Social Reality Inc (NASDAQ:SRAX) is a small cap stock that has been rocketing up the charts in recent weeks.
On September 20 2017, the stock was trading at $1.2 and barely a month later, it was worth $4.9 with investors walking away with very huge returns.
Today, we will show you the company’s strategy for growth, recent developments and what you can expect from Social Reality in the future. First, take a look at the price action:
Social Reality Inc after trading within a range of $1-$2 per share for over a year, spiked more than 70 percent on October 17 2017, after the announcement of its own Initial Coin Offering, “BIGtoken”.
The idea behind BIGtoken is to reward users who share certain information that’s valuable to marketers by giving those tokens. In turn, this information can be sold, with users receiving extra tokens each time their information is purchased. What’s particularly interesting about this project is that, for the first time in years, consumers will decide which data is collected, shared and sold.
Next steps toward BIGtoken’s ICO include hiring a product team and establishing token sale commitments before the end of this year. The pre-sale and sale of tokens is planned for January 2018, after a product alpha test June 2017, and a beta test in September 2017.
Social Reality, Inc. was established in 2009 and is headquartered in Los Angeles, California. The company engages in Internet advertising and platform technology, it provides tools to automate the digital advertising market in the United States. Its technology tools enable publishers and advertisers to maximize their digital advertising initiatives.
The company offers Social Reality Ad Exchange (SRAX), a real time bidding (RTB) sell side and buy side representation technology, which assists publishers in delivering their media inventory to the RTB exchanges; and SRAX MD, an ad targeting and data platform for healthcare brands, agencies, and medical content publishers. It also provides SRAX Social, a social media and loyalty platform that allow brands to launch and manage their social media initiatives; and SRAX APP, a platform, which allows publishers and content owners to launch native mobile applications through its SRAX platform.
The company sells targeted and measurable online advertising campaigns and programs to brand advertisers and advertising agencies across Facebook apps and Websites, as well as offers its services through in house sales team. It offers tools for brands in the healthcare, CPG, automotive, wellness, and lifestyle verticals.
These tools by SRAX amplify performance and maximize profits for brands in the healthcare, CPG, automotive, wellness and lifestyle verticals through an omni-channel approach that integrates all aspects of the marketing experience into one platform. The company’s machine-learning technology identifies brands’ core consumers and their characteristics discovering new and measurable opportunities to target, reach and monetize audiences, propelling online and offline sales.
On October 2, 2017, Social Reality Inc. announced the acquisition of Demand Side Platform (DSP) technology from OpenDSP, a privately-held company. DSP’s technology focuses on marketing experimentation, intelligence and optimization for brands and agencies. Christopher Miglino, CEO and chairman of SRAX was quoted saying:
“OpenDSP has developed a unique DSP with exciting Real-Time Bidding (RTB) and targeting capabilities that will fit perfectly into the SRAX Platform. Not only does the technology acquired complement our DSP, but it will also be powerful and valuable to the buy-side of our business serving brands and agencies.”
Earlier in the year, the company held an Investor – Analyst Day at its facility in Mexicali, Mexico on October 17, 2017. Co-founders Christopher Miglino and Erin DeRuggiero along with senior management hosted the event, during which product presentations and demonstrations were held along with discussions on the market’s opinion on big data and cryptocurrency and the company’s corporate strategy, including its vision, technology, sales, marketing and financial performance.
Financial Results Show Improved Efficiency
During the second quarter of 2017 and for the six months then ended gross margins increased to 55.8% and 47.6%, respectively, of revenue as compared to 32.3% and 35.8%, respectively during the comparable periods in 2016. The results backed the company’s declaration of its intention to focus on the reduction of its operating expenses so as to streamline the business for the future and provide liquidity.
In April 2017 SRAX raised an additional $5.0 million through the sale of convertible debentures. The funds were used to satisfy the put obligation of $2.5 million under the Series B warrants issued in an offering done in January 2017. However, the terms of those debentures will make it more difficult for the firm to raise capital in future periods while the debt remains outstanding. It is expected however, that the reduction in operating expenses coupled with a focus to improve the technology tools offered will enable users to maximize their digital advertising initiatives and keep demand high enough to reduce in the need for outside capital during the rest of 2017.
As at June, 2017, the company had $396,560 in cash and cash equivalents and a deficit in working capital of $7.16 million as compared to $1.05 million in cash and cash equivalents and a deficit in working capital of $8.28 million at December, 2016. The limited liquidity was as a result from the complete repayment of notes associated with a financing agreement previously held by Victory Park Management, LLC and the repurchase of the Series B Warrants in April 2017.
Like most small caps, Social Reality Inc has some measure of risk attached investing in its stock. However, the success of its ICO and the ability of management to control costs while increasing revenues has raised investor confidence. Our readers can only expect the interest to grow as the market gains more awareness of its potential.
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Image courtesy of Coin Staker via Flickr
Disclosure: We have no position in SRAX and have not been compensated for this article.