*****Summary Till Date. These are Facts-MUST READ DD*****
Below DD every word is done by 'xyz1002'. I re-wrote it and removed those words which are off-topic.
1) The merger between SPCL and PixelMags (http://www.pixelmags.com/en/ ) is complete (DONE)
2) So far this merger is done 100% by the books – EXACTLY as laid out in the original May 8K
3) The remaining legal entity as of now is the publicly traded stock SPCL which is nothing but the business of PixelMags
4) As per the 8K, NVSOS OS was updated to 217M which will be the OS after the 1:100 RS which is perfectly legal. Nothing wrong with that.
5) New CEO was appointed
6) 3 new Directors appointed
7) The STOP sign was removed recently
There is no debt carried from PixelMags. 9) PixelMags was funded by Vert. See here (https://www.crunchbase.com/organization/pixelmags#/entity )
10) The $6M 2019 SPCL note was issued to Vert for that investment which is a standard convertible note in the Startup world. See here (https://www.ycombinator.com/documents/ )
11) The reason it is a SPCL note is because currently the remaining legal entity is SPCL. SPCL is PixelMags. PixelMags shares are no longer relevant
12) Those 2019 notes will be converted to preferred shares at some point in the future which happens all the time.
13) The company will file the finances very soon as they have already mentioned in the recent 8K that the RS will happen before Jan 31
14) Once the finances are filed, the company will apply for a ticker change and RS
15) The plan is to Up-list after the RS.
My Opinion:
16) As a shareholder all that we care about is the pps which in turn depends on the valuation of PixelMags
17) The only question remains is How much is PixelMags worth now. Divide that by OS and you get a pps number
18) No one knows the revenue numbers. But 3 different 3rd parties have mentioned $48M as their last number
19) I work in Startups and pretty familiar with valuation. I am part of the LA Startup community and this is a well-known company.
20) PixelMags is a real Tech company with lots of smart engineers.
21) The number of employees from 3rd party sites mentioned is somewhere between 32 confirmed to 200 not confirmed. This is a solid Tech company in my view
22) These engineers are worth a lot. Google, Apple, Facebook etc. do what is called Acquhire paying hundreds of millions of $$ just to get the engineers.
23) They have tremendous partnership and distribution channel with all the top magazines which is worth a lot.
24) Revenue and profits would be nice but are not that a big deal for valuing a company when it comes to a growing startup. Amazon, Uber, Whatsapp, Snapchat….just look at their early years.
25) The current revenue number is of interest but what I really care about are : traction, User retention, % user conversion to paid customers and PROJECTED GROWTH rate
26) Based on my more than 17 years of work in Startup world and without any numbers to go by, if I have to make a guess, this would be valued way more than $360M at this point.
27) My gut says this may get over $900M valuation if they give good numbers in all metrics.
28) Even $360M translates to $0.20 pps right now. Cut it by half and $0.10 is more than 13X from here
29) But there will be only 18M OS after the RS and a float of below 3-4M shares
30) My guess is that they will go for a secondary offering soon after the up-listing. Vert is also a merchant bank, meaning they must have lined up investors for the secondary by now.
31) There is ZERO evidence to suggest that this is a share selling scam. I mean a big fat ZERO.
32) This is a Tech Startup. Period!
Update: ESO Shares-PixelMags has top notch Engineers with ESO shares same as yours and mine
1) I just found out that PixelMags has top notch Engineers (ex-Google, MySpace)
2) Why It is so Important: All these employees have ESO shares which are original shares of PixelMags. When it is all said and done their shares will be the same common shares as yours and mine.
3) The standard practice is for ESO shares to be vested over 4 years. Since PixelMags was started in 2009, my guess is, if not all, most of these ESO are already 100% vested by now.
4) These guys are not hanging out all these years to get nothing.
5) In fact most of these employees must be expecting millions or tens of millions of $$ from ESO
6) Those who don't know Google and Apple have opened big time offices in LA in recent years and dying for Engineers. And don't forget that SnapChat is in so dire need of engineers that they have people in Silicon Valley only to steal engineers from Facebook, Apple, Google.
7) In other words if they wanted to jump ships, all these PixelMags engineers could have left any day with big paychecks, ESO and sign-in bonus. But they are hanging in with PixelMags
Some 3rd party sites suggest that PixelMags has 200 employees, other suggest that they have 70 employees, one site has confirmed 32 employees. My LinkedIn shows at least 16 existing employees in my network. 9) The bottom line is, no matter how you cut it, this is a serious Tech company in business. This is NOT a stinky pinky that some here seems to be suggesting.
P.S: ESO=Employee Stock Option
Good Luck.
Merry Christmas and Happy New Year.
Good Luck all!
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