CrowdGather Pivots Business with Acquisition of PLAOR
Whitefish, MT / May 12, 2014 / CrowdGather Inc. (CRWG), a leading owner and operator of online communities and social networks, recently announced the acquisition of Boston-based PLAOR for approximately $5 million worth of stock. The move represents a shift towards mobile apps, social gaming, and hosted forums and a move away from its wholly owned and operated forum network.
[YouTube Video: https://www.youtube.com/watch?v=X9gRnqOFfDg]
With social gaming expected to grow at a 16.1% CAGR to $17.4 billion by 2019, according to Transparency Market Research, the company’s move to acquire PLAOR represents an entry into a high growth market. The social gaming company already generates approximately $1 million per year with over 20,000 average daily users, suggesting existing traction in the market.
By leveraging CrowdGather’s existing users and capital markets access, PLAOR should be able to significantly grow its revenue and user base over the coming years. CrowdGather’s extensive hosted forum networks should provide strong exposure to hundreds of thousands of unique visitors that could provide an immediate boost to both performance metrics.
CrowdGather entered into an agreement earlier this month to sell certain websites and domain names for $1.38 million, according to a recent 8-K filing with the SEC. The move should help shore up the capital needed to build up PLAOR and pursue additional high growth opportunities in the space. Cost-cutting efforts have also helped shore up the balance sheet and reduce its debt with $14.1 million in equity.
The company’s move to acquire PLAOR and sell off some of its wholly owned properties represents a significant change in its business model that could catalyze the stock over the coming quarters. Management’s efforts have reduced its costs and net loss, bringing the firm closer to a key breakeven point, while several insiders have been actively buying the stock in the open market in a vote of confidence.
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