New Offerings Are Game-Changers |
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In September, we introduced a very cool company in the email marketing space called WrapMail, Inc. (OTCPK –WRAP). WRAP has executed a flurry of tremendous initiatives in recent weeks which could really drive revenue this year. The stock has traded well and looks primed to move much higher. Check it out below!
COMPANY OVERVIEW Founded in Florida in 2005, WRAPmail combines its proprietary technology with custom marketing content and provides a next generation marketing e-mail platform for organizations and individuals. The Company provides a "rich" e-mail letterhead solution to organizations and individuals allowing e-mail correspondence to be written on letterhead as opposed to a blank sheet of paper, which is today’s current practice. The Company refers to a "rich" e-mail message as one that includes one or more of the following: graphics, pictures, text, audio, video, animation and links. WRAPmail has developed a platform of rich e-mail software features based on industry standards packaged as an integrated, turnkey server-centric product that resides in the cloud. WRAPmail’s focus is the one-on-one email although email-campaigns may also be accommodated. The genesis behind the innovative WRAPmail platform is to leverage the ubiquitous yet untapped power of a user’s current email and the insatiable desire for traffic to one’s corporate and/or social network site. If used properly, emails, which are sent daily on a person-to-person basis, or to a very small group, can become complete and/or complementary marketing tools that promote, brand, sell and cross-sell products and services, and drive traffic to the designated website. Thus, WRAPmail offers the most cost-effective marketing solution on the market by simply turning every regular one-on-one email into a marketing tool. THE LATEST WRAPmail has announced a slew of new offerings over the past few weeks that leverage some of the Internet’s largest one-to-one communication players and platforms that should serve as a major driver of new users and revenue this year. Email Letterheads for Facebook WRAP recently released a new solution that enables users to create a free WRAP (email stationery) with their Facebook account. After sign-up, WRAPmail's software automatically this a WRAP from the user’s Facebook profile featuring their image, name and other information pulled from Facebook using their API. The WRAP is created in seconds and then sent to the user with instructions on how to start using WRAPmail. Now, Facebook’s one billion+ users have the ability to automatically create interactive email stationery/letterhead that they then can use with all their regular emails. The Company will soon release an automated feature where these email letterheads (WRAPS) will automatically update themselves as users update their Facebook profile with new images and/or information.
Image I. Sample Facebook WRAP (Source: WRAPmail, Inc.)
Email Letterheads for LinkedIn WRAP recently released a new solution that enables users to create a free WRAP (email stationery) with their LinkedIn account. After sign-up, WRAPmail's software automatically this a WRAP from the user’s LinkedIn profile featuring their image, name and other information pulled from LinkedIn using their API. The WRAP is created in seconds and then sent to the user with instructions on how to start using WRAPmail. As with the Facebook tool, LinkedIn’s 200 million members can create WRAPS by using one of the Company’s toolbars available for Google Chrome, Firefox, Apple Safari and Internet Explorer for Gmail, Yahoo, AOL, GoDaddy and Microsoft Hotmail/Live/Outlook/365.
Image II. Sample LinkedIn WRAP (Source: WRAPmail, Inc.)
New Affinity Solution WRAPmail recently completed the development of an exciting affinity solution for new and existing WRAP users. Fans of sports teams and celebrities and artists can purchase a licensed WRAP (interactive email template) to use with their regular emails to show their affinity to their team or favorite celebrities or artists. WRAPmail already has an agreement with a European soccer team that will be the first to offer its affinity solution to its fans. Management expects to execute agreements with some of the most popular sports teams and celebrities as part of this effort. These WRAPS will feature the team and/or favorite players, the celebrity and also ticket sales and merchandise sales, effectively turning fans into marketers. The WRAPS will also be able to be customized by the user with their own image, text and link, contingent upon the approval of the sports team or celebrity. TURNING WRAPS INTO DOLLARS The primary WRAPmail revenue model is based upon Advertising Revenue through its Ad Network where users can advertise in other user's emails (predominantly in the free user's emails.) The size of WRAPmail’s addressable market is enormous. The Radicati Group estimates that by 2013 there will be nearly 1.9 billion email users sending over 500 billion emails---per day. With hundreds of billions of email messages estimated to be sent daily by the end of 2013, if the Company were to only capture 0.05% of all emails in which a revenue share opportunity was generated though a click-through, the Company could generate tens of millions in revenue, with high operating profitability. The importance of the new offerings takes the model to another level. The Numbers: WRAPmail charges advertisers a minimum of $0.005 per impression and $0.25 per click. There are a minimum of 7 ads in each email sent from free users so when we have successfully signed on advertisers each email generates a minimum of 3.5 cents revenue for WRAPmail. For example:
In our view, achieving the 1 million user level is very achievable via Facebook and LinkedIn alone, as it represents just less than 1% of the combined 1.2 billion members of the 2 companies. Having compatibility with GoDaddy could be a wild card for the Company as GoDaddy’s 10.7 million customers have over 54 million domains under management. The affinity solution, while out of the box, may emerge as the biggest driver as new agreements are executed in the near term. Fans (which is short for fanatic) of sports teams and celebrities tend to purchase anything and everything that promotes their team or favorite stars as well as promoting upcoming paid events. WRAPmail will sell these WRAPS for say $10-20 per wrap and will share in the revenue generated from its sale and the sale of other products with the team or celebrity/artist. Not only could this product generate significant potential revenue for both parties but also be able to drive new revenue for the teams and celebrities. Thus, every email sent by a user will help promote anything sold by the team or celebrity with potentially millions of emails sent daily by fans. The reach is huge as many celebrities have tens of millions of Facebook fans alone. As a result, even if the adoption rate is 1%, that could generate millions of impressions daily leading to substantial product sales potential. CONCLUSION We continue to believe that WRAPmail’s unique and innovative email branding platform could represent the next phase of broad-based website and organizational branding and marketing. Moreover, as the Company gains critical mass, it is likely that the service is used as an “always-on” marketing tool in conjunction with regular and mass marketing campaigns. With hundreds of billions of email messages estimated to be sent daily by the end of 2013, if the Company were to only capture 0.05% of all emails in which a revenue share opportunity was generated though a click-through, the Company could generate tens of millions in revenue, with high operating profitability. As WRAP gains critical mass of users and revenue through its new initiatives, it could be considered as an M&A candidate by external email client providers, or other players in the email marketing arena. Thus, our price target of $0.60 reflects the future value of WRAP’s revenue and users. We rate the low-float (46M shares) WRAP Speculative Buy. Recent Trading History For WRAP (Source: Stockta.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 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 FINRA, 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 |
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