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In a world filled with so much deceptive behavior and fraud, I use my strength of basic common sense and DD skills to lead me down the path to profits.
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  • Valuations Based On User Adoption In The Mobile Space

    In the valuation creation cycles of Google (GOOG), LinkedIn (LNKD), Instagram (owned by Facebook (FB) after their billion dollar purchase), Whatsapp, which is rumored to be in acquisition talks with Google at a $1 billion dollar price tag and Pinterest, which recently raised $200 million of venture capital at a $2.5 billion dollar valuation, the best entry point for venture capital investors was when they spotted early rises in user adoption. User adoption almost always precedes revenue and valuation.

    The reason stand-alone mobile apps such as Instagram have a hefty price target after users adopt them is because in the mobile ecosystems, much larger companies can unlock massive amounts of value and turn unrealized revenue into realized revenue. The valuation of these companies doesn't pertain to old income statements or balance sheet metrics, but merely what is that user's worth in the future to company X.

    In the web-based world, we view Google as the gateway to the internet. The power of helping people find what they're looking for and selling advertising to companies wanting to reach this audience has turned into a business that did more than $50 billion dollars in revenue in 2012. With billions of users, Google is a case study in maximizing the value of user data. Very few companies have a better business model.

    Today and even more so in the future, websites will turn into apps and traditional ways of helping people find what they're looking for will change, as well as methods of accessing powerful user data.

    There's an interesting company named Mimvi (MIMV.OB) that's just now exiting the development stage and entering the revenue producing arena. The stock has been utterly crushed on recent financings down to the current market cap of $8.1 million here at the PPS of .118, but it certainly appears this has come to an end, as the company's CEO stated in Mimvi's first-ever conference call on April 16th, "We now have resources for the next several quarters." Translation in my book as a professional ? Once the last of the shares have been sold, MIMV can set its sights as high as it wants and Kasian Franks (company's Founder) has made it clear he sees a path to an eventual billion dollar valuation for the company. You look at Quixey with a current valuation of $150 million versus MIMV's $8.1 million and there's just no comparison, as Mimvi is growing like wildfire and probably not far from turning its first-ever profit. Investors look at Mimvi's recently filed 10-K and say, "Oh my God that's ugly," but what they don't pay attention to is that the company has now exited from the development stage and has several world-class products set for launch. One needs to look no further than the company's Alexa web traffic ranking to realize how fast the growth really is. Many speculators talk about a buyout and while it's rather early for that, it's certainly a possibility on down the road and we're not talking about years based upon what appears to be warp-speed user adoption. Mimvi recently launched their app in the Android store. Mimvi is based in Sunnyvale, CA, not far from Google's Mountain View headquarters. Like Google, Mimvi is also in the business of search and recommendations, except they focus on helping people find and discover mobile apps. They have a proprietary technology platform that has its basis in the Human Genome Project at Lawrence Berkeley National Laboratory, where Mimvi's Founder, Kasian Franks, developed a breakthrough genomic algorithm for gene comparison. This is the inspiration behind Mimvi's proprietary search and recommendation technology.

    The number of downloads in the first week of launching their app has been astonishing. The app has even been featured on the first page of "Trending Apps" in the Google app store.

    In addition, I love the new look of their search results, which went live last week.

    Imagine going back in time and being an early investor in Google when user adoption was just on the uptick in the most important sector of the next decade. Assuming Mimvi's user metrics continue down this path and looking at the mobile world as the next hot sector, I am very excited about the prospects for Mimvi in the future. The questions become .... how much are each of their users worth, those who are "searching" for a mobile app and how many users can they garner over the next year ?

    Disclosure: I am long MIMV.OB. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

    Tags: FB, GOOG, LNKD, ADTM, long-ideas
    Apr 30 3:44 AM | Link | 5 Comments
  • Truli Media Group (TRLI) - Fascinating Interview With CEO Michael Jay Solomon

    As a Christian who spends nearly half his life on the internet for business related purposes, I have yet to come across a site (when browsing for fun) that offers children, family and faith-based oriented content that really grabs my attention .... until now.

    A few weeks back while Googling for Christian related content, I found a publicly traded company called Truli Media Group (OTCQB:TRLI) and upon visiting their website at Truli.net, I realized that there was finally a place that acts as a conduit for the unmet needs and desires of millions of frustrated internet users. In simultaneously finding that Truli also had a Facebook page, I was amazed there were already over 500,000 "likes" of the site by users, a number that currently stands at 731,484 today. As if this isn't impressive enough, Truli has now also established over 75,000 followers on Twitter.

    This past week, I was able to reach the CEO of Truli and was greeted with open arms when I requested an interview. The fascinating Q&A interview is logged below.

    Q = question from me .... MJS = answer from Michael Jay Solomon

    Q: Michael, can you give my readers a brief history about yourself and what you've accomplished over the last fifty seven years when you began your career ?

    MJS: I started out with United Artists in 1956 when I was eighteen years old, loading films on trucks while going to NYU at night. When I was twenty one, UA sent me to Panama to open the Central American territory for American films, so I traveled to Guatemala, Nicaragua, Costa Rica and Honduras. A year later I went to Colombia and a year after that I was made the manager over Peru and Bolivia. At age twenty six, MCA (now Universal NBC) hired me to start their Latin American TV division. I moved to Mexico and over the next few years I put most of the TV networks on air. I was then made Vice President and traveled the world. In 1978, I started Telepictures. The company went public in 1980, the stock quickly rose from $3.00 to $32.00 and seven years later we bought Lorimar Telepictures and then MGM Studios. I personally hired Judge Wapner for the People's Court and we had many other successful television shows, such as Dallas and Knot's Landing. Four years later, I was contacted by Warner Brothers International Television and subsequently sold the company I started thirteen years earlier with $1 million dollars, for $1.2 billion dollars, at which time I became the President of Warner Bros. International for the next five years. I have served on the Board of Overseers for the prestigious NYU Stern School of Business for the past 28 years. After many years, I am still married to my beautiful wife, Luciana Paluzzi, famously known for her role as Fiona Volpe in Thunderball, a James Bond 007 thriller starring Sean Connery.

    Q: You launched Truli.net on July 10th (my birthday) of last year and at age seventy five, why not call it a day and relax in comfort the rest of your life ? Why press on after so many impressive accomplishments on such a massive scale ?

    MJS: Retiring is not in my DNA and I'm as enthusiastic as ever about meeting the needs of a very fragmented $9 billion dollar market with little to no competition. There are over 100 million people in the U.S. alone that consider themselves Evangelical Christians and another 700 million abroad. They are very hungry for a faith-based and family media content platform and social community hub.

    Q: So tell me why you're so excited about the Truli.net site and what it offers.

    MJS: The slogan of today that everyone seems to be familiar with is "Content is King," but I've coined the phrase "Distribution is Emperor" because a massive business success can be achieved in a short period of time thanks to the newest digital technologies ranging from the cloud to mobile devices and it's very inexpensive, not to mention taking advantage of a truly untapped market.

    The content on our site is extremely diverse and we're quickly becoming known as the Netflix of faith-based movies. Visitors can rent a movie for $4.00, but what's great about the platform is that we don't pay a cent for any of the content on our site unlike Netflix and we get a 50% cut from content providers. We are working towards having our own icon on Smart TV's as you see from Netflix, Facebook and others.

    Visitors can choose from thousands of weekly sermons to listen to and many of them will tithe to these ministries, just as if they were at a Sunday morning worship service. Truli gets a 15% cut from these donations and there's no charge to the ministries that provide the content. One of the most popular and charismatic ministers of our time with over 20 million followers, threw his hat into the Truli ring back in December, as Joel Osteen signed on to our platform.

    In addition to the rapidly expanding movie and sermon content, Truli is also focused on its fast growing segments of children's programming, men's and women's programming, Christian comedy, books, Christian rock and gospel and now sports. Programming is also rapidly taking shape in the Spanish, Korean and Mandarin languages. Our shopping network known as Truli Shop has over 300,000 items for sale and is powered by The Christianbook Group and as is the case with all of our other content, we pay nothing for the inventory, yet achieve a 10% to 15% cut on all items sold, packaged and delivered.

    As of today, we have approximately 100K unique monthly visitors and hope to achieve 1 million unique monthly visitors by the end of this summer along with doubling our workforce in the next 12 months.

    Q: What metric can shareholders use to value the company in its present stage of evolution ?

    MJS: We currently have 83,651,373 shares outstanding and the actual number of shares that are freely trading in the float and not tightly held is somewhere between 4 to 5 million. Our current monthly cash burn is around $40K thanks to our free content business model and our market cap is $6.6 million at the current price of .08, so obviously I feel the stock is beyond undervalued based upon our rapid growth and the fact that we're no longer in the development stage and are now generating revenues. I also recently enhanced shareholder confidence by converting $1.2 million in debt (my own money) to equity at approximately .065, basically making what I perceive to be a bold statement that back in early February, the company was worth no less than the conversion price.

    Conclusion:

    Personally, I love this rapidly evolving story and I think the conversion from debt to equity puts a floor in the stock price at .065 and even if this weren't the case, the tiny monthly cash burn of just $40K indicates that there's hope for big profits ahead, especially if growth continues on the warp-speed pace that it is. TRLI is a fully reporting company and must file quarterly reports with the SEC, thus it will be easy to follow the financial progress of this business.

    Investing in the stock down here at .08 is more than warranted and the person who you're rooting for to make Truli a success has previously taken a $1 million dollar investment and turned it into $1.2 billion dollars. Can he do it again ? If he does, investors will have more money than they know what to do with.

    Disclosure: I am long OTCQB:TRLI.

    Tags: TRLI
    Apr 01 9:05 AM | Link | 1 Comment
  • WDDD - A Conversation With CEO Thomas Kidrin

    It was just a year ago when excitement started to really gain traction concerning the stocks of companies that were suing large mega corporations for patent infringement of their protected, respective technologies. After Vringo's (VRNG) recent victory over Google, investors began to search for the next possible multi-bagger and it appears the early birds are targeting Worlds Inc. and their lawsuit (explained here) against game giant Activision Blizzard. With the upcoming June 27th Markman hearing (aka patent claim construction hearing) rapidly approaching, I had a few questions for (OTCQB:WDDD)'s CEO that would ultimately sway my decision to be one of the early birds.

    Question: Obviously when approaching the very respected law firm of Susman Godfrey L.L.P. about taking your company's case against Activision Blizzard on a contingency, they would need some time to evaluate the case before giving you an answer. How long was it before they decided to take the case ?

    TK: Susman Godfrey spent nine months reviewing our case before they came back and said, "We'll take it." They had a team of experts extensively review our patents and prior art work and they also studied the court records of our case against NCSoft that was ultimately settled out of court for an undisclosed sum. We received three additional patents covering prior art and the assumptions of validity were greatly enhanced.

    Question: Of the seven patents that your company has been awarded, how many of them are you claiming were infringed upon by Activision Blizzard ?

    TK: Five

    Question: How many claims of infringement are you making against Activision Blizzard ?

    TK: There are 59 claims across five patents.

    Question: What is your company's monthly cash burn ?

    TK: About $20K to $25K per month and with last Thursday's filing whereby we raised $302K, we have enough cash for the next twelve months based upon the high end of our capex needs.

    Question: Can investors look forward to any future patents besides the seven you've been awarded ?

    TK: We believe so.

    Question: There was recent blog chatter that either management of Vringo or certain large investors in Vringo or both had engaged in conversation with your company about investing. Is this true ?

    TK: I can't comment about any such conversations.

    Question: Does your company foresee any such problems concerning "laches" and the ability to seek damages before the original filing of the suit against Activision Blizzard ? The same sort of roadblock that Vringo encountered, including "willful infringement" action ?

    TK: No, as we are the original founders of our technology unlike the technology that Vringo bought from Lycos and secondly, we've had past discussions with Activision Blizzard's CEO, Robert Kotick, concerning a possible JV with Worlds Inc, so he was aware of our patents many years ago, yet made the decision in our opinion to willfully infringe upon our patented technology.

    Question: In giving potential investors a chance to critique the current valuation versus the potential valuation based upon successful litigation, tell me about your current share structure.

    TK: After Thursday's filing, we have approximately 82 million fully diluted outstanding shares and the float is somewhere between 20 to 25 million.

    Question: Knowing that your company is seeking damages for many years prior to the filing of the lawsuit against Activision Blizzard and potentially many other MMOG gamers, what about the timeline of damages going forward ?

    TK: Damages being sought forward from today are in the range of six to seven years out and we cannot comment at this time about future potential defendants.

    Question: Susman Godfrey L.L.P. has been very successful in recent litigation against some of the world's largest corporations such as Comcast, Alcatel, Samsung, Oppenheimer, Xilink, Avnet, Microsoft, Alcoa, IBM, Oracle, SAP, Ariba and many others. Have they had any experience in dealing with Activision Blizzard ?

    TK: Yes, as they sued Activision Blizzard previously on behalf of Paltalk and an out of court settlement was reached on the eve of the trial for an undisclosed sum.

    Conclusion: Although nothing is ever 100% guaranteed, I absolutely love the set-up here heading into the Markman hearing. For anyone who has an ounce of speculative blood in their body, they MUST at least have some sort of stake in WDDD for what could be potentially huge upside gains, especially with a current fully diluted market cap of $21 million here at a PPS of .265 in comparison with Vringo's elevated market cap of over $250 million. The company has enough cash for the next year and with Susman Godfrey in Worlds' corner after having already beat Activision Blizzard once before, this factor alone does indeed provide a meaningful margin of safety. I also believe that Vringo management, large Vringo investors or both are in talks with Worlds Inc. and if confirmed, that's an additional huge boost, not only for the stock price, but awareness.

    Disclosure: I am long OTCQB:WDDD.

    Feb 19 10:44 AM | Link | 23 Comments
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