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Red Leopard Holdings and EVR Holdings – how to make money at different stages of the Akers investment lifecycle

By Cynical Bear | Thursday 16 March 2017


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.


Following my recommendation on Red Leopard earlier this month, I thought I’d follow up with a compare and contrast of Akers related stocks looking at the different phases of the investment lifecycle and how to make money at those different stages.

If one goes back to my original piece looking at ‘How to Make Money Out of A Chris Akers Stock’ I set out the five stages of the investment lifecycle. Red Leopard is very much at the first step, namely: “Find a business that is in a market that is indisputably large and/or potentially large and is fast growing.”

Hype and excitement can go a long way at this stage. This is almost pre-step one in fact as the investment hasn’t been made yet; however, to be fair to Chris, he has put £250,000 of his own money into this which carries a lot of weight.

As anticipated, the share price has steadily increased from 0.26p as I wrote previously to a current share price of 0.35, albeit with a chunky spread as it is still relatively illiquid. However, the fun part is still to come and that is the investment announcement itself. I am assuming that Chris has something up his sleeve and I have no doubt that, as with podcasting, e-sports and virtual reality, he will pick an industry that is, or could become, huge but is still some way off maturity so that one can big up the potential. Hard to guess obviously but looking at his Twitter feed, I wouldn’t be surprised to see something in the artificial intelligence space.

So even though the current market cap is looking a bit punchy at this level at over £3 million, I expect the news flow as and when it comes to give it another boost and will then reassess.

In contrast, EVR Holdings (EVRH) is very much at the latter end of Stage 2 (the “ramp the hell out of it” stage) and is currently trading at 11.25p giving it a fully diluted enterprise value of around £120 million.

I may be a Luddite but I just don’t get it and maybe I’m getting twitchy by the shenanigans at the “C” stock but there are a couple of things I can’t fathom.

First, why won’t it launch its virtual reality product? When it came to the market last May, it talked of needing to get to the market quickly as there would be a land grab which makes perfect sense; however, now Anthony Matchett talks of waiting “until the market is ready”. Ready for what? Just get the bloody thing out there.

Its competitors don’t seem to need to wait for the market to be ready. It is interesting to compare and contrast the home pages of NextVR, JauntVR and EVR Holdings’ business, MelodyVR. The latter merely saying that it’s “Coming Soon”. The results this week talked vaguely about a 2017 launch but that further refinements were being made to the app.

My second concern is its relative lack of funds. Its venture capital rivals have tens of millions of dollars to build a business and brand whereas EVR Holdings will have less than £3 million in the bank at the moment. Its results this week talked about global expansion which sounds great but that’s nowhere near enough cash for that together with the marketing that will be needed as and when they finally launch the app. Why isn’t it raising money while its market cap is so high to give itself a war chest to tackle the market properly?

It just gets my spidey senses tingling and, for me, this is now getting very close to short territory as a way of making money, if one can find some borrow.

It would be remiss of me not to touch on Concha (CHA) in this piece which appears to be at the end of the lifecycle following the recent disappointing news relating to its investment in Ve Interactive. Don’t think it’s possible to make money at this stage with this one unfortunately, I just hope that you got out near the top a year or so ago.

 


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