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VOLUME 07: ISSUE 19
The
Titan Train Just Keeps On Rolling
Hey
investors, do you like high potential trading ideas? We introduced
Titan Global Holdings (OTCBB:
TTGL) to you on January 13th, but if you wanted to mull it over for
a wile, we think today's news may proverbially clinch the deal for you.
Here's
the deal - Titan just acquired Ready Mobile, which is a regional Mobile
Virtual Network Operator (or MVNO). They're basically in the same business
as Titan Global's communication division already is, so the two outfits
should be able to integrate seamlessly and share a market footprint.
But
is this a big deal for Titan and its shareholders? Yes, we think it is.
Just for perspective, Ready Mobile generated $9 million in sales during
2006. Titan Global's communication division did $89.3 million in business
last year, doing essentially the same thing - selling prepaid minutes and
wireless services. So, assuming nothing changes in 2007, the combined units
are likely to do just a hair under $100 million this year...a 10% increase
in the top line. Not bad, but frankly, that's not the exciting part. I
think to really get pumped, you have go back yet another year.
While
Titan's communication arm did $89.3 million in 2006, in 2005, they only
posted $5.8 million in revenue. The difference? We have to attribute
practically all of the 1453% improvement to Titan's efforts, as they
bought the communications division (Oblio Telecom Inc.) right as their
fiscal 2005 turned into fiscal 2006. To me, it verifies Titan knows how
to market a telecom service.
Fast
forward to today. If the company can turn a $5.8 million business into
an $89.3 million enterprise in one year, what can they do with a $9 million
dollar business by the end of 2007? Based on history, we'd have to say
they can do a heck of a lot.
Overlap?
We Think Not.
Now,
if you're thinking Ready Mobile's growth potential is going to be limited
by overlap with current Titan offers, I don't think you're crazy - I wondered
the same thing. Yes, these two companies are pretty much in the same spot
- providing prepaid minutes, and prepaid wireless services. However, the
two companies aren't necessarily competing head-to-head in all ways, or
in all geographical markets. In our view, the two companies have more
to collectively gain by working together than by working individually;
both sides seem to be bringing something unique to the table. Two details
convinced me there would be little to no cannibalization.
First,
Ready Mobile appears to be very skilled at bringing on subscribers. Last
year was Ready Mobile's first year of being in business...a close parallel
to Oblio's 2005. During that first year though, 30,000 subscribers were
brought on board, and according to the press release, the number of
Titan's subscribers will double as part of the acquisition. Considering
that Ready Mobile is only doing a tenth of the business Titan is - but
has just as many subscribers - tells us Ready Mobile knows a thing or two
about generating steady subscriber revenue streams. That's good for Titan,
and its shareholders.
Second,
Titan's communication division, Oblio Telecom Inc., already has a massive
distribution network. Last year, 4000 retail outlets began carrying Ready
Mobile's prepaid cards and wireless products. In comparison, Titan's communication
division's (pre-acquisition) network is comprised of 60,000 distributors.
Right off the bat, Ready Mobile potentially has fifteen times its current
number of retail outlets.
While
there will always be some potential overlap, the odds mostly seem to favor
an either/or scenario. So, we're pretty confident any 'new' business will
indeed be new business, as each side of the table can help the other party.
Better
yet, while there may be very little overlap in terms of a customer base,
we
still expect to see a serious cost-savings from the reduction of any overlap
of corporate expenses. WE THINK THIS IS HUGE FOR SHAREHOLDERS. As you
may recall, Titan is getting closer and closer to profitability. A slightly
higher top line and a relatively improved bottom line brings them one step
closer to that end.
For
what it's worth, we think one of the best times to own a stock is when
the company finally turns the corner on bottom line earnings (the EBITDA
improvement has already blown our socks off). So, if you like to give yourself
at least a short at that kind of possibility, then you know what we think
you ought to do. And speaking of the stock....
He
Who Hesitates.....
Remember
in the January 23rd edition ('Playing Titan Global After The Volatility')
we talked about how TTGL was making a stair-step pattern to higher highs?
We just meant the stock has found its bullish groove by surging for 3 or
4 days, then moving sideways for a month or so. No complaints though -
it seems to work for TTGL, as the stock is up 88% over the last six months.
Well,
as we were looking at the recent chart, we noticed it's been right at a
month since our last surge....the one that took it from $1.00 to $1.35
in six trading days. The point we were making then - and the one we'll
repeat today - is how we feel you have to already be in a position when
the news hits, unless you're one of the folks who likes to chase stocks
after the fact (which we're not).
The
other thing we noticed....this stock responds well to good news.
It could go without saying we think investors will respond to today's good
news as well, though we don't necessarily think you've missed the boat
if you're not yet in.
As
for where we stand, we hope/think it's obvious - we think Titan Global
is just an enormous opportunity. The company has seriously ramped up
its publicity effort since July of last year, which is also when the stock
really started to move. Maybe it's a function of better PR, or maybe it's
a function of better news to work with (or both). We don't necessarily
care either way. We just see the stock is moving now, and the company is
delivering what they said they would.
As
you'll also read in the press release, Titan is looking to acquire more
MVNO enterprises in 2007. We think they will; we also think each acquisition
will be well received by investors, as it could put the company one
step closer to full profitability. Along the way, we suspect the market
will 'reward' shareholders with substantial appreciation. So, do you
want in now, or later? Our suggested target is still $3.00, 156% above
current trading levels.
Titan
Global Announces Agreement in Principle to Acquire Ready Mobile, a Regional
Sprint MVNO Targeting Nationwide Retailers
Titan MVNO
Acquisition Doubles Customer Base, Significantly Expands Sales Force, Operations
and Veteran Senior Wireless Management
RICHARDSON, Texas--(BUSINESS
WIRE)--Titan Global Holdings, Inc. (OTCBB:TTGL),
a high-growth diversified holding company, announced today that Titan Wireless,
a subsidiary of Titan Communications, consummated a letter of intent to
acquire certain assets of Ready Mobile, LLC, www.readymobile.com, a national
Sprint Mobile Virtual Network Operator ("MVNO").
This acquisition
is consistent with Titan's stated strategic plan to opportunistically acquire
and roll-up competitive MVNOs. Titan has and will target and pursue other
MVNO's throughout 2007 for similarly structured acquisitions.
Ready Mobile distributes
prepaid wireless communications solutions nationwide through a vast distribution
network that includes more than 4,000 retailer locations. Ready Mobile
generated over $9 million in revenue and accumulated over 30,000 subscribers
in its first year of operations in 2006.
"We are very excited
about our planned acquisition of Ready Mobile," said Kurt Jensen, President
and Chief Executive Officer of Titan's Communications Division. "Our existing
retail footprint will bolster Ready Mobile's retail sales channel and the
addition of Ready Mobile's wireless customers will double our active subscriber
base. Furthermore, we expect to achieve additional synergies and cost savings
by leveraging Ready Mobile's distribution strength and Titan's operating
capabilities."
Ready Mobile currently
operates under two brand-name products, Ready Mobile PCS and Mojo Mobile.
Additionally, Titan will retain Ready Mobile's proven leadership team comprised
of well-known industry veterans.
"The Ready Mobile
management team joins in my excitement to become part of Titan," said Dennis
Henderson, Chief Executive Officer of Ready Mobile. "We believe the combined
distribution channels and the synergies in operations give our new wireless
company the ability to help our distribution partners create maximum profits
in the fast-growing prepaid wireless market."
The acquisition
is subject to negotiation and execution of a definitive agreement, satisfaction
of certain conditions precedent, and other ordinary and customary closing
conditions for a transaction of this type. It is anticipated to close by
March 15, 2007.
"We are committed
to growing our subsidiaries through organic efforts and the efficient deployment
of capital to acquire assets that strengthen our market position," said
Bryan Chance, President and Chief Executive Officer of Titan Global Holdings.
"The planned acquisition of Ready Mobile will place our Titan Wireless
subsidiary in a market leadership position in the dynamic prepaid wireless
telecommunications market. Furthermore, we gain the tremendous leadership
and experience of Dennis Henderson and his management team. We look forward
to closing this transaction and creating tremendous shareholder value from
our Titan Wireless Subsidiary."
About Titan Global
Holdings
Titan Global Holdings,
Inc. ("Titan") (OTCBB:TTGL)
is a high-growth diversified holding company with a dynamic portfolio of
companies engaged in emerging telecommunications markets and advanced technologies.
In its last fiscal year Titan generated in excess of $109 million in revenues
on a consolidated basis.
Titan's Oblio
Telecom Inc. ("Oblio") telecommunications subsidiary, based in Richardson,
Texas, is a market leader in prepaid telecommunications products and the
second largest publicly-owned international telecommunications company
focused on the prepaid space. Oblio leverages strategic agreements with
Tier 1 telecommunications leaders Sprint and Level3 to supply its brand-name
prepaid calling cards. Annually Oblio sells an estimated 35 million of
its brand-name prepaid calling cards through its established distribution
channels estimated at more than 60,000 retail outlets.
Titan Wireless,
Inc. ("T Wireless") is Titan's wireless subsidiary and is a mobile virtual
network operator ("MVNO"). T Wireless sells its MVNO prepaid wireless products
and wireless services through Oblio's established distribution channels.
Titan's Electronics and Homeland Security division specializes in advanced
manufacturing processes to provide commercial production runs and quick-turn
delivery of printed circuit board prototypes for high-margin markets including
Homeland Security and high-tech clients.
For more information,
please visit: www.titanglobalholdings.com.
For investor-specific information and resources, visit http://www.trilogy-capital.com/tcp/titan/
or http://www.b2i.us/irpass.asp?BzID=1314&to=ea&s=0.
To view current stock quotes and news, visit http://www.trilogy-capital.com/tcp/titan/quote.html.
To view an investor fact sheet about the company, visit http://www.trilogy-capital.com/tcp/titan/factsheet.html.
Forward-Looking
Statements
Safe Harbor Statement
Under the Private Securities Litigation Act of 1995 -- With the exception
of historical information, the matters discussed in this press release
are forward-looking statements that involve a number of risks and uncertainties.
The actual future results of TTGL could differ significantly from those
statements. Factors that could cause actual results to differ materially
include risks and uncertainties such as the inability to finance the company's
operations or expansion, inability to hire and retain qualified personnel,
changes in the general economic climate, including rising interest rate
and unanticipated events such as terrorist activities. In some cases, you
can identify forward-looking statements by terminology such as "may," "will,"
"should," "expect," "plan," "anticipate," "believe," "estimate," "predict,"
"potential" or "continue," the negative of such terms, or other comparable
terminology. These statements are only predictions. Although we believe
that the expectations reflected in the forward-looking statements are reasonable,
such statements should not be regarded as a representation by the Company,
or any other person, that such forward-looking statements will be achieved.
We undertake no duty to update any of the forward-looking statements, whether
as a result of new information, future events or otherwise. In light of
the foregoing, readers are cautioned not to place undue reliance on such
forward-looking statements. For further risk factors see the risk factors
associated with our Company, review our SEC filings.
Contact:
Trilogy Capital
Partners
Financial Communications:
Ryon Harms, Toll-free:
800-592-6067
ryon@trilogy-capital.com
Source: Titan
Global Holdings, Inc.
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TGR Group, LLC
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San Diego, CA 92130
Hot
Topics: On The Go & Execute Sports
The
blog's 'Comments' sections have been busy lately....seems like some of
you really have some insightful thoughts about On The Go's (OTCBB:
ONGO) bizarre market cap numbers, and how the stock can continue to
deteriorate. Other readers have turned their focus on Execute Sports
(OTCBB: EXCS), thinking
the company may have finally gotten itself on track after divesting the
snowboard division, and inking the deal with Kawasaki.
To
jump into the mix for On The Go, click
here and look for the "Got a question or comment?" link at the bottom
of each blog entry. (The number in parenthesis is the number of comments
submitted about that blog entry so far.)
If
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click
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Don't
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companies, just post a message on the appropriate blog page. It's ridiculously
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it's legitimate.
It's
Coming
Hey
everyone, just wanted to give you an early warning so you aren't surprised
later....
...the
SmallCap
Digest is now going to be called the Small Cap Network Newsletter.
We're still going to be bringing you great small cap ideas and commentary,
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In
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things we've got in the works.
Though
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at smallcapnetwork.com rather than smallcapnetwork.com (though both will
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Not
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See
You Tuesday!
Don't
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be closed to observe President's Day (Washington's Birthday, technically).
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The Small Cap
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to as "SCN") , is an independent electronic publication committed to providing
its readers with factual information on select publicly traded companies.
SCN is owned and operated by TGR Group, LLC ("TGR"). TGR is not a registered
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of certain financial analysis and other pertinent criteria with a view
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Moreover, as detailed below, TGR
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