Paltalk Inc (PALT)

[Jerry_Jacobs1]

From PCC - 11/24 - Buy Paltalk (PALT) - Paltalk approached by suitor may be other indications of interest. Timing of recent sell off suggests stock may be being suppressed by parties seeking to buy the company cheap, seizing on weakness following stock sale to maneuver it lower. PALT sold stock to have cash for acquisition(s), will be entering NFT space and we expect this to be transformative. No intel on target (Props NFT WIP?) but could have Q4 impact and balance sheet transformed in 22.

The skinny - Paltalk sells "virtual gifts" that can only be gifted (not sold) inside the network, with sale of $10.5m+ over last two years, but even higher annual sales prior to merger with Snap. Execs say drop-off was due in large part to focus shift to blockchain dev. Expect sharp revenue spike when NFT version goes live and resources allocated to that line. If demand for $5m+ for virtual stickers that can only be gifted inside the network, how many will they sell of NFT version that can be traded and sold for profit on NFT exchanges? These have near 100% margins, expect to double virtual goods (both stickers and NFT version) sales upon intro but we think that may be conservative given what was sold in prior years and retail demand for NFTs in primary and secondary markets.