Are you long on sure things or more the type who likes to jump in when a sure thing is really a sure thing? Confused? So were we after watching how the penny stock of Viggle Inc. (VGGL) reacted after the Company reported explosive results for their Q3 last month. Whatever the case may be that is keeping investors at bay from going on Robert F.X. Sillerman’s VGGL stock, there are only two thing which could really happen from here on out: it goes up because it’s uplisting or it goes up because it’s being acquired by a media giant. Seriously, who can shy away from a 510% increase in quarterly sales?
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VGGL Stock Quote
Market Cap: 59.23M
Monday Close: 0.65 ▲ +0.045 (+7.44%)
Volume: 2,100
Avg. Volume: 8,910
Authorized: 300,000,000
Issued and Outstanding: 91,124,452
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Many already know of both Sillerman and VGGL. Sillerman, the founder of SFX Entertainment and co-creator of American Idol is a media mogul who can be thrown into the same sentence as Rupert Murdoch which is why when his newest venture reverse merged into the shell corp of Gateway Industries nearly 2 years ago, some early investors made a quick fortune: over 11,000%.
The new venture, Viggle, has a very simple business model which is working to a “T”: make watching TV more rewarding. The Company simply provides an interactive platform to create more engagement with TV content and more targeted advertising through a loyalty program that rewards Viggle users for watching television.
One month ago, Viggle reported their Q3 earnings and VGGL stock didn’t even trade 30,000 shares in the wake of it. Sales came in at $3.395 million versus $0.556 million for the same period in 2012; the period when Viggle launched its application (January 25, 2012). In what is considered to be the slowest quarter traditionally in the industry for TV and brand advertising, Viggle’s revenue only dropped by 12% compared to Q2, 2013 when revenues were $3.875 million.
Hello McFly! Do you not see what is happening here with Viggle?
Yesterday, Viggle announced that they reached 3 million registered users as well as a new milestone whereby Vigglers checked into TV shows more than 250 million times. Just last month alone, Viggle reported adding more than 400,000 new registered users for the month of May alone.
What we think is scaring away the average Joe from longing VGGL is the fact that with $9.322 million in sale for the 9 month ended March 31, 2013, selling and general administrative expenses were $81.027 million. That would scare the pants off of anyone with half a brain or access to a calculator, but let’s look at that from a different point of view:
Sillerman is no dummy and his SFX Entertainment, previous track record in the media industry can prove that. The huge take on G&A only helps to avoid income taxes if a proposed sale of the Company were to go through or when revenues are too damn big to hold back anymore. Seriously, how long do you think Google, Apple or Clear Channel can continue to sit back and watch how, as of March 31, 2013, Vigglers checked-in to 195,215,435 TV programs and spent an average of 72 minutes of active time within the Viggle app per session allowing them to redeem a total of 1,619,811 rewards.
Better yet, according to the most recent Q filing: As of May 15, 2013, approximately 68,010,154 shares of our common stock, not including warrants, options or rights to acquire common stock, are owned by Sillerman Investment Co., LLC and current affiliates and insiders representing control of approximately 75% of the total voting power, with Sillerman, together with Robert F.X. Sillerman personally, directly or indirectly beneficially owning more than a majority of the outstanding shares of common stock.
Viggle is Sillerman’s 9th publicly traded Company. Sillerman has been the reason behind some of the largest transactions in the history of live entertainment and radio.
Translation: Getting in bed with a proven millionaire, once listed on the Forbes 400 list, can help you in many ways, even if there is no paparazzi around to snap a picture of you.
About VGGL Stock
Viggle, Inc., formerly known as Gateway Industries, Inc., provides a platform for investments in media and entertainment, with a particular emphasis on digital and mobile technology.
Click here to view the SEC filings for VGGL.
Click here to view the website for Viggle.
Last 5 Trading Sessions:
| Date | Last | Change | % Change | Volume |
| 06/17/13 | 0.6500 | +0.0450 | +7.44% | 2,100 |
| 06/13/13 | 0.6050 | -0.1250 | -17.12% | 3,400 |
| 06/11/13 | 0.7300 | +0.0800 | +12.31% | 6,300 |
| 06/10/13 | 0.6500 | -0.0300 | -4.41% | 800 |
| 06/07/13 | 0.6800 | +0.1300 | +23.64% | 1,100 |
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Bottom Line:
VGGL is trading right around its 50-day moving average and right around the same level it traded after the Q3 earnings were released. Long and strong is really the only way to approach adding VGGL to your list of penny stocks that will fund your retirement since, either way you slice the cake, either Viggle gets acquired/sold or it just makes too much damn money to keep from trading at under $1.
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