Having an OTC listed company uplist to the NASDAQ is one of the more transformational events that can happen for a public company. Only a select group are able to make that transition, of the approximately 5,800 OTC listed companies, only around 20 per year graduate to a higher exchange per year. Grand Perfecta, Inc. (OTCPK:GPIW) is a company that many people are looking at as being able to make that evolution and reach the next level, and below we examine why they can do it and other compelling reasons to own the stock.
Grand Perfecta, Inc. is an online gaming company based in Japan and the United States offering fantasy sports, data analytics, and online and mobile gaming. The company's technologies enable customers to play along with multiple sports in every region of the world. Theses sports include, Horse Racing, Sumo Wrestling, Basketball, Soccer, Football, Motor Sports and Baseball. GPIW had $15.5M in sales last year, and is expanding its offerings and locations to meet growing demand.
There are many reasons to own shares of GPIW, including:
Uplisting opportunity to the NASDAQ. In order to qualify for the NASDAQ, the biggest item a company needs to have is Total Common Equity of >$5M. Very few OTC companies meet the threshold, but GPIW has Total Common Equity of +$4M, and a Preferred Stock of >$2M that is being converted into Common Stock, which means that they will exceed this threshold shortly. This is a big deal, as GPIW being on the NASDAQ will immediately give it a larger audience than it has now. A recent very successful example of a Company that did it is a California medical device company, Viveve, Inc. (NASDAQ:VIVE) which moved onto the NASDAQ from the OTC markets in June of this year. Their stock went from $5.00 in June to $9.00 as of September 1 st, 2016 (an increase of +80%). Their trading volume went from an average of $20,000 for the month of May, to an average of $300,000 a day in August. Almost all of this increase was due to having their NASDAQ listing, and having exposure to much larger audience of investors.
GPIW is Worth ~$2.00. GPIW has a peer called Gigamedia Ltd. (NASDAQ:GIGM), a Taiwanese provider of online and mobile games which trades at a multiple of Equity Value / LTM Revenue of 3.3x (Equity Value is the Market Capitalization and LTM Revenue is Last Year's Sales). If you were to give the $15.5M in Sales from GPIW and give it the same 3.3x multiple it deserves, then you are looking at a stock price target of $1.70 - $2.00. As more people understand the GPIW business, the growth they are experiencing and its similarity to GIGM, the stock should move in that direction.
Upcoming News Events. While the NASDAQ uplisting should be a major catalyst to the stock, there are other very interesting things happening at the Company. The explosive growth of Fantasy Sports in the US and around the world has been impressive, and GPIW is very fortunate to be in that business. GPIW has recently been expanding its number of offices to meet the demand for this growth, establishing a major presence in the US to compliment its business in Asia. GPIW has grown from its original offices in Japan, to now Hong Kong, and now two new offices in Nevada and one in California in the United States. GPIW has been expanding its locations to respond to the growth in their business opportunity.
Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in GPIW over the next 72 hours.