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Dustin Moore is a researcher and analyst focusing on overlooked and undervalued investments. He enjoys analyzing under-the-radar companies with massive upside potential and those with favorable risk/reward ratios. On Twitter! @dustinrmoore https://twitter.com/dustinrmoore
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  • Summary of Elephant Talk Conference Call 0 comments
    Dec 16, 2010 12:35 AM | about stocks: ETAK

    On Tuesday, Elephant Talk Communications held a conference call providing greater detail on the Visa Europe agreement, the recent partnership with KPN, as well as the overall progress of the company progress in 2010.  This provides clarity for shareholders and a “cheat sheet” for new investors.

    Here are the highlights:

    -Visa Europe agreement

    ValidSoft’s solutions are currently being integrated into Visa Europe’s processing platform. When complete, Visa Europe will offer the solution as to their 4,000 member banks and payment service providers across Europe. 

    The company sees the agreement positioning them as “…a global leader in credit and debit card fraud prevention.”

    The deal was instrumental in creating credibility.  Thus, management “…anticipates other agreements will follow in the near future.”

    -KPN Belgium-

    ETAK just announced a hosing agreement to become the MVNE of KPN in Belgium.

    -Milestones

    Vodafone Spain- Migration of customers will be complete by first half of 2010, resulting in annual run rate of $7 million.

    T-Mobile Netherlands- T-Mobile saves 50% by using Elephant Talk’s platform. There will be 100,000 subscribers by the end of 2011.

    Financial/Business Outlook

    Convertible promissory notes have been converted into equities.  Shareholder equity shifted from -$28 million to +$28 million.  This will facilitate and uplisting in 2011, which appears imminent.

    The CEO expects to become positive cash flow from operations by mid next year.

    Expect a total of 700,000 subscribers by the middle of next year.

    Foresee several mobile operating partnership agreements in 2011.

    Other Noteworthy Items

    “No competitors in sight” -The company has the only technology capable authenticating a transaction within the 500 millisecond window for a transaction to be approved or declined.  The only system that is implemented in real-time.

    They already have the capacity to handle 400,000 transactions per second! (More than enough to process Visa Europe transactions)

    The company’s ultimate goal (and how I see the market eventually ending up) is to have ValidSoft technology laid on top of current mobile infrastructure.  This will be a paradigm shift where Elephant Talk will determine authentication of all transactions.  This will save banks money by increasing accuracy as well as minimizing their exposure to fraud.

    Within Europe alone, there are 100 billion transactions per year.  If they become fully integrated on they will be servicing every transaction.  At 1 cent per transaction, this results in recurring revenue of $1 billion per year in Europe alone.  This example is only to demonstrate the size of the market that Elephant Talk could service.  As far as pricing, they would expect a “hell of a lot more” than 1 cent per transaction.  They were clear shareholders should only take this information as indicative of the industry size.  However, they do believe down the road they are extremely well positioned to take this market with their technology, patents, and privacy seal.

    There are estimates that 50 billion devices will need access to the mobile cloud in the future.  These will consist of mobile phones as well as vehicles, electric meters, copiers, and other machines.  Non-telecom companies will therefore need access to the cloud.  Elephant Talk is uniquely positioned to open up the mobile cloud for them, manage it, and make it secure.

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