The underperformance of Viva Entertainment Group Inc (OTCMKTS:OTTV) in 2017 and 2018 over the past one year is a point of concern. After following a long downward trend that commenced 8 months ago, the stock is trading at 52-weeks record low.While the recent developments should reinvigorate investors’ confidence, the share price seems completely disconnected from the current operations of the company. The management should have difficulties in explaining the horrible year 2017 to the shareholders, because, in our view, they have been doing what the market expected from the company. OTTV has signed a large number of content agreements and has already access to over 15,000 movies and live television streaming to offer on Viva Live TV.
The 1-year chart for OTTV
Trading volumes have recently started to pick up, which indicates that the market is taking note of the company’s long-term prospects. However, these volumes are much reduced as compared to 0.5 billion shares seen in July and August 2017. Even if the company keeps showing clear indications of growth in its press releases, many things, in our view, need to change in the stock chart to see a real stock rebound.As usual, this is a bad experience for those shareholders, who jumped into the stock in July and August, but it seems like a buy the dip opportunity for new entrants. For the second group of market participants, let us review the most recent developments and the background of OTTV.BusinessVIVA Entertainment Group, Inc., founded in 2009, is headquartered in Briarwood, New York. It is a global entertainment and technology company connecting content owners and video distributors to deliver premium contents on any smart device with a screen. Google Play - Viva Entertainment Group Inc OTCMKTS:OTTVViva is an OTT service provider, through which television services, instead of being delivered through traditional terrestrial, satellite signal and cable television formats, are delivered using the Internet protocol suite over a network such as the Internet.A picture is worth a thousand words, so have a look at the following video:[embed]https://www.youtube.com/watch?v=dp3SzHZz1Ww[/embed]Even if the stock has not delivered value to the shareholders, we still see a promising business model behind this ticker. Let's now turn the page to note the most recent developments that still sustain the bullish thesis on this name. For more past developments and more information about the fantastic growth of OTTV, please revise our previous articles on this name.Increasing Public AwarenessThe company keeps its expansion plans. In December 2017 and first two months of 2018, the market got to know many steps that confirm this fact. First of all, Supersonix Media was hired "in preparation for the market expansion of VivaLive TV." With the help of this new PR firm, a lot of new campaigns are expected in 2018, which will help position the company and shareholders very well in the public sector for years to come. Stay tuned, since many times such campaigns have a positive effect on the stock performance over the long term.In line with these promotional activities, in December 2017, the company also signed an endorsement agreement with Hollywood Award Winning Actor and Activist Luis Guzmán. For those who don't know, Mr. Guzmán has the expertise of 40 years in the movie and television industry. He is famous for his roles in Boogie Nights, Carlito's Way, Count of Monte Cristo, Magnolia, and Narcos. He is presently staring in the CBS medical drama, Code Black.
The actor will provide the following services to the company:
"Under the terms of the Agreement, Guzmán will endorse the VIVA brand and serve as a public face for the Company, engage in promotional activities, provide referrals to Company, participate with ongoing social media efforts, marketing activities and promotions with VivaLive TV, and participate in public speaking engagements, events, meetings, and media opportunities." Source
The market did not wait a lot to hear the first promotion between OTTV and the actor. On January 17, 2018, the actor released a 60-second Spanish-language radio commercial featuring Mr. Guzman, and Soleil J; a Latina recording artist. With this commercial, the company revealed that it is targeting the Hispanic audience and expects to add 200,000-250,000 new subscribers. Be sure to stay tuned, because if this ambitious target is achieved, the revenues will spike and we should see the stock price creeping up.There is more. The company also signed an agreement with Maffio (real name Carlos Ariel Peralta), a Dominican Republic-born multi-platinum record producer, recording artist, and the creator of the merengue electronico subgenre in Latin pop. He is known for having production credits with Olga Tañón, Elvis Crespo, Farruko, and Nicky Jam. Additionally, his numerous award nominations have led him to a Latin Grammy winner for his work with Fuego on "La Musica del Futuro."This announcement, like with the previous news, made the stock volume increase. In our view, market participants are recognizing this star and are aware of the potential positive effect on the stock price. In the following months, we will check if those buying the dip at these levels are correct.The streaming services and new additions to the Board of DirectorsThe company is not only working on promoting its services. OTTV is also enhancing the features given to subscribers. On December 21, 2017, OTTV completed the interface redesign as part of the revenue sharing and service agreement with FlixFling, LLC., which will allow subscribers to have access to the FlixFling catalog through the VIVA portal. As we noted in previous articles, OTTV signed a five-year agreement with FlixFling, which provides to OTTV 20% of sales of FlixFling subscriptions by OTTV and 30% from video-on-demand downloads sold through VIVA. The result of the work is very positive for the company. This is what we need to keep in mind:
"FlixFling's platform of movies-on-demand combined with music video channels makes VIVA one of the best OTT providers on the market. The redesigned app will allow customers to easily access both VIVA and FlixFling content without having to switch between apps. It is just one more way in which VIVA is setting itself apart from the rest of the OTT community." Johnny Falcones, Chief Executive Officer of VIVA, commented.
With the company working on its contents and signing agreements with other content distributors, 2018 seems like a very important year. Stay tuned to the company and follow the next quarterly revenues, since the hard work should pay off soon.A critical indication of the good operating performance of the company is that new experienced professionals want to work for the company. The last person added to OTTV was Michael Nagle, who brings 25 years of experience in media having worked for Columbia Records, The Box Music Network, Bloomberg LP, Playboy, FlixFling, and NatureVision TV. Be sure to read the following words from the new director. Despite the bad stock performance, the optimism and confidence are at its highest level:
"Viva's evolution was a great experience over the past year. It is a privilege for me to continue serving on the board, the OTT marketplace is evolving rapidly and Viva is poised to shake things up for our users and partners alike." Mr. Nagle added.
ConclusionCurrently trading with a market cap of $4.3 million, OTTV is an exciting story among small caps. With an asset/liability ratio under one, we believe that the market is expecting a recapitalization plan to help sustain future growth. In our view, it is the piece that is missing in the puzzle and OTTV needs to solve. It is the biggest concern of cold minded market participants who only care about financials. While, in our opinion, market participants only looking for growth are with the company, we will need the financiers too.To sum up, stay tuned to this ticker.Be sure to check out our coverage on OTTV!We will be updating our subscribers as soon as we know more. For the latest updates on OTTV, sign up below!Disclosure: We have no position in OTTV and have not been compensated for this article.Image courtesy of Rhys A. via Flickr
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