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Now imagine the CEO going into the room and saying:. Upon hearing this, Mark Cuban would immediately fall back in his chair and say: Ominto OMNT is an online cash back company.
It provides online cash back shopping deals through ominto. Ominto has had low revenues and continual losses every quarter for the past four years. Ominto is a former OTC exchange traded stock that just recently got uplisted to the Nasdaq on March 20th. The company has liberally distributed its stock to insiders and partners, and some are just now able to sell their shares. We asked them why do they have an investor relations department? Companies that are bullish about their future are usually eager to speak to investors and explain their plans for the future.
The proof is in the pudding. Why would anyone pay that much for this company? Investors should ask what is the purpose of this merger? How would an animation company benefit a cash back company? What are the synergies between the two? In the announcement, Ominto says:. The expertise we gain from Lani Pixels animation content will advance our marketing acumen to a new level of sophistication.
In the list of things that the company does above, it says absolutely nothing about marketing. If you go around the website, you can tell the company is about animation, not marketing. Here , it produced a film about the history of LEGO. Very rarely is it a good investment. Since animation is much different than the cash back industry, then why did this merger happen?
What is the connection here? The devil lies in the details. Pagel has a long history in the creation and production of animated film content, including many years with the LEGO Group. Above, it shows that Mr. Sorenson was employed in a Danish marketing firm and spent two years with Modulex, a division of LEGO where she worked in the accounting and logistics department.
So what is the real purpose of the merger? Is it some kind of a reverse merger plan where Ominto will transition from a cash back company to an animation company?
How was the animation company, Lani Pixels, appraised? Also of note is Mr. Ominto has many competitors in the cash back industry. Have you heard of Ominto or Dubli? Are they top competition in the cash back space? Cash back shopping is one of many types of deal type websites out there, along with regular coupon sites and daily deal sites such as Groupon.
Cash back sites generally generate the most traffic of the three groups because they offer incentives to shop, and feature popular stores where people shop every day. There are lots of coupon sites out there which are very easy to set up. We have many shoppers on our sites that we know use competitors because they see us on cash back comparison sites. The best rate gets the sale. The overhead running the business is very low, being there is no brick and mortar, and we are the middle man in the transaction.
The top cash back sites we compete with are Ebates, Fat Wallet, and Mr. With middle of the road competitors, it all depends on traffic.
As shown earlier in this report, Ominto needs to spend a lot of marketing dollars to get revenues. Their marketing expense for the quarter is often higher than the revenue. We are not surprised that Mr. Blasi has never heard of Ominto or Dubli. They were not shown on websites that listed the top cash back sites.
Again, Ominto and Dubli are not listed. You will notice in their list, they mention some of the same sites as the previous article we mentioned. To see a third cash back website ranking site to confirm which ones are the top, gobankingrates. Top 10 Best Cash-Back Websites. Again, no Ominto or Dubli. This site lists some of the same sites but a couple new ones. Ominto has issued a lot of shares to employees when it was low on cash.
Eventually, these shares will be sold. Above are the many stock issuances that Ominto awarded late last year. So we may see some selling from that investor in the near future. The second stock award on the above list, was to the CEO, Michael Hansen, who was awarded K shares upon the uplisting to the Nasdaq which was on March 20th.
Ominto paid its employees in stock because it was low on cash. They vest monthly in equal installments for 36 months. So those employees have fresh new options every month. In addition to the above shareholders that will sell at some point, the company itself plans on selling shares. Now imagine the CEO going into the room and saying: In the announcement, Ominto says: Ominto plans to continue to develop Lani Pixels as a marketing service company… It also says on the Ominto announcement: In the merger announcement, it states: I have never heard of those companies until you just mentioned.
How big is cash back shopping? The ones they list are: The Lani Pixels deal and stock issuance is explained earlier in this article.