Bright Things Share Discussion Threads

[the analyst] 13/7/2009 23:25

It's also worth mentioning, that those calculations assume a 0% attrition rate...

[the analyst] 13/7/2009 23:16

Of course, the big thing, with respect to any trading update for SocialGO, will be the percentage creating paid-for "premium" networks and the average revenue that each of those premium networks generates

In the last update, we saw that the rate was 0.86%, compared to the ning rate of 1.20%

We know we are looking for 3% in the future, with many people hoping to reach the dizzy heights of 5%. That seems quite optimistic, considering that last update showed only 0.86%, but, the last trading update was also very early on in the product development. There is plenty of potential for improvement given the way SocialGO has developed.

We also know that ning obtains $55 per month from their paid=for premium users, which seems quite high to me. Can SocialGO manage to get the same sort of revenue from their network owners?

How many networks will SocialGO need to reach break-even? - it's almost impossible to guess, given what little data we have right now, but I'll have a go. Lets say they need to make $3m per year to reach break-even....

First, consider a scenario where they out-perform expectations and they manage 5% of the networks paying for premium services and also beat ning on the RPU, bringing in $60 per month each. In that case, they would need around 80,000 networks in total, with just over 4000 paying networks. Easy!

Then consider if they were to underperform - perhaps only managing to get 1% paying, and those that do only bring in $30 per month on average. In that case, they would need around 800,000 networks in total, with just over 8,000 paying networks. Not so easy!

You may need to check my maths on that, doing this with a glass of laphroaig :).....

[the analyst] 13/7/2009 23:02

Looking at the last time they appointed a new broker, it was about 3 months prior to the placing. In between those times, BGT released a trading statement to say that they were pleased with the progress, presumably to help the share price and to help with making sure the placing was successful. At that time, they didn't have a great deal of information to release to the public apart from initial sign-ups and "product development going well" sort of thing

So, if they follow the same pattern, we should see a trading statement and some research published in a couple of months time, about a month before we see the next placing.

Hopefully, this time the news they come out with will have a bit more substance to it than the last trading update and so will help the share price rise - this could enable them to get a placing underway at a premium to today's price, if we are lucky

With socialGO likely to have over 80,000 networks by September, I'd like to see them raise cash at 2p per share minimum

If not, then I guess we are looking at another £750k at 1.25p...

[the analyst] 13/7/2009 22:56

Digger, am around right now and will also be around tomorrow pm to talk about the websites etc.

Cheers

[the analyst] 13/7/2009 19:19

I think Blue Oar/Astaire are probably about as good as Hoodless!

That is, not ideal, but one of those brokers that takes on microcaps and doesn't charge massive fees. Until BGT are bigger, I guess we (including the company) just have to put up with brokers like this.

I agree that a new broker almost certainly means a new fund-raising.

Astaire will have different investors/contacts to sell the shares to and so hopefully they will be able to raise any more funds the company needs without too much of a problem. In an ideal world, they would raise any funds needed at a higher price than last time, but much of that will depend on the next trading update and whether investors pick up on the story

We still shouldn't need any cash for a few months, because we only just raised £750k three months ago. My guess is that they should have enough to last until at least the end of September

[bobbyn23] 13/7/2009 11:31

Carl, i agree on your sentiment but dont agree on continuous needs to divulge funds without something tangible now ie fully working optimal product lacking on advertising could warrant that IF take up has proven to be solid on whatever promotion based approach has been used.
Prob is when you sell shares this low with bucket load of options that can hit you on any rally.... you really start to hurt and at moment it does!
With such timing of RNS to keep yu up to date its just a killer! Social go is getting on year old nearly from inception to where we are now....

[carl79] 13/7/2009 10:56

Bobby - I simply have to keep open the possibility that BGT need mor money...Being the ever optimist is getting old now and GGG shook me into that reality :-(

However, exceptional news such as premium sign ups well ahead of expectation, growth way ahead of expectation etc could rerate the stock and allow for a more healthy placing price...I am not holding my breath though as this type of scenario is rare...

Regardless, I am confident that they are adding numbers and that more and more people are taking out paid for services - they should be able to return value to shareholders as long as this continues...

[bobbyn23] 13/7/2009 08:57

Carl cant see in anyway way at all how another rights issue is going to be good news at all regardless of exceptional news. I dont think its for that but more for client reach...ie i expect these guys are there to give access to US (then poss new funds could be raised) and also hedge funds etc that are willing to take on long risk/reward scenarios. Capital raise again could just break this company you cant have that many shares to make it worthwhile anymore

[carl79] 13/7/2009 06:59

if history repeats itself, we are soon to require more funds...anyone know of this "Astaire Securities"?? They are meant to be niche but niche in what respect...question for me is at what level are they going to fund - discount or premium to share price ..Unless we see some positive news then a discount to 1.4 is likely imo - news can not be too far away though, we've had some significant "unofficial" news and bundled into an RNS I expect the market would react favourably

[carl79] 10/7/2009 14:10

TA yup...this and the other irons that i have in the fire...shame as GGG was a real chance to make £100s of K - unfortunately we got screwed out of a great asset...not sure how much is "screwed" and how much is mgt incompetence...ho hum...

[77monty] 10/7/2009 13:01

Nice buy gone through at a premium.

[the analyst] 10/7/2009 12:30

You'll just have to make your money on this one, instead, Carl!

[carl79] 10/7/2009 08:38

seems that way ian...shafted is about the right word but that was the risk...

[iantc] 10/7/2009 07:46

ot,unlucky with ggg carl looks like you got shafted a bit like the guys at brr .the mining game is all about risk/reward but in this climate the risk is quite high on most ,i have a very big holding in mwa and may have the same problem, operate in a bent country

[the analyst] 08/7/2009 13:31

I seem to remember a 50% figure from someone official, Carl - it may have been one of Alex's presentations, but can't say for sure

I've noticed that there have been further improvements this week, especially on the experience when you sign-up. It now goes through to a short video that helps explain about how to set up a network, a few features etc. It really does look good and should really help people when they register

Also, it's been a pretty good week for sign-ups, with over 2000 networks registering over the week.

Come Autumn, when the weather gets worse and people get back to their screens in the evenings, I'm hoping that can get up to a regular 3,000 registrations per week and would like to see some 5,000 sign-up weeks come early 2010

[carl79] 07/7/2009 19:03

TA - ref your question on the widget lab / SocialGO revenue share - I'm not sure but I know they share the revenue...did not think it was as high as 50% but it may have been...no big deal yet but will likely provide a nice stream of cash in the future as networks become more feature rich...

[the analyst] 06/7/2009 20:57

Good spot

I agree, though, it's not much cash

I think that socialGO take 50% of the revenue. Is that right Carl?