you ownership to the underlying invention itself.
While I expect Spindle's revenues to be up a very hefty possible 5-7X next year, and cash flow positive by the half way mark, I would mention that this space is not really currently about earnings, it's about technology platforms and about the land grab with merchants. All of the early leaders like a Spindle will more than likely be acquired by much larger players because its inside that greater scale where the ultimate value will be realized. For instance, Admob was bought by Google at a huge multiple and was losing money at the time. The recent purchase of Jumptap by Millineal, the same, they lost $13M on $53m of revenue. The same could be said for almost all the recent deals in the mobile space. I don't believe Braintree was profitable either.
While I agree it very important a company demonstrate it's ability to generate a profit, the acquirers are looking for technology and immediate scalability. It just so happens Spindle has a short ways to profitability, great technology and is highly scalable. If Spindle can continue to expand it's reach and merchant count, it's only a matter of time before they go the same way as Braintree.
Excellent articles and info opportunist. What you have posted regarding the banks is why I have long appreciated how Spindle's is able to provide a white label solution to banks. Spindle essentially can empower banks offering them an ability to compete with a PayPal under their own private label payment solution. Great info, thank you.
I've been saying for the last two years that NFC would never be embraced and was the completely wrong direction for some to go in. Google is behind the 8 ball on payments in a major way. Merely a hardware solution to a software problem. Clark and Spindle clearly have known for some time that NFC was not a viable solution and adoption would be problematic hence the unique and innovative direction they've gone in. .
In terms of a comparison to Spindle and aside from my own opinion, I've been told by no less than 4 industry analysts and 1 securities analyst that what Spindle has is very unique. There is no one directly in their space per se at this time. That could obviously soon change. I think they can be compared to Square on the payment side or Four Square and Groupon on the mobile advertising space. Hope I answered your question.
I think Bill Clark and his teams intention is to build a very large and successful company just like you describe as being possible. Whether they sell out or not at some point will obviously be a matter for shareholders to vote on. I'm simply suggesting they will likely get the opportunity to consider it due to the fact that they have something highly unique and valuable. Owning Spindle would be highly accretive to so many larger players looking to gain a foothold in the space. I too hope they hold off until such time they can realize a much higher value. Without saying it, both you and I know there's really no telling how high this stock could eventually trade with continued execution over the next couple years, if allowed to remain independent. I too think BT sold themselves cheap. I'm sure you agree that it's $800M valuation serves as a nice reference point for where Spindle could be in less than a couple years. Even a comparable valuation would equate to roughly a $20 plus share price for SPDL. Time will tell. In the interim, they need to keep doing exactly what they're doing and execute.
Reinforces what I have been saying. Not only is Clark building an incredible business unto itself, but their IP portfolio is foundational to the way electronic payments are done today. Cited over 140 times by companies like PayPal and already licensed by some large players, they are open for continuation filings as mentioned by IP expert Flyersdh in his great article.
Spindle's platform is well protected with four issued patents, with the key patent being 5,822,737 Financial Transaction System. The patent has a priority date of 1996 and has been cited by 140 other financial patents. The patent portfolio grants the necessary protection as a defense in the competitive mobile payment space. I believe that Spindle will file additional continuation patents and brand new inventions in 2014 to further protect the Spindle and MeNetwork platform.
I believe that Spindle is a prime acquisition target as the mobile payment space becomes further consolidated. Braintree was just purchased by Ebay (EBAY) for $800M just last week. While I don't think Spindle will sell for $800M I could see it purchased for a nine figure number based on 8X 2014 revenue. This would be a fantastic reward for Spindle investors. My time frame for a potential deal is around 18-24 months if it was going to happen. Spindle's patent portfolio could be used as additional leverage in any such deal as it would be a prime asset in a larger entity.
Spindle will benefit from the adoption of consumers to mobile payments. Their scalable model should be a huge winner in the years to come. I believe that Spindle is an excellent and unique play in the mobile space and will provide fantastic shareholder returns as the mobile payment space blossoms.