NEW YORK, NY / ACCESSWIRE / December 26, 2017 / SeeThruEquity, a leading independent equity research and corporate access firm focused on small-cap and micro-cap public companies, today announced that it has issued a company update on Net Element, Inc. (NASDAQ: NETE).
The note is available here: NETE December 2017 Update Note.
Highlights of the note are as follows:
We are updating coverage of Net Element following the company's announcement on December 20, 2017, that it would create a blockchain-focused business unit with Bunker Capital to be focused on cryptocurrency. Highlights of the announcement are as follows:
- On December 20, 2017, Net Element announced that it would launch a new business venture focused on the rapidly growing cryptocurrency blockchain technology space.
- The new business unit is expected to become a decentralized crypto-based ecosystem, which will act as a framework for value-added services ("VAS") that can connect merchants and consumers directly utilizing blockchain technology while increasing the economic efficiency of all transactions being made within the ecosystem.
- Net Element CEO Oleg Firer stated that the company will launch the new division in partnership with Bunker Capital to develop and deploy blockchain technology-based solutions.
- Given its presence as an emerging company in global financial technology and payment solutions, we view Net Element's decision to pursue new business opportunities in the cryptocurrency space as a rational move representing a significant growth opportunity
- In the announcement, NETE highlighted the robust growth taking place in the cyptocurrency market, citing CoinMarketCap data that cryptocurrencies' total market values have increased from $17.7Bn to more than over $600Bn in 2017.
Updating target following Crypto announcement
Unlike many recent announcements of new businesses seeking to capitalize on the cryptocurrency trend, Net Element has an existing technology framework including payment and technology solutions for millions of electronic commerce clients. This existing presence in digital payment solutions should position the company well as it seeks to incorporate new blockchain and cryptocurrency solutions into its model. Since NETE disclosed the new initiative, shares have reacted rapidly, rising from $5.21 on December 19, 2017, to $14.56 at the market close on December 22, 2017. Our analysis of NETE had included a risk factor higher than peers in its industry due to our worry that the company would have to issue new shares well below intrinsic value. With improved market sentiment on shares and enthusiasm over the growth potential from its new cryptocurrency plans, however, we see this risk as reduced and are increasing the target to $25.00. We would look to re-evaluate the target with more details on the blockchain initiative, or FY18 guidance and any update on financing activities.
Please review important disclosures on the company's website at www.seethruequity.com.
About Net Element, Inc.
Net Element, Inc. (Nasdaq: NETE) operates a payments-as-a-service transactional and value-added services platform for small to medium enterprise ("SME") in the U.S. and selected emerging markets. In the U.S. it aims to grow transactional revenue by innovating SME productivity services such as its cloud-based, restaurant and retail point-of-sale solution Aptito. Internationally, Net Element's strategy is to leverage its omni-channel platform to deliver flexible offerings to emerging markets with diverse banking, regulatory and demographic conditions. Net Element was ranked as one of the fastest growing companies in North America on Deloitte's 2017 Technology Fast 500™ and South Florida Business Journal's 2016 fastest growing technology companies. Further information is available at www.netelement.com.
About SeeThruEquity
Since its founding in 2011, SeeThruEquity has been committed to its core mission: providing impactful, high-quality research on underfollowed small-cap and micro-cap equities. SeeThruEquity has pioneered an innovative business model for equity research that is not paid for and is unbiased. SeeThruEquity is the host of acclaimed investor conferences that are the ultimate event for publicly traded companies with market capitalizations less than $1 billion.
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SOURCE: SeeThruEquity