Wall Street isn’t trying to hide the best investments from you. The traders in lower Manhattan are often unaware of these under-the-radar plays. To find them, they’d have to leave their cushy offices and do some legwork.
Which brings us to a new company that you will certainly be hearing about months from now: GoverMedia Plus Canada Corp. You won’t hear about this private firm on CNBC, but it’s tapped into powerful technology trends. And it’s about to go public.
GoverMedia Plus Canada, through its wholly-owned subsidiary, GoverMedia Russia, operates as an online platform for third parties in Canada.
The company has developed over the past three years a state-of-the-art Internet platform offering e-commerce, crowdfunding, social media, initial coin offerings (ICOs), and corporate auctions. Think of it as the “Alibaba of Digital Assets.” The platform can perform transactions in all currencies and cryptos.
The company has plans to launch an initial public offering (IPO), expected for early to mid-February. Mackie Research is leading the IPO. The IPO will offer up to 6 million shares at $0.50 CAD on a CSE IPO. Securities can only be offered by prospectus. The IPO could represent an opportunity for investors to tap “disruption,” at a value.
One of the surest ways to make money is to find an entrepreneurial company with disruptive technology — and invest on the ground floor.
Many of the best-performing investments are those in companies riding a gigantic wave of change. Facebook (NASDAQ: FB), Apple (NASDAQ: AAPL), and Alphabet’s (NASDAQ: GOOGL) Google are all examples of the success to be had when a company finds itself in the center of seismic shifts in consumer behavior.
GoverMedia Plus Canada is on the precipice of such geometric growth. Consider the following statistics:
- E-commerce spending is expected to reach $3.5 trillion dollars over the next five years, more than double the level in 2017.
- By 2020, mobile transactions will account for $1.57 trillion of those dollars, almost half of e-commerce purchases and triple the current level.
- Digital advertising will grow 55% in the next four years to almost $90 billion dollars. Ads delivered to mobile devices will explode 220% and makeup almost three-quarters of that spending.
GoverMedia’s back-end infrastructure is developed. The platform is fully functional. Initial development began in 2014 when a team of talented software developers got to work on ways to integrate emerging technologies within a unique platform.
The company’s strategic objective is to penetrate the Internet market in Russian speaking regions. Developed regions in the West, such as North America and Europe, approach saturation levels. But Russia and its diaspora are vast and underserved. They present huge room for growth.
When it comes to growth potential, it’s axiomatic that small outgrows big.
Today, though, we’re in a rare — probably unprecedented — moment in which larger will grow faster than smaller. Larger, here, refers to the developing world, which collectively now represents a bigger chunk of the global economy than developed economies when measured in constant currencies. Yet despite its bigger size, the developing world, which is made up of a lot of distinct fast-growing economies, will continue to outpace the developed world for a considerable time to come.
The implications for investors are profound. First, it augurs a strong outlook for global growth because of the outsized impact of fast-growing developing economies. And second, it means that for the biggest gains, look to companies and stocks tied to those same economies.
The economic backdrop in Russia is positive. Russia is the world’s largest producer of hydrocarbons, and it holds some 17% of the world’s natural gas reserves. It also has 35% of the world’s reserves of nickel, used mainly in the production of stainless steel, and is one of the two major producers of the critical metal palladium. The ongoing surge in commodity prices has brought a windfall to an economy already booming.
President Vladimir Putin is all but assured of reelection as president in the election that’s scheduled for March. Putin’s number one policy goal is a doubling of Russia’s gross domestic product. This is achievable but will require the kind of all-out growth seen in East Asian countries in the 1980s and 1990s. To emulate those countries, Russia needs to increase its investment rate. Consequently, new tech firms in Russia face a hospitable environment.
The challenge for investors is how best to tap the momentum in countries such as Russia. It’s hard to invest directly in developing financial markets, which are mostly small and lacking in liquidity. GoverMedia’s foothold in Russia, combined with its headquarters in Canada, gets around this dilemma.
The company’s next strategic step is to expand worldwide and become an Internet company with dominant roles in social media and e-commerce. Let’s break down the platform’s capabilities:
- The e-commerce platform will allow all users to purchase and sell any product and service. Users will be able to access a wide network of service providers. Products and services will be offered by businesses as well as individuals. Transactions will be processed directly on the platform. All retail Internet services will be centralized in one single platform, all accessible via one account.
- Corporate users will be able to subscribe to the platform’s features. They’ll get access to the large retail user base, social media, crowdfunding, and the messenger and corporate database.
- Under Russian regulation, all bankrupt companies or assets in liquidation must be offered through an auction. Typically, most of these auctions occur under government auspices. GoverMedia is forging a relationship with the Russian Federation to offer most of these assets throughout its online auctions platform. If approved, this could be a huge growth driver.
- GoverMedia’s platform will provide all retail users the ability to create their own social and professional profile. These profiles would represent a hybrid of the features currently available on Facebook-like and Microsoft’s (NASDAQ: MSFT) LinkedIn. These profiles will have robust capabilities. Users will be able to interact with each other, post content, provide professional information, and access different multimedia content, to name just a few possibilities.
- Digital advertising throughout the platform will be the main focus. GoverMedia will offer its corporate clients the possibility to directly market and advertise to its retail user base. This base will be a captive audience.
- The platform will feature a proprietary messaging service called MFLY+ Messenger. Via MFLY+ Messenger, users will be able to interact on B2B and B2C levels. Cybersecurity will be paramount. All communication will be encrypted end-to-end. Another feature will be the ability to sign legal documents with digital signatures, all in accordance with Russian law. The MFLY+ Messenger is approved and available in the Apple App Store and Google Android Store.
Mobility is Key
Mobility is baked into the GoverMedia platform. It’s a crucial asset.
Consumers are now spending almost three hours per day on their mobile phones compared with less than half an hour a few years ago. A simple glance around the local Starbucks (NASDAQ: SBUX) tells us this three-hour estimate is way too low. Our mobile phones are the lifeblood of information and our connection to the world.
With so much of consumers’ attention glued to these little screens, advertisers are realizing they must find a way to target consumers on their mobile devices.
According to a recent report from Cisco (NASDAQ: CSCO), mobile devices (smartphones, tablets, smartwatches, etc.) make up one big factor driving bandwidth demand. By 2018 the number of devices connected to the Internet will be nearly twice as high as there are people on Earth.
Mobile apps are primed for continued strong growth in the year ahead. That’s because mobile is now the leading digital platform for media and communications. Smartphone penetration in the U.S. has reached 80%, while nearly 90% of all Millennials have their smartphones with them at all times.
Mobile apps these days are not limited just to the consumer segment. Many new business-focused apps work in conjunction with enterprise software, with a focus on customer relationship management, enterprise resource planning, and content management. GoverMedia’s mobile app embraces these trends.
The public offering market has picked up lately, which presents opportunities. But also risks. IPO activity in 2016 was slow; it accelerated in 2017 and the momentum continues in 2018. Many IPOs have been dubious, at best. That’s a sign of a market top.
There’s still big money to be made in IPOs, but you must know where to look. GoverMedia Plus Canada has an intriguing story to tell; its technology is in the “sweet spot” of several converging trends. But the IPO market is littered with the bleached bones of promising tech IPOs that went belly-up because of poor management. A key strength to look for in a company about to go public is the quality of its top executives.
GoverMedia offers more than technological expertise. Its management boasts blue-chip credentials. Before making an investment, multi-billionaire Warren Buffett first gauges the experience and prudence of the company’s corporate leadership. With GoverMedia Plus Canada, he’d probably like what he sees.
CEO and Director Roland J. Bopp has broad senior global corporate and operating experience in major telecom, software and technology organizations. He previously served as chairman, president and CEO of Deutsche Telecom Americas, New York, subsidiary of Germany-based Deutsche Telekom (OTC: DTEGY), Europe’s largest telecommunications company. Bopp was responsible for all of Deutsche Telekom activities in North and South America.
Founder and Director Leonid Afanasyev has two decades of experience in the financial sector. He also has launched and built several successful start-up companies.
Afanasyev is the founder and director of Crown Capital Group SA, a Swiss-based asset management company that was established in 2007. Crown Capital Group SA specializes in private equity, long-term portfolio strategies, short-term equities, and futures trading.
Director David Lane has over 25 years’ experience as a start-up specialist. He also has a proven track record in raising capital. Lane has served in senior management across many industries, including energy, financial services, health services, and professional sports.
This trio of entrepreneurs understands the importance of strategic direction and momentum.
Business momentum tends to be especially valuable in the technology sphere. Here, the velocity of growth translates into economies of scale and, more importantly, into a network effect: the growing adoption of a technology, service or standard increases its attraction and value.
Momentum has certainly been working this year for the FAANG quintet of tech heavyweights: Facebook, Apple, Amazon (NASDAQ: AMZN), Netflix (NASDAQ: NFLX) and Alphabet’s Google. We can argue about whether the N should really be chipmaker NVIDIA (NASDAQ: NVDA), but their momentum has been a thing of beauty.
However, big winners though they have been, the FAANG crew isn’t even the one with the most momentum in business or the capital markets. That distinction belongs to Internet stocks such as Alibaba (NYSE: BABA). GoverMedia Plus could become the next momentum stock to take on Alibaba.
Questions have emerged about how extensive the market is for the FAANG stocks. There is little doubt that in the U.S. and most of the West these companies reign supreme, at least for now. But what is also clear is that their presence is considerably more limited in Russia. GoverMedia has the edge in penetrating this potential gold mine.
By integrating the leading trends in technology, GoverMedia already is proving itself adept at “innogration.” That’s the term used to describe the magic that happens when a company combines “innovation” and “integration.”
Innogration is a concept that every investor needs to grasp because, in today’s world, only companies that both innovate and integrate other companies’ breakthroughs into their own products are succeeding.
If you’re looking for which tech companies will be the likely long-term winners over the next 20 years, knowing which companies are already innovating is the best way to identify them.
Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.