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INUV: S-4 Shows ConversionPoint and Pro Forma Financials

12/21/2018
By Lisa Thompson

NYSE:INUV

READ THE FULL INUV RESEARCH REPORT

The S-4 was filed for Inuvo’s (NYSE:INUV) merger with ConversionPoint and we now have some financial and product information on privately held ConversionPoint.

ConversionPoint was founded in 2016 in Newport Beach, CA and currently has 96 employees. It purchased two companies in 2017: Branded Response, an e-commerce seller of health, wellness and beauty products and Minneapolis-based Push Interactive, LLC, a direct-to-consumer marketing company.

Push’s technology platform served as the foundation for its unified e-commerce solution for managing its internal e-commerce product campaigns, campaigns for third parties, and for licensing as a self-serve SaaS. ConversionPoint then acquired SellPoints, in December of 2017. SellPoints had a suite of software solutions enabling brands to create and syndicate rich media content to a network of online retailers, track online consumer behavior, retarget consumers based on their online behavior, and deliver robust data analytics and reporting.

Today ConversionPoint serves customers across a wide range of industries and geographies including both traditional and online retailers, and small and large brands, such as Canon USA, Intel, Brother, FujiFilm and Nikon. It has long-standing relationships with Wal-Mart, Lowes, Costco and other major online retailers. These customers integrate ConversionPoint’s JavaScript tags into their online retail store web pages, allowing ConversionPoint’s brand customers to directly publish interactive experiences and product information to retail websites. Management has identified a number of specific near-term revenue opportunities by combining with Inuvo, including upselling Inuvo’s high-margin AI powered IntentKey media to ConversionPoint’s existing enterprise customers and online retail partners, as well as integrating ValidClick and creating a new traffic acquisition source for them.

ConversionPoint says it competes with Optimizely and Volume in the digital media optimization space; Salsify and WebCollage in the rich content creation and product information syndication space; Limelight Networks (LLNW) and ClickFunnels in the sales conversion space; AdRoll and Criteo (CRTO) in the remarketing space; and Narvar and ShipStation (acquired by Stamps.com- STMP) in the shipping and logistics space.

ConversionPoint was said to be valued at $146 million in its most recent $11.3 million private company transaction. It generated $49.9 million in sales in 2017. For the first nine months of 2018 its sales were $28.6 million, down from $39.2 million in 2017. The entire decline in revenues was from e-Commerce products, an area the company is deemphasizing. In 2017 eCommerce was $41.7 million in revenues. In the first nine months of 2018 it was $16.1 million versus $35.8 million in the first nine months of 2017.


View Exhibit I

During the first nine months of 2018, ConversionPoint lost $16.7 million; included in the loss was one-time stock-based compensation of $7.3 million.

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