Opinions
Bruce Campbell (2)
Breaking Data Corp
BKD-X
WATCH
Oct 12, 2017
Stock price when the opinion was issued
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He has talked about it in the past and still owns a small piece. It is an interesting time for them. They did a couple of deals in the last year. They took a lot longer than they expected. They are integrated now and should see some cash flow. Another acquisition is now starting to generate cash flow also. Their burn rate is quite low. It looks like it could break out here.
In the last few days this has had some interesting news releases. Announced that everything was up and live with TabCorp, the online gaming in Australia, which is fairly significant for the company as it is another revenue-generating opportunity. Also, recently announced a couple of new people to the company, one of them holding the title of Chief Revenue Officer. Being a Revenue Officer and not the Financial Officer indicates that revenue is probably going to ramp up.
Continues to sign deals. What we need to see for the stock to break out is some profitability and cash flow. Currently they have started to add some of those. They added TabCorp out of Australia. We should also see the Pacific Disaster Centres generate some income. They have a messaging Bot, BreakingSports, something new on Facebook (FB-Q). You need to watch that they get to the point where they see some sort of cash flow growth. At that time, the stock should be recognized for what it is. Outstanding technology.
He is quite excited about this. In a super hot area right now. Everyone is sort of clambering over artificial intelligence and machine learning, and this is what this company does. They’ve signed a number of different deals over the last year or so, which he thinks is getting them closer to the point where they will be cash flow positive. Signed deals with TabCorp out of Australia and Pacific Disaster Centres, as well as their own Breaking Sports app. The combination of those 3 are getting them pretty close to being cash flow positive.
He doesn’t have much data on when they are going to come out. They have to continue to work through all the regulatory filings on the acquisition they are supposed to be making. It is fairly large and will really change the size of the company. Any time this happens, regulators like to go through it with a fine-tooth comb. It usually takes a couple of months.
Artificial intelligence machine learning is such a huge thing these days. This company had the technology and a fairly interesting machine learning and AI background for a number of years. They recently did a merger where they acquired a significantly bigger company in Europe, and it has taken a little while for the stock to digest what has happened. Now it looks like there is some traction in the stock price. The company continues to add new users to their platform. Once they are able to turn on the monetization of all those users, there should start to be some revenue and cash flow.
The base business was AI and machine learning. They had a couple of different apps in that area. Another app was Breaking Data, which was sports results faster than on TV because of the time delay with TV. Now they have ‘Give Me Sport’. It is surprising the stock has not gained more traction. The problem may be that with stocks the company can execute but if the capital structure is flawed in any way it can cause problems. They did a couple of deals before they signed the most recent deal. Once the deal closed, warrants were ‘in the money’. It has continued to drift. They are in a great area but the stock has to clean itself up. It may go lower before going up.