The number of videos produced has grown from 6,000 to 21,000in the last 12 months. I believe much of this was prior to the explosion in staffing numbers which is significantly focussed on overseas growth. This augers well for continued growth in new subscribers, but I'm particularly interested in how many of the current members sign up again for a new 12 months subscription. If the churn rate is high that might indicate that BIG will struggle longer term under the current business model, which by the way I'm not suggesting is or will be the case. If BIG can manage 25% growth from quarter to quarter over a sustained period of time, annual cash receipts will soon exceed $15-20m, but they will need to be at that level in order the justify 95 staff. That equation would see quarterly cash receipts grow to $5.6m after another 4 quarters at which time the company might be making a profit. I think renewed subscriptions are key to making this happen. I'm keen to find out what the new partnership is that will help drive further growth. It is difficult to assess what the fair valuation of this company is, but I suspect it is currently on the low side.
BIG Price at posting:
10.0¢ Sentiment: Buy Disclosure: Held
