Starting off with a chart of this Company – Big Un (BIG), we can see that the stock went from a low of 9c to a whopping $3.91 high in just over a year. Congratulations to anyone that had the guts to pick it up at those prices and managed to hold it to today!! (might even give you a job)
In any case, we’ve wondered how the Company had such a move. Upon looking, we saw that they had this astounding run on the back of an incredible uplift and growth in revenues, almost too good to be true.
The business model seems simply enough. They own Big Review TV (website: https://www.bigreviewtv.com/), which attracts small businesses (or big) by offering a marketing service. Simple business model and we see merit in the idea (image below).
As a small business wanting to get their name to the market, a video not only better shows what the business is all about, but being on Big Review TV’s website and app allows a new community to discover them. With a growing trend of people moving to video, it’s quite a simple and sound business model.
However, the question now is whether the revenues can be justified. For FY17, the Company posted revenues of $13.97M and a net loss of -$4.24M (from FY16 $2.64M and -$7.80M respectively). The 1Q18 quarterly showed cash receipts of $15M (up 488% on pcp), no doubt extremely impressive considering members/subscribers have also increased to 128,700 members (up 544% from prior year), of which 4,900 are paying members (up 114%).
One issue we have with this Company is that we cannot reconcile the revenue numbers. The traffic details provided by BIG doesn’t seem to correspond to traffic numbers provided by services which track website traffic numbers. Having a look into the BIG website statistics, the video viewer numbers are low and we have sent questions regarding that to company and haven’t got any response so far.
Furthermore, we question whether BIG can really scale and expand the number of viewers (ie. people to use the website/app to discover companies). Essentially they are aiming to become the Youtube for Companies, and we wonder what kind of viewers would spend time on the website/app discovering companies.
We haven’t recommended to stock as such yet, but we’d love to be proved wrong. Spanning across Australia, New Zealand, the UK, U.S, Hong Kong, Singapore, and Canada, BIG definitely has caught many eyes in terms of the share price momentum. We’d love to see a sustained development in their business before making a final decision, but it’s quite the stellar price action on the ASX.