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Dr. John Faessel
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Dr. John L. Faessel is a seasoned and respected Wall Street professional with industry-wide recognition for expertise in market strategy and analysis. He is widely recognized for his insights in public companies. For over 20-years Dr. Faessel’s ON THE MARKET reports have been widely distributed... More
  • Wins Sybase Innovator of the Year Award - I envision that a buyout is in the cards  0 comments
    Aug 14, 2011 1:51 PM | about stocks: MFON

    Last week on one of those gut wrenching 500 point down days I introduced a “New Best Idea.” Because it’s likely that most investors had their hands full at the time I am reissuing the report.

    The stock market has just experienced one of the most horrific market plunges in history and I believe we've got a decent low in and that a preponderance of stocks are at values that haven’t been seen for decades.

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    Dr. John L. Faessel

    ON THE MARKET

    Commentary and Insights

    Faessel Publishing LLC

    Dr.Faessel@onthemar.com

     

    THE NEXT BIG THING

     

    This year 5.3 billion mobile subscribers will push out 8 trillion text messages. Nothing has EVER grown this fast

     

    Mobile ad spending worldwide is predicted to be $3.3 billion in 2011 and will skyrocket to $20.6 billion by 2015.

     

    And (OTC:MFON) won the Sybase* Innovator of the Year Award

     

    The summary then the story

     

    Recent acquisitions by (OTC:MFON) like the BoomText deal will add over 1,000 new clients and will sharply and immediately build accretive revenue. Other companies in the sector want to sign-on and join premier names like Disney, Sony Pictures, AT&T, and CNN as they come to comprehend the impact on the marketplace of (OTC:MFON)’s unique breakthrough Sybase-award-winning software technology. I envision that a buyout is in the cards for (OTC:MFON) and that it will occur relatively soon. Importantly, of the 5 companies in the space, four are already richly priced. Because of the “deal price” to “sales” dynamic of recent acquisitions, a high multiple will be gifted on the CommerceTel shares. Assuming the above, if revenues are increased to $8 or $10 million (this, I believe, will occur) and one of those 10X or 20X or 30X multiples is used by the acquiring entity, this is a home run story with high “bagger” potential. With (OTC:MFON)’ current market cap of $37 million, the risk reward screams, “buy me.” In addition (OTC:MFON) owns a patent kicker that could be worth megabucks.**

     

    CommerceTel Corp (OTC:MFON) OTCBB $1.75

     

    The killer factoid is that the average “mobile” user now spends over an hour a day on the “device” and packs it 24/7. The connection to the world’s markets is literally in the consumer’s hand, and never has there ever been such an intimate and direct connection with the consumer. Nowadays it’s just a simple click to purchase the wares or communicate with the vendor. The mobile payment solutions industry will top $1 trillion by 2014, with over one billion users.

     

    Talk about eyeballs, advertising, interactivity, intimacy and opportunity...

     

    Now, key to the CommerceTel story is its software platform. For starters, it is the winner of Sybase Inc’s* Innovator of the Year Award in 2009. What (OTC:MFON)’s unique C4 platform does is connect consumers to brands by merging and integrating the powerful capabilities of both voice and SMS text messaging while combining Facebook, Twitter and MMS. C4 allows delivery of HD-quality graphics and animation to screens, whether it is broadcast, stadium boards, or digital signage, and connects the advertized company or brand to the consumer via the mobile device. Read: a pipe directly into the consumer’s hand.

     

    No device in the history of mankind has penetrated the global population as fast as the mobile phone. The space is growing so fast that advertising into the market can hardly keep up with the new apps and sites. Google says that over half of their 90 billion searches a month / (“ghits” is the Google idiom) now come from mobile devices.

     

    (OTC:MFON)’s over 400 customers include CNN, Disney, Sony Pictures, AT&T, Verizon, USA Network, numerous professional sports franchises, the Golf Channel, and NBC Universal. New acquisition BoomText will add over 1,000 new clients to (OTC:MFON)’s customer base, including larger distributed brand organizations such as Sonic, Jamba Juice, Dutch Brothers, Dairy Queen, Chick-fil and Pizza Hut.

     

    Here’s the “why” story that makes (OTC:MFON) so compelling:

     

    It’s obvious to major players that advertising into the mobile market is the new big thing. Recent deals show price-to-sales comparables that validate this as fact: acquisitions lately have been priced at exceptionally high multiples of revenue, some as high as 30X revenue, making (OTC:MFON) immensely compelling. There is a feeding frenzy building to get into the space.

     

    My belief is that with the new acquisition of BoomText’s 1000 plus client companies added to (OTC:MFON)’s organic growth, and with continuing execution of their acquisition strategy, revenue can boom over the next year making the company an excellent acquisition possibility.

     

    Here are a few examples of where you may have seen (OTC:MFON)’s technologies in action:

     

         Watching CNN, and you are asked to send in a text message with comments on a news topic - and you see a flowing “ticker tape” of the audience’s comments.

     

         In the stands at a baseball game or an NBA basketball game, and you see graphics on the JumboTron where you are asked to text in your selection of the “player of the game.”

     

         Listening to Disney radio, where the audio content streams to your mobile device.

     

    Each of these examples represents very different technologies, yet (OTC:MFON)’s unique cloud-based C4 software platform integrates the disparate input, in effect, into a single “pipe.” Further, it combines and coordinates the data on a web browser located “on-site” at the client company. The mobile channels of Voice, SMS, MMS, and APPS are all brought together under one umbrella on one browser. (OTC:MFON) has pioneered combining all of these channels into one unified solution. This was the basis of the Sybase Innovator of the Year Award.

     

    A bit of history to further enlighten:

     

    During the website boom in the “old” days of late 90’s and the early part of the 2000s, companies needed to hire programmers and to have their own server and massive technical expertise in order to host and run a website. Then software solutions were created with programs like Microsoft’s FrontPage and Macromedia’s Dreamweaver, which allowed for operation of the website with only a browser and a few mouse clicks. It was an amazing change in the status quo. Crucially, this is what (OTC:MFON) had done for mobile.  What this means is that (OTC:MFON) can engage any mobile device, anytime, anywhere, and the process of integration of the channels into one unified solution, and its management can be orchestrated from the client’s facility, thereby creating an exceptional value dynamic.

     

    Because of the industry’s comprehension and appreciation of (OTC:MFON)’s software, other companies have wanted to partner-up or be acquired. Notably, two acquisitions have been closed this year and the BoomText closing should be finalized shortly. 

     

    While (OTC:MFON) is still a small company and undiscovered by the street, all things considered it’s a story that has immense gravitas.

     

    ** Now about the patent “kicker”:

     

    Some time ago (OTC:MFON) acquired a patent that converts phone numbers to website URL’s (and back again). This technology is used by a multitude of web-based companies. I have spoken with management about this and I understand that they are now undertaking measures to monetize the patents. This could be worth millions.

     

    * Sybase is a world leader in delivering enterprise and mobile software to manage, analyze and mobilize information for business intelligence. Sybase is owned by SAP, the world's largest business software company with a market-cap of $62 billion.

     

    Visit (OTC:MFON)’s comprehensive website: http://www.commercetel.com

     

     Disclaimer: I intend to buy shares of CommerceTel in the open market.

     

    On The Market’s Safe Harbor Statement: Statements contained in this document, including those pertaining to estimates and related plans, potential mergers and acquisitions, estimates, growth, establishing new markets, expansion into new markets and related plans other than statements of historical fact, are forward-looking statements subject to a number of uncertainties that could cause actual results to differ materially from statements made.  On The Market is a wholly owned subsidiary of Faessel Publications LLC and provides no assurance as to the subject company's plans or ability to effect any planned and/or proposed actions. Faessel Publications LLC has no first-hand knowledge of management and therefore cannot comment on its capabilities, intent, resources, nor experience and makes no attempt to do so. Statistical information, dollar amounts, and market size data was provided by the subject company and related sources believed by Faessel Publications LLC  to be reliable, but Faessel Publications LLC  provides no assurance, and none is given, as to the accuracy and completeness of this information. Disclaimer: ON THE MARKET / Faessel Publications LLC is not a registered Investment Adviser or a Broker/Dealer. Readers are advised that the information in this report is commentary issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy. The opinions and analyses included herein are based from sources believed to be reliable and written in good faith, but no representation or warranty, expressed or implied is made as to their accuracy, completeness or correctness. Owners, employees and writers may have positions in the securities that are discussed in the newsletter. Readers are urged to consult with their own independent financial advisors with respect to any investment. All information contained in this report should be independently verified with the companies mentioned. Readers are cautioned that small and micro-cap stocks are high-risk investments and that they may lose all or a portion of their investment if they make a purchase. Certain of the statements in this commentary may be considered forwarded looking statements. ON THE MARKET/Faessel Publications LLC makes no representation and provides no assurance or guaranty that such forward looking statements will prove to be accurate. Statements of opinion and belief are those of the authors and/or editors of this report, and are based solely upon the information possessed by such authors and/or editors; no inference should be drawn that such authors or editors have any special or greater knowledge about the company or companies profiled or any particular expertise in the industries or markets in which the profiled company or companies compete. The reader should verify all claims and complete his own due diligence before investing in any securities of profiled company or companies. ON THE MARKET / Faessel Publications LLC makes no recommendation that the purchase of securities of company or companies profiled in this report are suitable or advisable for any person or that an investment such securities will be profitable. In general, given the nature of the company or companies profiled and the lack of an active trading   market for their securities, investing in such securities is highly speculative and carries a high degree of risk. An investor in such securities should be prepared and able to bear a loss of his or her entire investment. Nothing in this report should be construed as an offer or solicitation to buy or sell any securities of any profiled company. ON THE MARKET / Faessel Publications LLC undertakes no obligation to inform readers about the ownership or trading activities of it or its employees or affiliates in the securities of the profiled company or companies. We encourage you to review the investing information available at the Securities and Exchange Commission ("SEC") website (http://www.sec.gov) and the National Association of Securities Dealers ("NASD") website http://www.nasdr.com. You can review all public filings by the companies mentioned at the SEC's EDGAR page. The NASD website includes helpful investor awareness and educational information. The information, opinions and analysis contained herein are based on sources believed to be reliable but no representation, expressed or implied, is made as to its accuracy, completeness or correctness. Past performance is no guarantee of future results. This report should not be used as the basis for any investment decision. Faessel Publishing LLC is receiving from third parties a monthly fee of three thousand five hundred dollars and a provision for stock options as compensation for the distribution of this commentary and other advertisements. Since we are receiving compensation in the advertised company there is an inherent conflict of interest in our statements and opinions and such statements and opinions cannot be considered independent.

     

     

     

     

     

     

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