Investor X from RB visits WIZ:
My visit to WSi today (Part 1)
I arrived at their office in downtown Vancouver at about 10:00 AM. I spent the first hour or so with Theo--he gave me the complete tour, and then we sat down in their meeting room and talked. I asked him a long list of questions, and we discussed just about everything under the sun related to our little company. I met and spoke briefly with many people there, including their head tech guy, and I spent the last hour or so talking with Richard and Phil of IR. Here's what I thought...
Impressions:
Essentially, it had the look and feel of a young, start-up company; everyone there was very excited and literally bursting with enthusiasm. Further, everyone with whom I had a chance to interact struck me as intelligent, driven, and focused on the task at hand, Theo especially. I was also impressed with our CEO's candor; he always answered my questions directly, when possible, and he didn't attempt to hype the company. He also recognized the validity of the concerns that I brought-up during our discussions, and he wasn't hesitant to admit where they need to continue to show improvement. Basically, he is the type of CEO that I look for in a company. Their tech guy (I apologize, but I forget his name) was top-notch as well--he knows his stuff. Richard and Phil were personable and thoughtful, as you might expect.
Questions and Answers:
Question #1: What are revenue and earnings projections for the current quarter, and are you continuing to exceed your targets?
Answer: Their current internal target is $1.5M for the quarter, and they are well on-track to exceed that right now.
Question #2: Will you continue to maintain your focus on profitability, and--if so--how will you continue to insure that you have the working capital that you need to continue your aggressive growth?
Answer: Yes, they will absolutely maintain their focus on the bottom line. Obtaining financing and capital is not the problem?they already have plenty of offers from several interested parties. Their focus is to make sure that they choose the right kinds of partnerships and agreements. The last thing that they want to do is take a short-sighted opportunity for a quick cash infusion that will not benefit the company in the longer term. (I was very impressed with their thoughtful, long-term perspective on the financing issue). Also, the fact that they already have the incubator infrastructure in place (via the merging of the three complimentary businesses when the company was formed) makes it less critical for them to dump millions into building it.
Question #3: How close is the SS deal to closing, and when will the new site be launched?
Answer: The deal is done, and it is now simply a matter of structuring it in a way that will benefit the health of the company the most (without hurting it via a huge tax liability), and?again-- their primary focus is to maintain a continued revenue stream from the property (and, thus, avoiding the short-sighted lure of a huge cash pay-off). Once again, I was impressed with their thoughtfulness in this matter.
Question #4: Are you aggressively pursuing the spin-off of any other sites, such as Targetpacks?
Answer: Absolutely. However, once again, they are not interested in the quick buck. They are focused on finding the right partners and the right deals that will benefit them the most.
Question #5: Outline the state of your current plans for expansion in North America, Europe, and Asia?
Answer: The office is open in LA, and we are aggressively looking for more people to add to the team down there. We will eventually be relocating the company down there as well. New York is coming very soon. We will be traveling to Europe soon in search of opportunities, and we are already working on some deals with some Asian partners.
Question #6: You have mentioned on several occasions that you are working on integrating new multimedia technologies into your sites and opt-in e-mail products--when will begin to see this implemented?
Answer: One of our primary goals here is to create fully interactive, live broadcasts on our (and client) sites, and to implement these broadcasts partnered with well-known, proven entities in the media industry. We anticipate launching some new content along these lines?as well as announcing some new such partnerships--in the near future (i.e. next couple of months). (I hope that you were able to read between the lines here?keep your eye on Hollywood?)
Question #7: What new sites are currently under development?
Answer: We will continue to focus on new financial and entertainment (with streaming media) sites over the near-term (again, keep your eye on Hollywood?).
Question #8: Given the competitive nature of your industry, why do you believe that you will be able to both survive and thrive?
Answer: At the conception of Wsi, we already had the infrastructure for the incubator model in place, giving us a head-start on many of the other start-ups. Our focus on ?proof-of-concept? and the bottom-line will support our success as well. Also, we have very talented, key people involved with this company, and we have key connections that will start paying dividends during the coming months. Basically, we know that we are using a proven model, and we have confidence that we have the people to execute it successfully.
Question #9: Given the competitive nature of the job market in your industry, how are insuring that you hire quality people as you expand?
Answer: We already have a very intelligent, talented, focused group of people in the company, and that is an important consideration for new hires. As far as financial incentives are concerned, we are very thoughtful about (and generous with) stock options, so our employees can share in our success as we grow. We are currently stretched very thin?we simply don?t have enough resources (i.e. people) to do all of the work that we have. We?ll probably grow to about 75 employees by the end of March, and perhaps to 100 not too long after. They also have plans in the works to move into their own building (they currently occupy the better part of a floor of an office building).
Question #10: What are your current plans to continue to gain exposure?
Answer: We will shortly be hiring a new PR firm (yay!), and we are also focused on moving our stock to a more reputable exchange.
Continued? (I thought I would give RichR something to read)
X
My visit to WSi today (Part 2)
I must confess at this point that Theo and company shared many things with me "off the record," and I will honor my commitment not to share them publicly. But I will say this: there are many, exciting developments and partnerships (with well-known entities) in the works that are not publicly known yet (obviously), so be prepared to be pleasantly surprised during the coming months. If you think today's news was exciting (and, yes, I do), well, you ain't seen nuthin yet...
I did raise several concerns with them as well. I told them how poorly in reflects on the company when they release PR's and content on their sites that contain spelling and grammar errors, and they agreed. I suggested that they hire a full-time content editor to manage this aspect of their business, and they also agreed that it was a good idea. Further, I cautioned them about making commitments that they are unable to keep--I must have used the phrase "under-promise and over-perform" about ten times today while talking to them, and they also agreed that it was the best path for a company to choose. Phil admitted that he had learned a valuable lesson and become slightly gun-shy after the CNBC rumor fiasco. I told him I thought that was great, because if day-traders and players looking for a quick buck aren't happy with what they hear from them--and decide not to buy--I'm actually thrilled. I would rather have long-term, committed investors holding stock along with me. Sure, day-traders help the stock to move-up when they buy, but what happens when they complete the trade a day, a week, or a month later. Conservative IR statements keep the stock healthy, in my view.
Anyway, enough of my babbling already. If you have specific questions, please ask.
Folks, I honestly believe that WSi is the real deal, and I am very happy to sit back and give them the chance (and the time--thus patience is required) to prove it. How about you?
Best Regards,
X
(Voluntary Disclosure: Position- Long; ST Rating- Strong Buy; LT Rating- Strong Buy)
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