Conference / Meet & Greet Update !

Opening Disclosure — Long-time readers should note some significant changes in how I communicate in the public domain. The primary purpose of this forum is now to attract new contacts with professional industry expertise to share research and receive feedback (confirmation / refutation) regarding my investment theses.

Accordingly, this document should not be construed as an endorsement or recommendation of the companies or securities discussed herein. I am not an investment advisor and this is not an investment thesis. It is merely one part of the story, which I present for debate in hopes of determining all risks and upside potential. The disclosure at the end of this piece is critical to understanding the content and context of this document. Further, I frequently trade my positions and may buy, sell, or short the securities mentioned herein at any time, regardless of the facts or perceived implications of this article.

 

CHANGE NOTICE!!  Due to scheduling conflicts, I have to change the timing of my Meet & Greet. It will still be today at the West Restaurant & Lounge (in the Hotel Angeleno) 170 N Church Lane in Brentwood, CA, but it will now be from 11:15AM until 12:30PM.

 

OK. Let’s get down to business.

For the second time in as many days I warned investors not to be shaken out by “scary issues” regarding SMSI… and for the second time in as many days, those who listened were rewarded. Once again, the stock opened the day lower, but quickly reversed and ripped higher.

Those who allowed themselves to be shaken out got left behind as SMSI powered forward.

I don’t know if the so-called “issues” were being raised by short sellers, people who want to go long cheaper, or folks who just don’t know better. All I know is that the thinking was all wrong. Enough said.

As I wrote yesterday, it’s been a very successful conference for SMSI. As you can tell from this week’s volume, I believe that conference attendees (professional investors and institutions) were / are accumulating shares at a heavy pace. Interestingly, not everyone has even met with the company yet… and those who have haven’t had enough time to fully digest what’s happening.

 

Heck, even I haven’t fully digested it all yet.

To help with wrapping my arms around it all, I met with several CEOs here that also sell applications through carriers. The implications of that were quite bullish. In fact, one company sold 5 MILLION subscriptions through one carrier (a much smaller one than Sprint) in just three years.

If you’ve walked through my model and research, you can run the math on what a similar outcome would mean for SMSI at Sprint. If not, I’ll do it for you in the coming days (hint: it’s big).

In the meantime, make sure you check out what Sprint and AAA just released!

Also, if you didn’t read it already, be sure to read yesterday’s post. I’ll likely spend the next few days elaborating. As I stated above, even I haven’t fully digested the complete ramifications of what I’ve learned this week. I just know that more and more Sprint stores are ramping up by the day… and most of them are experiencing great success with Safe & Found.

More details tomorrow. Stay tuned!

 

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Disclosures / Disclaimers: I am long SMSI. However, this is not a solicitation to buy, sell, or otherwise transact any stock or its derivatives. Nor should it be construed as an endorsement of any particular investment or opinion of the stock’s current or future price. To be clear, I do not encourage or recommend for anyone to follow my lead on this or any other stocks, since I may enter, exit, or reverse a position at any time without notice, regardless of the facts or perceived implications of this article.

I am not a financial advisor. Nor am I providing any recommendations, price targets, or opinions about valuation regarding the companies discussed herein. Any disclosures regarding my holdings are true as of the time this article is written, but subject change without notice. I frequently trade my positions, often on an intraday basis. Thus, it is possible that I might be buying and/or selling the securities mentioned herein and/or its derivative at any time, regardless of (and possibly contrary to) the content of this article.

I undertake no responsibility to update my disclosures and they may therefore be inaccurate thereafter.  Likewise, any opinions are as of the date of publication, and are subject to change without notice and may not be updated. I believe that the sources of information I use are accurate but there can be no assurance that they are. All investments carry the risk of loss and the securities mentioned herein may entail a high level of risk. Investors considering an investment should perform their own research and consult with a qualified investment professional.

I wrote this article myself, and it expresses my own opinions. I am receiving no compensation for it, nor do I have a business relationship with any company whose stock is mentioned in this article. The information in this article is for informational purposes only and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.

The primary purpose of this blog/forum is to attract new contacts with professional industry expertise to share research and receive feedback (confirmation / refutation) regarding my investment theses.

59 thoughts on “Conference / Meet & Greet Update !

  1. Yeah, the email I sent you was pertaining to this article, I didn’t see the 2 “credits” at the bottom before I posted my comment, I did look just for this reason, but as you are aware I’m not seeing everything I see, but I got your back

    Liked by 1 person

  2. Mark, have u met with Celsius mgmt. yet? I know you have too much on your plate already, but was going to ask if you’d mentioned my comments and lack of response (still) from IR

    Like

  3. Hey Mark,

    I’m thirsting for your updates from this week’s conference! Please share with us the juicy details 😉 ;).

    Like

    1. I understand, but you have to understand that I have a lot going on. I do this for free so if you want to hire me as a consultant at my standard rate of $1500 an hour I’ll be happy to prioritize your needs over mine.

      Otherwise, please refer back to what I always say about 1) not taking requests and 2) putting information out as soon as I possibly can.

      I don’t mean to pick on you in particular, but every once a while I have to remind folks that 1) this is a free service and 2) I have a life 😇

      Plus, I give myself the right to place my trades before sharing my work… and it’s been a LOT of work over the past few days 😉

      Don’t worry… it’s coming. 👍🏼

      Liked by 3 people

      1. HAHA what do you mean this isn’t just about us bugging you to get information when we want it??? With all due respect – fair enough Mark, I’m not trying to be pushy or anything, but rather am just looking for an update on the news. I’m a pretty straight forward guy, so sometimes my requests will come across as demands but I’m just saying what’s exactly on my mind. That being said, I will be PATIENTLY looking forward to your next update (Y).

        Cheers

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        1. Good response buddy. I know you didn’t mean anything negative by it. I only picked on you because I just don’t want people to get into the habit of pushing me for information. I get it out as quickly as possible. 🙌🏼

          Liked by 1 person

      2. Appreciate you keeping us updated. Can’t wait to hear the updates from the conference, not only SMSI, but what new companies that are on your interest list.

        Liked by 2 people

  4. With the shares currently down .19 at $2.41 I can see where it would drop back to ~$2.12 as solid support, I don’t want to watch it drop another ~10% I’m OK if it turns around and goes thru the high of $3.41, we’ll see but below $2.12 on this decline would not be positive. We shall see, either way I agree it should be much much higher by year-end

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    1. Greg, you’re thinking like a technician, which has the potential to be dangerous when dealing with a stock like this.

      Put another way… I hope to God the stock goes back to $2.12 😂 and I’m not going to sell under the assumption that it MIGHT.

      The reason is simple. I think the stock is worth a lot more (and was buying this morning). That’s about all I can say right now (very busy).

      More details soon. 😉

      Liked by 2 people

          1. I struggle to see my average price go up by buying more shares at a higher price than my average.

            I will say I get a good sense of your conviction to this stock through your comments though.

            Like

          2. I don’t know my average price and I don’t care. If I think the stock is going to 6 or 10 or 20, who cares what my average price is,as long as it’s less than 6??

            Like

          3. Well that answers the question of how did the meeting go. I’m going to use the pullback to try and snag some Jan. calls tomorrow. They took a good beating today.

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          4. I assumed that you bought a lot more based on one-on-one chats with Smith personnel. I’m going through your video “Why I loaded up Today”. Awesome work! Can’t express enough thanks.
            Get some rest dude.

            Like

  5. Mark, I just had to write a comment about those who are fearful of pullbacks. Pullbacks in micro cap stocks are typically a lot more severe than large cap stocks. The REAL reason for investing in this little gem, is for the long haul. I view pullbacks as gifts to buy more stock but only if the story either remains the same or better yet, becomes even more bullish. In the case of SMSI, IMHO the story has gotten even more bullish. The results of the conference call and the amount of interest generated has given us the opportunity to remove some risk. Why sell now?

    Liked by 3 people

    1. Agree and disagree. While the LT potential is certainly tremendous, there are too many things out of SMSI’s control for them to happen (Sprint doubling its base, T-mobile merger doubling the Sprint base, etc). For instance, I think the price was down today because of the DOJ scrutiny regarding the merger. ST hedge-fund reactionary.

      In any case, the only thing we can do is determine the price based upon what we know, anything beyond that is a bonus. What do we know (and Mark or the company will eventually elaborate on how many of the 350k subscribers moved over), is that Bill was emphatic that the Sprint rollover is happening. That means a company with $5.5m in quarterly revenues is about to jump to $9m in quarterly revenues. If we use Mark’s model as a guide, that gets us to .05/share profit per quarter, or .20 for the year. Even a low 20PE means the stock is worth $4, assuming most of the 350k rolled over. A 30PE means $6. If we want to get crazy, 40PE = $8.

      Mark’s 2019 implied model with $50m in revenues and .50/share is based upon Sprint doubling its base to 700k. SMSI has zero control over that, but it is nice to dream. Until then, is it irresponsible to say a 100% move from these levels is a given, based upon the known variables? In other words, at 2.50 or 2.30 or 2.12, Buy Mortimer, Buy.

      Like

          1. I’m going to reward my closest followers (you folks here on this comment thread) by telling you first — my update video is now live on YouTube 😉

            Will probably put it out via a public post during the mid-morning tomorrow.

            Liked by 5 people

          2. p.s. Please don’t share the YouTube video link in a public forum. I want to be the one that releases it publicly.

            You can share it individually with friends and family, but if you respect the work I do, please let me be the one who posts the link publicly.

            🙌🏼 Thank you!

            Like

          3. One thing I would comment on about your video.

            Your regional sales managers will eventually hit all of their stores, but their training will not necessarily stick and frankly will be low impact. It’s all about the District level supervisor (the person directly over the Store Manager) and how strongly they train and push the product.

            Also to add to that comment, it is my opinion (based on years of experience) that the superstar sales people who do get 50%+ attach rate will represent 20% to 30% of the sales force nationwide. The other 70% to 80% will do the minimum or less than the minimum to get by and that is where all the turnover is and will continue to be.

            The other thing to consider is that there will be stores and entire districts of stores that may completely ignore this product because they are superstars selling a different add on product and their management is ok with that.

            So anyway, not trying to dampen the mood, but some things to consider that may cause the pace of new customer growth to be slower than some may be expecting. All of that said, 350k per year may be achievable even factoring all of this in.

            I am going to visit a few stores soon and see what I can dig up on sales, expectations, etc. that might be useful to know.

            Like

          4. Do the math and you’ll see that I baked in very conservative expectations. 350,000 subs per year is about 1,000 per day… which means that each store only needs to add one subscriber every four days to hit that number.

            If some stores can do 4 in their first day and others can do 2 EVERY day, They won’t need a high percentage of performers for the average to be above one per four days.

            With the incentives and mandates in place, I really think the average can exceed double that figure (750,000 to 1,000,000 subscribers per year).

            One of the CEOs I spoke with gained 1.8 million subscribers per year selling an app into a carrier account that’s less than half of Sprint’s size… 🔥🔥🔥

            Like

          5. I am not disputing or supporting your assertion. I am saying that doing the math does not tell me if your number is conservative or not. There are more factors I would need to know as I described in my post. Or we could just take managements word that they will add 350k per year and maybe that is good enough. Do you have additional information making you confident in this number or would it be useful if I could try to gather some more detail on the sales culture?

            Like

          6. No offense taken.

            Management hasn’t said that they will add 350k per year. All of my estimates come from triangulating a plethora of data points, as I always do.

            I’ll be providing more details in the posts to come. I may write a lot, but I don’t tell everything I know 😉

            Liked by 2 people

  6. Mark,

    Thanks for recommending the Oct. Call options at 40 cents. Grabbed 100 of them a few days later at 30 cents each after weighing out options and reading all your posts.

    Rob

    Like

  7. Mark – I know you addressed this once before and I did spent time scouring your past articles trying to find it, but I just can’t put my finger (or eyeballs) on it. Can you tell me once again how you were able to glean that the licensing fee is $3.50 per customer for SMSI from Sprint? I am quite aware of Smith’s repeated guidance of 3.5 million quarterly revenue after “conversion” of the existing subscriber base and I know you estimate 350k subscribers at Sprint, but as far as I can tell that 350k nor the 3.50 was never verified by Smith. At least not publicly. Thanks.

    Like

    1. Smith provided guidance on how much the Sprint installed base will give them per quarter.

      Separately, I was able to triangulate how many subscribers there are at Sprint (through various sources).

      From there it was simple division.

      Liked by 1 person

  8. Mark…was that carrier charging $10 a month for their app? Sprint is charging this amount and imo this is a pretty expensive add-on when you consider how reasonable Sprints rates are in general. I believe that price point is too high.

    Like

    1. Let me be a bit more detailed. Sprint is charging $9.99 a mo for new customers. I understand they did not change the price for existing customers who are transferring over from their legacy product.

      Like

      1. Allow me to be blunt…

        Who cares what they charge? More importantly, who cares what YOU think about what they charge???

        I thought (and still do) that GAIA’s content is GARBAGE. Like National Inquirer CRAP… but the numbers said, “FU Mark, a LOT people LOVE it”!

        So, I said, “FU, Mark… listen to the numbers”, and made 56% (strong 6 figures) in 6 months.

        I’m not here to have my personal preferences validated. I’m here to make money. If you’re here for the same, you’ll have to check your biases and fears at the door.

        The data is SCREAMING at me, so I’ve made up my mind. I don’t care what anyone (including my own mind) says, because the feedback I’m collecting from Sprint stores is coming back louder than a bomb.

        For the record, I disagree with you. I’ve tested the product and think $10 is a no-brainer for what it does (and what it’s gonna do)… but again, what I think is meaningless. The data is telling me what’s happening, regardless of what you or me think.

        Neither 1 (nor 2 for that matter) is a statistically significant sample size. You want data, pick up the phone and connect with 200 stores. https://en.m.wikipedia.org/wiki/P-value

        I’m working towards that number.

        Liked by 1 person

        1. Biases? Fears? You don’t know me b/c it’s neither. I fully understand you are basing your opinion on the numbers. At this stage of the game, while the numbers are looking good, the number sampling is much too small for me to be convinced of anything. Time will tell. The next six months should give me/us a much clearer picture of how the subscription transfer/new sign ups are going. Btw…don’t hold back next time, tell me how you really feel lol.

          Like

          1. LOL. FWIW, I didn’t mean YOU when I said your biases and fears.

            When I respond to a comment, I speak to EVERYONE who follows me. With thousands of followers, I can’t address each person personally. I select questions that hit at the heart of investing success and preach to it.

            Speaking of which, there’s nothing wrong with waiting for more data. You’ll likely pay a lot more for the stock if it’s good, but comfort is a matter of taste. Some people are angel investors and some are dividend collectors. We’re both in between, with you being a just a bit later stage than I.

            From a risk/reward perspective, both can be spot on 👍🏼

            Like

      2. Sprint markets this as a location app with parental controls. imo, most parents would tell you the gold here is the parental controls.
        Limiting apps, screen time, incoming calls, websites….that’s gold and worth the $7. Location is bonus.

        Liked by 1 person

        1. AGREE!!…. and I wouldn’t even call location a bonus. Location is a free commodity… and so will Control before long.

          SMSI is staying ahead of the curve, keeping it all on one VERY nice platform (of you haven’t used it, you really shouldn’t comment), and partnering with companies that could sell it even if all the functionality was commodity.

          This is the USA, where marketing is more than half the battle.

          Liked by 2 people

  9. I’m not waiting for anything. I’m in with 70k shares at 1.50 – 1.60 and will likely add another 30k shares in the next day or two. I may voice some caution but it doesn’t mean I’m not in. Playing devils advocate has saved me a lot of money in the markets over the years. I question everything as I do in all of my business dealings. Again, thanks for all you do 🙂

    Liked by 1 person

  10. I think it’s been mentioned in SMSI threads elsewhere, but Sprint started a new $15/mo unlimited plan today. When clicking through to checkout, Safe & Found is offered as a suggested add-on with the first month free (not just for AAA members).

    Like

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