Interesting company which seems to be making some nice moves and decisions. It has been a few things in its time - it started out as SharonAustin.com with the ASX code of XXX, went through a metamorphosis to become Gallery Global Networks (then ASX : GBN) and then in the last quarter finally got rid of all the old adult assets to focus on the growing mobile content business, changed its name to MobileActive and code to MBA.
If you have Foxtel, then you would have seen this company - they sell ring tones, games, wall papers and advertise a fair bit on Foxtel. Their ads are the ones with the cartoon girl. The advertising is a bit like the Jamster Mobile Ads (yes, the company with that Crazy Frog) and you can also see them in some targeted press / magazine advertising.
The sale of the adult assets plonked a couple of million dollars into the bank account, so these guys seem to have some cash around to support their business objectives. I look forward to their next reports to confirm, but the share price at 0.05 seems to be well backed by cash.
I like the business - it seems to be all about licensing deals and yields on advertising. If a campaign falls below the required yield then they adjust, stop or start a new one to make sure the numbers stack up. I assume that the licensing is mostly done on a share of revenue and so much of the costs would appear to be marginal (can anyone confirm?) In any case, I expect that fixed costs and overheads would be pretty low and will decrease as revenue grows. I would also assume that this is the sort of thing which can be leveraged into international markets as the business grows, provided the company has the license deals in place.
The main constraint I can see is the lack of historical performance data to go on. As mentioned above, the adult assets were only sold last quarter and so the historicals are a bit of a mix of several businesses and I haven't been able to get a clear picture of what the mobile business (the one they appear to be going forward with most) really does. Will be watching through the next couple of quarters.
Welcome the thoughts of others. I have bought some GBN (now MBA) a few months back.
GBN Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
