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Momentous Entertainment Group Inc (OTCMKTS:MMEG) Is On An Acquisition Spree

Momentous Entertainment Group Inc (OTCMKTS:MMEG) Is On An Acquisition Spree
Written by
Chris Sandburg
Published on
April 27, 2017
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Back at the end of 2016, we highlighted Momentous Entertainment Group Inc (OTCMKTS:MMEG) as being one to watch in the junior tech space. The company was at a pivot point and was just about to execute on this pivot through the acquisition of a couple of German social media platforms.At the time, the company was trading in and around $0.002 a piece, and subsequent to our coverage, markets traded up on Momentous to the tune of 190% to highs of $0.0058. Subsequent to the run, however, the company fell back down to pre-run levels. A couple of spikes aside across the last few months, Momentous has traded pretty flat since the December run, and now goes for $0.0015 – a market cap of $721,000.Plenty has happened since we first took a look at the company, and we think there's some value in an exposure at current levels.Here's what's happened, and what we're looking at as supportive of this suggestion.By way of a quick introduction, Momentous is a media and marketing company that focuses on creating, producing, and distributing entertainment content across various media channels using direct response media marketing. As we noted in previous coverage, the company spreads its content across a host of media formats, including feature film, television, radio, and the internet.It's got a number of projects on its roster, some television shows, some video on demand stuff, but right now (and going forward) these aren’t really that important. Since it acquired the above mentioned German social networks – the deal closed early this year – Momentous has basically pivoted to open up a range of online and fresh media related revenue streams. Specifically, it's done this through a spate of acquisitions, each of which seems to add value above and beyond the company's current market capitalization.The first is an entity called NEUROFUSE, which is an e-commerce retailer that sells nootropic supplements. These are basically drugs that claim to make takers smarter or more alert, and while there's not a lot of evidence backing up efficacy for this sort of thing, they sell incredibly well. NEUROFUSE has more than 35,000 customers, 40% of which are repeat.The second is an already closed deal (NEUROFUSE hasn’t closed out yet), which saw Momentous pick up an online gaming business called Chimera. This one is asset only, and saw the company get two URLs, a games platform with more than 1 million users and 550,000 email subscribers, and the games currently on the platform. The platform reportedly boasts an ADPU (Average Dollar Per User) that exceeds the gaming industry average. A cached page here suggests that Chimera nets $220K annually, on gross revenues of $421K. Again, Momentous is valued at just $700K right now.Finally, here's a mobile ad network called BLACKFOX, which looks to be next in line for acquisition by Momentous. This one's at letter of intent, so we'll take a closer look when it moves towards close and we get some concrete numbers.Basically, this is a company that's very quickly expanding its revenue streams across a host of different income types, and we struggle to see a scenario in which it's PPS doesn’t increase as these streams start to churn out improved numbers. It's not all cut and dry, of course.The problem with a strategy like this is that it generally requires share issue to cover the cost of acquisition, and this one's no different. A look at this 10K reveals the extent to which the company is printing shares to pay for its fresh revenue streams, and the amount it's borrowing to cover the cash side of said acquisitions. It's not pretty, but it's also not necessarily prohibitive to an exposure – especially given the company's current market cap.Far from a sure thing, but we've got it on our subscriber watchlist.We will be updating our subscribers as soon as we know more. For the latest updates on MMEG, sign up below!Disclosure: We have no position in MMEG and have not been compensated for this article.

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