First Global Data (FGD.V) coverage was initiated on May 3rd with additional notes on May 10, June 15, and September 20.
Since our last update, the following releases were issued.
Sep. 26 - MOU with China Smartpay to deliver cross border payment solutions. Oct. 2 - Announced New Chief Financial Officer (CFO) - Vicki Ringelberg. Oct. 10 - Reports two more money transmitter licenses: South Dakota and New Hampshire. Oct. 31 - MOU with Mobi724 Global Solutions Inc. for development of payment solution for Philippines and countries in Latin America.
FGD.V reported that they expected formal agreement to be complete before year end. Nov. 3 - CFO resignation - Ms. Ringelberg was on a 2 day a week commitment, both parties have agreed that FGD.V needs a full-time CFO. Nov. 14 - Launch of online money transfer service in Canada - to Guyana, Jamaica, Malaysia, Philippines, and India.
Also announced state licenses for Washington, Wisconsin and Washington DC granted (total now is 34). Nov. 23 - Reports 1M users and provided corporate update. FDG.V targets a ARPU $280. Nov. 27 - Former CFO (Nayeem Alli) returning until April 2018 on a part-time basis. Previously, Mr. Alli stepped down due to health reasons.
Peter Lacey to replace Mr. Alli on the executive board - Mr. Lacey is founder and Chairman of Cervus Equipment Corporation (TSX:CERV) Nov. 30 - Q3 2017 Earnings: Revenues $4.5M, Income (35K), $18.4M in current assets inclusive of $3.7M cash.
Dec. 15 - Insider Peter Lacey reported to have bought 139,000 shares at $0.215 (almost $30K worth).
FGD.V has categorically under-performed by the standards it has set for itself this year. The CEO forecast for the year was $140M in revenue.
Thus far, the company is on track to deliver $16M. That's quite the gap!
Also in the recent corporate update (Nov. 23) FGD.V announced a ARPU target of $280. The assumptions behind this target are unclear. In addition, there is nothing in the latest earning (Nov. 30) which suggest this. Should FGD.V wants to track ARPU, it should include them in their next financials. These issues need to be urgently addressed by FGD.V as it impacts their credibility and shareholders expectations.
In addition, the way FGD.V has communicated the latest CFO transition and the looming legal dispute leave much to be desired. Again, resolving these self-inflicted wounds should be a priority for the company to restore shareholder confidence.
Nonetheless, the recent financial update showed a 32% growth from Q2. This type of growth is what the market had been expected this year. Though late in the year, we consider these results as positive. In fact, we're still bullish on the company's prospect for three reasons: a) "white label" business model, b) the growing number of partnerships (16 - see below) and c) the number of US licenses for remittance and money transfer (34).
1) Vijaya Bank (India)- powers mobile transactions for 12 million potential bank customers.
2) Hidase Telecom (Ethiopia) - powers mobile transactions for 20 million potential users.
3) SelectCore (Canada)- Created a joint venture for Canada (FintechUnion).
4) Aamra (Bangladesh)- Agreement for mobile wallet and ecosystem for 14 potential local banks.
5) eGTCP.com (China)- MOU to provide mobile payment services >15,000 potential vendors.
6) Dill Capital and IBS (Nigeria) - build mobile payment services for 10 million potential users.
7) Zoompass (Canada & USA) - LOI for check processing services and loading mobile wallet.
8) Telkash (Canada, USA, UK, Philippines, Vietnam) - Partner to enable remittance and payment
9) Payability (Canada, USA) - Partner to enable remittance and payment.
10) Mobile Lads (USA) - Partner to enable remittance and payment (FGD,V has 36 US state licenses).
11) LianLian Pay (China) - Co-Branded Cross border remittance (Canada, US, to China) via WeChat.
12) Avenue Payment (India) - Agreement to provide remittance and payment via Avenue Payment.
13) AnalytixInsigth (AI) (Canada) LOI for inclusion of AI product and access to Italy and Samsung.
14) ImpalaPay (Kenya) White Label mobile wallet with addressable market of 50M users launched.
15) China Smart Pay Group Holding - MOU to enable remittance and payment in Canada and USA.
16) Mobi724 Global Solutions Inc - MOU for solution in Philippines and some Latin America countries.
We believe that once adoption from some of these deals takes hold, the revenue will aggressively grow. There is a high likelihood that this occurs in 2018.
As per indicated by the chart above, after the Q3 Earning, there was a decline in the stock price (i.e. negative RSI, declining volume, and a sell cycle) but the recent insider purchase has counteracted the trend. Despite, Friday's activity we expect FGD.V to test S1 ($0.205) before year end - the share count (>250M), the 52 week high ($1.00), and the end of the tax loss seasons (Dec. 22) are potential catalyst. However, there is also the possibility for the closing of the partnership with Mobi724 Global Solutions Inc. as it was reported to happen before year end.
A detailed look at Friday's price activity suggest that the rise only occurred in the afternoon.
Also, only three trading house (7, 85, 99) accounted for the bulk (88%) of the Total Buy Qty. The Net Buy Qty by the same account for only 35%.
All others (except 124) showed a Negative Buy Quantity.
Below is our forecast for the week. Notice how the three recent price cycle led to subsequent decline. Definitely, an interesting week ahead.
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