|Investview, Inc (OTC: INVU) Price: $0.15
||January 4th, 2020
|I. Investment Thesis
- Business Rationale – Investview, Inc. is a diversified financial technology and global distributor organization that operates through its subsidiaries to provide financial education tools, content, research and management of digital asset technology that mines cryptocurrencies, with a focus on Bitcoin mining and the generation of digital assets.
- Investment Thesis – An investment into Investview is based on a belief in Blockchain and Bitcoins’ outperformance coupled with the new advancements in the company’s business model. Previously, Investview was selling the computer equipment used to mine bitcoins to customers, having those customers lease the equipment back to the company because supply chain disruptions associated with the COVID-19 pandemic has caused Investview to roll back this plan (discontinuing ApexTek, LLC). Buying back the processing computers (approximately 99% of APEX purchasers accepted this offer) and holding them as assets on their balance sheet eliminated millions of dollars in lease liabilities for Investview.
- Growth – The recent rally in the price of bitcoin has caused Investview’s mining revenue to increase by approximately 67% from $840 thousand in October 2020 to approximately $1.4 million in November 2020 and $1.88 million in December 2020.
- Margins – This rally in Bitcoin also led to an increase in Investview’s profit margin by an estimated 109% from $386 thousand in October 2020 to approximately $808 thousand in November 2020 and 1.06 million in December 2020.
- Valuation – Investview currently has an enterprise value (EV)/EBITDA ratio of -154 & an EV/Revenue ratio of only 38.
- Catalysts – Potential catalysts that could move this stock is the ongoing investments into additional Bitcoin mining equipment, the enhancement of IT Operations and the continuation of Bitcoin making new highs with the continued interest in higher Bitcoin price targets from reputable analysts. The shift to profitability in the near future and the associated reverse stock splits that would follow two to three consecutive quarters of profitability is also a potential catalyst that could move this security.
- Entry – Utilize 25% of the total funds you would like to invest today at the market price. When INVU security drops to $0.10 utilize another 50% of total funds. Again, when INVU security drops under $0.09 utilize another 25% and keep the remaining 25% should await further instructions.
- Price Target – A Citi Bank analyst has projected a $318,000 price target for a Bitcoin. My assumptions are based on the analyst’s time frame being wrong and that it will take bitcoin 10 years to reach the target. My discounted cash flow (DCF) model has the following price targets for the price of an INVU share by end of 2021; bullish $0.50, baseline $0.27 and a bearish price target of $0.21. The probability weighted price target of these three price targets is $0.34 per share reflecting the potential of 127% upside by march 31st 2022.
|II. Business Overview
- Company Overview – The company operates primarily through its subsidiaries, to provide financial products and services to accredited investors, self-directed investors and select financial institutions. It also provides investor education products and newsletters that provide trading ideas. The company provides solutions to its clients in the financial community by providing an array of informational services that include stock market information and tools
- Products & Services – Its products include live workshops and workshop certificates; online training and courses; coaching services; and website/data fees. It provides a range of products that allow the self-directed individual investor to find, analyze, track and manage his or her portfolio. Its primary legacy product is an all-inclusive online education, analysis and application platform.
- Customers & End Markets – Kuvera, LLC which provides research, education and investment tools designed to assist the self-directed investors in successfully navigating the financial markets has began expanding into the European Union housing new offices in France.
- Competition – There are several other cryptocurrency mining companies that are publicly traded such as Riot Blockchain (RIOT) and Marathon Patent Group (MARA). Investview is currently trading at a 38x EV/Revenue, while Riot and Marathon are trading at 378 & 764 EV/Revenue. It is also worth noting, the immense amount of capital Investview plans to reinvest into increasing their capacity to mine Bitcoins in 2021. Their strategic partnership with DBR Capital is contingent upon the reinvestment of funds into SafeTek’s mining operations which will drive Investview to be mining more Bitcoin’s than their competitors as they strive for their goal of profitability.
- Geographic Exposure – Kuvera, LLC has expanded into Europe with an office in France having opened in 2018, also SafeTek, LLC is expected to be expanding existing and opening new mining locations within the United States.
CEO Joseph Cammarata
- Track Record – Mr. Cammarata who is 45 years old has over 25 years of experience in the financial services industry. He began his career at Datech where he pioneered NASDAQ market orders and the first off exchange electronic trading system. Datech was later sold to Ameritrade. He was also a co-founder and CEO of Sonic Trading where he designed and configured the first ECN aggregator and smart routing system. This system served 24 institutional clients and numerous broker/dealers before being acquired by the bank of New York in 2004. He then went on to be a Managing Director for BNY Brokerage. In 2010, he started and served as CEO of SpeedRoute LLC and Pro Securities ATS LLC. SpeedRoute is currently routing for some of the largest banks, broker dealers and stock exchanges in the United States, currently averaging 2% of US exchange volumes. In 2015, SpeedRoute and affiliates were acquired by OverStock.com. Mr. Camarata served as President of tZERO a subsidiary of OverStock.com from 2016 to 2018. He currently remains a Director of tZERO. Joseph has a long resume in the fintech space that speaks for itself.
- Compensation Structure – According to Mr. Cammarata’s Employment Agreement on November 29th, 2019; He is paid a salary of $1 per year over his 5-year contract. He is also compensated with 20,000,000 shares to be issued that will vest immediately, and an additional equity award of up to 250,000,000 shares in four equal increments of 62,500,000.
CFO Jayme L. McWidener
- Track Record – Mrs. McWidener earned her bachelor’s and MBA from Drake University and became an Auditor for Cahaba GBA in 2001 before joining HJ & Associates in 2004 as an Audit Staff member. She obtained her CPA license in 2007 and worked at HJ focusing on auditing SEC reporting companies, later being promoted to an Audit Senior and Audit Manager before becoming partner at HJ in 2014. In 2016, she established Mac Accounting Group, LLP, specializing in PCAOB audits for SEC reporting companies and AICPA audits for private companies in a variety of industries.
- Compensation Structure – Mrs. McWidener’s Employment Contract as CFO outlines compensation of $175,000 per year plus expenses over a 2-year contract. The agreement also details 20,000,000 shares of restricted common stock, of which one third is vested immediately and the other two thirds to be vested on each of the next 2 anniversaries.
Director David Rothrock
- Track Record – Mr. Rothrock has Executive Management experience in the automobile, fintech, financial service, residential and commercial real estate, corporate finance, property management, private equity, utilities technology, environmental remediation services, insurance and wealth management industries. Mr. Rothrock is the CEO of DBR Capital, LLC and through his roles as President and CEO of DBR Capital, MPower Trading Systems, Cedar Crest Partners G.P. LLC, and Rothrock Motor Sales, Inc; his efforts have collectively generated over $150 million in annual revenue. He also holds a J.D. from New York Law School with Bar admittance to New York, New Jersey, and Pennsylvania.
- Compensation Structure – Mr. Rothrock’s LLC, DBR Capital has been compensated 575,428,571 shares issuable upon conversion of three convertible notes in an aggregate principal amount of $3,300,000. As well as 104,000,000 default shares issuable upon the default of one or more of the notes owned by DBR Capital. Mr. Rothrock is the sole managing member of DBR Capital.
EVP Crypto Operations Robert Walther
- Track Record – Mr. Walther has over 30 years of experience designing, building and managing IT Infrastructure and operations for global companies. Since 2017, Mr Walther focused his IT career on the construction and management of multiple cryptocurrency mining facilities and vendors located across the US. These facilities support tens of thousands of mining servers which he optimizes to maximize and protect millions in revenue and profits during both bull and bear Bitcoin markets.
- Compensation Structure – Mr. Walther has been compensated with a salary of $120,000 per year plus 1.5% bonus on gross mining profit per month. As well as, 4,000,000 shares that will fully vest over the next four years.
|IV. Risks & Considerations
- Risk 1 – Further supply chain disruptions that would hinder SafeTek’s ability to receive new equipment for mining operations due to the COVID pandemic.
- Risk 2 – Regulatory reform that could adversely impact the use and demand of digital currencies.
- Risk 3 – The recent Bitcoin halving event that could reduce mining output, however, the next bitcoin halving is not scheduled to occur until March 2024
- Risk 4 – Investview’s revenues are not yet sufficient enough to cover expenses or fund growth, they may need to secure ongoing funding.
- Risk 5 – SAFE Management, LLC is an RIA & CTA firm that did not receive the necessary marketing and management required for growth and they are currently being reviewed for restructuring and alignment to Investview’s future goals.
- Consideration 1 – Investview is now under the leadership of Joseph Cammarata, to properly position Investview as a Fin Tech operation. Mr. Cammarata has a proven successful track record within this industry.
- Consideration 2 – The addition of Rob Walther as the director of mining operations is an incredible edge to SafeTek solutions growth. Since Rob came aboard in September of 2020, he has implemented software into ASIC and GPU mining servers to increase output. Rob has also hired a 24/7 dev-ops team to deploy, support and optimize mining operations. Rob has led operations to generate the largest revenue and profit margin ever earned by SafeTek Solutions.
- Consideration 3 – United Games, United League, and Investment Tools & Training, LLC have had no operations and will be restructured or eliminated completely as Investview continues to streamline operations.
- Consideration 4 – Investview has entered into a strategic partnership and has closed a multi-part financing agreement with DBR Capital, LLC which included adding James Bell & David Rothrock to their Board of Directors.
- Consideration 5 – A Citi Bank analyst set a 2021 price target of $318,000 for Bitcoin and the Chief Investment Officer of Guggenheim Partners, Scott Minerd has stated that Bitcoin could go as high as $400,000.
- Consideration 6 – The furthered adoption of Bitcoin as a currency, aids Bitcoin miners because they receive transaction fees depending on the volume of Bitcoin. As Bitcoins volume increases mining outputs will also increase.
- Consideration 7 – A leveling off of EV/Revenue valuation could push INVU stock higher depending on how investors view the valuation metric of Investview versus other publicly traded companies that mine Bitcoin (noted in the Competition section Above), which currently represents Investview trading at a 1000% to 2,000% discount to competitors.
- Consideration 8 – When looking at an investment into bitcoin mining companies, Investview stands out because it is hedged against the decline in the price of bitcoin. Investview has other revenue streams than just their bitcoin mining operations unlike Riot Blockchain & Marathon Patent Group who only generate revenue from mining activities.