$0.96 - $3.89 per share, how successful will the marketing and influences campaign be? I'm excited to see how big this will be when it takes hold and becomes the next On Trend going viral. You just have to look around and see everyone staring at there phones and the crave for social media. This will reach everyone in someway if done right.
From RAAS report 21st August
Indicative valuation and earnings leverage
MSM is an early stage company, pre-revenue. However, the company has largely met its milestones and has positioned itself to meet its prospectus performance hurdles with the highly influential music celebrity, Usher. Our DCF valuation, based on the company’s 2015 prospectus performance hurdles and driving our revenue and EBITDA forecasts, gives us a DCF valuation of $0.96/share (based on a beta of 1.9, WACC of 14.5% and terminal growth rate of 2%). This is based on the company converting 0.8% of an addressable audience of 22m in FY18 rising to 63m by 2025 which delivers an estimated EBITDA of $5.4m in FY18 and $16m in FY20, a little ahead of the company’s performance share vesting targets. A larger addressable audience, from which to monetise users, is likely to shore up the near term targets. If we were to apply 0.8% conversion to an audience of 120m, the DCF valuation could rise to $3.89/share. However we caution that the assumptions driving the revenue forecasts are untested in the market and this scenario analysis is hypothetical until the business model is proven.
MSM Price at posting:
23.5¢ Sentiment: Buy Disclosure: Held
