DD on SPCL – Super Value here.. Courtesy of HokieHead
With the pending reverse merger and splits involved I decided to analyze the change in share structure, give details on the share structure and most importantly come up with a valuation of the current shares.
My valuation on the current shares places the shares at a target of $0.0022 (worse case) to $0.0263 (best case), that’s a 633% to 8,667% gain. Below I will show how I came to these figures. Say I’m crazy but this reverse merger (look at the merger, not the split!) is a mother lode.
Let’s look at the share structures first:
Authorized: 2.17 Billion
Commons: 2.16 Billion
Preferred: 10 Million
Outstanding: 1.83 Billion
Current PPS: $0.0003
Current Market Cap: $549,000
Authorized (1/10): 217 Million
Commons (less preferred): 207 Million
Preferred (no change): 10 Million
Outstanding (1/100): 18.3 Million
Post-Merger/Split PPS (1/100): $0.03
Post-Merger/Split Market Cap: $549,000
Until we see the financials on the new company, from the DD I’ve done, PixelMags revenues are in the $48 million range and growing. These 3 sites confirm it:
I kept the valuation of the incoming company to a 1x sales valuation for simplicity. Price to Sales ratios in the Software & Programming industry average anywhere from 4-9x sales so I’m low balling this as well.
Putting a $48 million market cap (1x sales) on the post-merger company with the post-split outstanding of 18.3 million shares, that would place the PPS at $2.63 ($48m/18.3m os), or $0.0263 pre-merger/split, that’s 87x higher than the current PPS.
Putting a $48 million market cap (1x sales) on the post-merger company with the post-split shares maxed out at the 217 million authorized shares (maxed out but I don’t see this happening), that would place the PPS at $0.22 ($48m/217m as), or $0.0022 pre-merger/split, or 7x higher than the current PPS.
Let’s wait the see the filings, etc. but currently SPCL is 7-88x undervalued at this level imo. Those that are only looking at the reverse split and saying this is a bad thing are caught in the penny scam mindset that all reverse splits are bad. Look at the incoming value of the merger! The current SPCL shareholders will own just over 8% of the incoming company. This will be a company with $50 million in revenues and growing, 217 million shares authorized, 18 million shares outstanding and only a $550,000 market cap. Even if you maxed out the shares to the authorized post-split (won’t happen) you have only a $6.5 million market cap. That’s trading at .13x sales, cheap!
This imo is like getting in on a big technology IPO at inside ownership levels. Do some DD on PixelMags; this would be a hot hot play if they were coming public through the more expensive IPO route. The reverse merger route is cheaper and better for everyone involved. I would rather own 8% of PixelMags, a possible hot tech play (FB, GOOG, etc.) that will most likely up list to a major exchange and garner a market cap in the $100’s of millions than 100% of SPCL, or basically nothing.
Anyone remember TTC*, announced a merger with a software company and with close to 3 billion in outstanding shares ran from $0.0004 to $0.037 in a few months. $1,000 invested there at $0.0004 went to $92,500 at $0.037.
That company did not already have close to $50 million in revenues like PixelMags has, had a bigger share structure and still ran almost a 100 times higher. SPCL will be bigger. If you own and have shares at this level congrats, I think big things coming here in the next few weeks and months. Don’t let anyone try and talk you out of your shares.
On 5/23, we saw an 8k outlining a share swap/Reverse Merger that places PixelMags (pixelmags.com) into the SPCL shell. Pixelmags is a content creation and distribution company that is described in the pixelmags story (https://vimeo.com/53719355) as the "world's largest digital distribution company." The market for digital magazines is projected to be 35b/year by 2020 (see the learn more link).
What they do is provide print publications (magazines,catalogs, other) reformatting services and a distribution system so those magazines can be read across several platforms--apple, android, PC, and soon the new blackberry. They also allow people to upload and publish their own original content for distribution. The have revenues from content creation, content distribution, ads, and, of course, user data.
This will give some insight into their market: Pixelmags media kit:
30m in sales. Pixelmags Founder LinkedIn page: https://www.linkedin.com/in/rymarquis
Great success in everything he has been involved in...
This is the most interesting part:
"Prior to Plastc Ryan co-founded PixelMags, where he led the commercial operations of the business from inception to a business generating over $30M in digital magazine sales annually."
30m/year ... and they continue to grow.
Read this to learn more: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=124661543
* Pixelmags Financials due soon...
From 8k of 5/23:
"Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
The financial information required by this Item 9.01 is not being filed herewith. It shall be filed not later than 71 days after the date on which the acquisition of Pixel contemplated by this Current Report on Form 8-K is consummated."
When was in consummated or closed?
"The closing of the transactions under the Exchange Agreement (the “Closing”) will occur on or about May 31, 2016, unless a later date shall be selected by the parties"
If "on or about" 5/31, then financials likely arriving THIS MONTH and THIS WEEK.
Click here to zoom in on daily chart