STTCOMP CM8, FA LONG Business: Mobile Content, Mobile Payments,...

STTCOMP CM8, FA LONG

Business: Mobile Content, Mobile Payments, Text based Micro Job Q&A Platform,

Area: Listed ASX, FWB. HQ located in Amsterdam with majority of current operations in Europe. Sales now in 54 countries.

Share price: 9.2c

Shares: 176.6m

Options: 49.3m exercisable from 25-39c

MC @ 9.2c: $16.25m

Cash @ 30/9/16: $4.74m

Debt @ 30/9/16: $17.25m

Net debt @ 30/9/16: $12.5m

Undrawn debt facility: $4.75m

EV @ 30/9/16: $28.75m

Revenue Q1: $10.6m

Ebitda Q1: $2.2m

FY16 operating cashflow: $7m

Estimated current cashflow from operations per month: $500k after interest and tax. (personal estimate based on previous earnings only)

A stock that some here will be familiar with, has been punished for obvious reasons, which I will not go into on this thread, however there is some clear commentary in the latest presentation.
Has been sold off and is now looking better. Debt relates to the acquisition of the mobile content subscription business segment which performance to date has not been as expected by shareholders. This segments General manager was replaced in September.

Capital raised at 16c just a few months ago. Directors, including the Chairman participated.

The CEO has stated that revenue is stable and material growth is expected going forward.

Earnings have been declining, however aggressive expansion costs for new products and markets are coming directly from operating profit rather than being capitalised. This is important to note.
I expect return on investment to start flowing through soon.

Some of the catalysts for growth moving forward include:

- continuation of strategic partnership with Viacom, US NASDAQ listed media giant with $15b MC, to leverage Micro Job Q&A Platform using Viacoms brands

- launch into china, happening this quarter.

- launch of new products into existing markets,

-further push into Asia, Africa and Latin America.

-Focus on Digital Influencers with a new product which integrates directly into social media platforms, such as facebook,twitter, YouTube etc. leveraging the Micro Job platform. No app download needed.

- launch of new products/features into existing apps to drive purchases.

-investigation into chatbot, AI integration.

-direct media buying desks introduced for greater control of customer acquisition.

- VR products being introduced to subscription segment.

Bottom line, there is plenty happening behind the scenes as well as maintaining and updating the core earners.
To date management have shown they are nimble enough to follow trends and not continue products that will not see positive cashflow in the mid term. They have proven development capabilities with products reaching top 10 status in the app store frequently. Quality is increasing as the team grows.


The stock gives exposure to current Smartphone trends, being content, payments, distributed workforces, social media communities etc and is profitable.

Company spans 54 countries, 30 languages, has 160 M-payment partner deals as well as apple and google.

Debt will reduce by a minimum of $650k per month from here. Option for payment in both cash or shares.

I have been following this stock for over 18 months now. If there are any questions, feel free to ask on the CM8 thread and I will do my best.

Disclosure: Held