While SelectCore Ltd. (TSX: SCG.V) announced on Thursday that they had retained TMX Equicom to provide strategic investor relations and financial communications services for an initial term of twelve months investors haven’t exactly seen the move as a reason to jump on board as shares have held steady at 0.170 with minimal trading volume.
Despite the slow start there are those who see the move as a positive sign that SCG.V, which operates as a a leading prepaid payment solutions provider for underserved markets, could be preparing to make a push, something company CEO Keith McKenzie alluded to in Thursday’s press release when he stated “We have some important milestones ahead of us this year as we expand our business, and we look forward to working with Equicom to communicate our story to a broader cross-section of the investment community.”
Of course without going into any detail about what those may be investors are left to come up with their own conclusions. That being said, it should be noted that on Wednesday SCG.V announced that they intend to issue 583,333 shares at a deemed price of $0.18 per share for accrued directors compensation in the amount of $105,000 owed to two independent directors of the company.
This of course has to be approved by the TSX Venture Exchange but the willingness of these two directors to accept shares to erase debt could be a sign that they have faith in where the company is headed. As part of this agreement those shares are subject to a four-month hold period so it’s not like they can just be dumped onto the market and drive down the share price.
Knowing that SCG.V has an agreement in place with TMX Equicom for an initial twelve month term could also be viewed as a positive sign for shareholders, indicating that the company isn’t looking to simply garner investor awareness over a one month period and inflate the price of their shares. Instead it gives the appearance that they may actually have what McKenzie mentioned, “important milestones ahead of us this year.”
It would be nice if SCG.V was able to hit those milestones because while it may be impressive that the company has been ranked by Profit100 as one of Canada’s fastest-growing companies in 2006, 2007, 2009 and 2010 this is 2012 and shareholders aren’t looking to the past. At some point, and likely very soon, SCG.V is going to have to deliver the results shareholders want or they will simply drop the company.
The good thing for SCG.V is that their industry remains strong as they service “a market of millions of under-banked consumers through its technology platforms and extensive retail distribution network” with their offerings including prepaid stored-value cards to mobile top-up and remittance solutions.
SCG.V has also shown that they have an understanding on where the market is going and have adapted to change as evidenced by their thee-year distribution agreement with Gift Card Stop LLC in which “major gift card brands will be made available through SelectCore’s point-of-sale platform at retail partner locations across Canada and the United States. In lieu of having cards on a rack, virtual cards will be delivered electronically, in real-time at the point-of-sale.”
These virtual cards serve to satisfy not only consumers but retailers as well, something pointed out by Jeff Ehney, Gift Card Stop’s principal, “Our electronic delivery system enables retailers to carry gift cards without the hassle of managing inventory, while giving consumers access to hundreds of cards.”
Investors should be looking for SCG.V to make a push in the near future, especially given the fact they have inked a deal with strategic investor relations and financial communications services firm. A spike could be coming soon, the only question is will SCG.V be able to maintain that spike or will they fall back down to the disappointing level they currently hold.