The Next Takeover

Now that Apple (NASDAQ – AAPL) announced last week it bought Chomp for a reported $50M, there is only one publicly-traded stock that you can play as the next takeover target in this fast-growing industry.

icon Download This Report in PDF


MIMVI, INC.
Mimvi Emerges As Next Takeover Target

 

Rob Goldman                                                                                                                        February 27, 2011

rob@goldmanresearch.com

 

MIMVI, INC. (OTC:QB – MIMV - $0.12)

Price Target: $1.50

Rating: Speculative Buy

 

COMPANY SNAPSHOT

INVESTMENT HIGHLIGHTS

 

 

Headquartered in Sunnyvale, California, Mimvi, Inc. is a pure-play Mobile Apps and Mobile Content search and recommendation technology company. Using its proprietary search and intelligent recommendation algorithms, Mimvi‘s powerful search engine provides an industry-leading 6 million searchable results for Mobile Apps and Web Apps and has indexed more than 1.2 million Mobile Apps.  Mimvi’s search engine is used across multiple mobile devices and platforms, including: Apple's iPhone, RIM’s BlackBerry, Google’s Android, and Web Apps. Services for iPad, Windows Mobile platform and Samsung are in the Company’s pipeline.

The News:
Late last week Apple (NASDAQ – AAPL) announced that it has acquired Chomp, Inc., Mimvi’s primary competitor in the mobile app search engine arena. The reported price is around $50M. Apple will primarily utilize Chomp’s mobile app search technology to enable users to more easily navigate the Apple app Store.

Our Take:
This is a landmark catalyst for the mobile app search space and should be the trigger that drives MIMV toward the $1.00 mark, as Mimvi has now emerged as the next takeover candidate in mobile app search. At current prices, buying MIMV’s stock may be the biggest lay-up of the year.

Let’s put this in perspective. Chomp, founded two years ago, had a grand total of $2.5M invested in the company, giving the funders a return of 20x their investment. We believe Chomp is inferior to Mimvi in terms of the number of searchable results and the sheer number of indexed Mobile Apps. But, Chomp, by virtue of a relationship with Verizon Wireless, has a leg up on distribution and perhaps brand.

Make no mistake---Apple has fired the first salvo in this space and we expect that, as is typically the case, other major players such as Microsoft (NASDAQ – MSFT), Google, (NASDAQ - GOOG) and eBay (NASDAQ – EBAY) will circle the wagons around Mimvi in order to deter Apple from gaining any advantage in the mobile app arena.  

If we were to apply the same $50M valuation to Mimvi as Apple used for Chomp, Mimvi would be assessed a valuation of $1.20 per share. Even if Chomp is viewed as a premium property due to the Verizon Wireless relationship, we believe the low end value for Mimvi would be $40M, or $0.95 per share, which is a huge premium to the current share price.

Speculative Buy-rated MIMV, the only publicly-traded pure play Mobile App search firm, is primed to be acquired in the next 3-6 months for $0.95 per share and for as much as $1.50 later in the year as it executes its business model and valuations increase.

 

KEY STATISTICS

Price as of 1/5/12

$0.12

 

52 Wk High – Low

$1.00 – 0.04

 

Est. FD Shares Out.

41.6M

 

Market Capitalization

$5.0M

 

3 Mo Avg Vol

9,000

 

Exchange

OTC:QB

 

 

COMPANY INFORMATION

Mimvi, Inc.
440 N. Wolfe Street
Sunnyvale CA 94085
www.mimvi.com
contact@mimvi.com

Investor Relations:
Wall Street Resources
Sean Marconi
772.219.7525
ir@thewsrgroup.com

Analyst: Robert Goldman

Rob Goldman has over 20 years of investment and company research experience as a senior research analyst and as a portfolio and mutual fund manager. During his tenure as a sell-side analyst, Rob was a senior member of Piper Jaffray's Technology and Communications teams. Prior to joining Piper, Rob led Josephthal & Co.'s Washington-based Emerging Growth Research Group. In addition to his sell-side experience Rob served as Chief Investment Officer of a boutique investment management firm and Blue and White Investment Management, where he managed Small Cap Growth portfolios and The Blue and White Fund.

Analyst Certification

I, Robert Goldman, hereby certify that the view expressed in this research report accurately reflect my personal views about the subject securities and issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the recommendations or views expressed in this research report.

Disclaimer

This Opportunity Research report was prepared for informational purposes only. Goldman Small Cap Research, (a division of Two Triangle Consulting Group, LLC) produces research via two formats: Goldman Select Research and Goldman Opportunity Research. The Select product reflects the Firm’s internally generated stock ideas while the Opportunity product reflects sponsored research reports. It is important to note that while we may track performance separately, we utilize the same coverage criteria in determining coverage of all stocks in both research formats. While stocks in the Opportunity format may have a higher risk profile, they typically offer greater upside as well. Goldman Small Cap Research has been compensated by a third party in the amount of $8,000 for a three-month research subscription service. The Firm does not accept any equity compensation. All information contained in this report was provided by the Company. Our analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests, retain editorial control, and ensure independence. Analysts are compensated on a per report basis and not on the basis of his/her recommendations.

The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Goldman Small Cap Research did not make an independent investigation or inquiry as to the accuracy of any information provided by the Company, or other firms. Goldman Small Cap Research relied solely upon information provided by the Company through its filings, press releases, presentations, and through its own internal due diligence for accuracy and completeness. Such information and the opinions expressed are subject to change without notice. A Goldman Small Cap Research report or note is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed.

This report does not take into account the investment objectives, financial situation, or particular needs of any particular person. This report does not provide all information material to an investor’s decision about whether or not to make any investment. Any discussion of risks in this presentation is not a disclosure of all risks or a complete discussion of the risks mentioned. Neither Goldman Small Cap Research, nor its parent, is registered as a securities broker-dealer or an investment adviser with the U.S. Securities and Exchange Commission or with any state securities regulatory authority.

ALL INFORMATION IN THIS REPORT IS PROVIDED “AS IS” WITHOUT WARRANTIES, EXPRESSED OR IMPLIED, OR REPRESENTATIONS OF ANY KIND. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE FOR THE QUALITY, ACCURACY, COMPLETENESS, RELIABILITY OR TIMELINESS OF THIS INFORMATION, OR FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT MAY ARISE OUT OF THE USE OF THIS INFORMATION BY YOU OR ANYONE ELSE (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF OPPORTUNITIES, TRADING LOSSES, AND DAMAGES THAT MAY RESULT FROM ANY INACCURACY OR INCOMPLETENESS OF THIS INFORMATION). TO THE FULLEST EXTENT PERMITTED BY LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY, OR OTHER THEORY WITH RESPECT TO THIS PRESENTATION OF INFORMATION.

For more information, visit our Disclaimer: www.goldmanresearch.com.