Last month AlphaTrade.com (OTCBB: APTD), a digital media and marketing company providing financial as well as advertising services, announced in a brief press release that the company was moving forward with the development of new technology that would allow their trading platform E-Gate Mobile to be offered as a downloadable application on smartphones like Android, Blackberry and Apple, a move that would help the company gain a greater share of the multi-trillion dollar online trading industry.
While E-Gate Mobile is currently available for download from the company’s website they said they wish “to join the app world to provide users with the tools they need.” The financial tool would provide subscribers with “access their portfolio, true Level 2 data access and unrivaled real-time data speeds while connected.”
Additionally, AlphaTrade.com has expressed a commitment to develop a trading platform that would allow clients of any brokerage firm to execute trades on-line securely and immediately. This trading platform is expected to have a number of unique features including the ability to change languages instantly in real-time. This advancement would, according to CEO Gordon Muir, “allow any firm to compete directly with larger firms. In fact, the smaller firms will be able to charge less than the larger firms for online trading privileges.”
Muir’s enthusiasm hasn’t exactly won over investors though as many shareholders have questioned a July transaction in which he acquired more than three billion shares at $0.0008 as part of a debt conversion. Joining Muir in the acquisition of stock was company vice president Katherine Johnston who picked up 5 million shares at the same price. Just a few weeks later the company said they had a “revitalized outlook for 2010” and were hoping for “new levels of sales, revenue and growth continuing into the fall.”
After acquiring three billion shares it’s no wonder Muir would search for positive news to print, even if it’s just an outlook or an announcement of technology to come.
In their 10-Q filed August 10 the company reported a decrease in subscription revenue for the three and six month period ending June 30, a decrease in advertising revenue over the same three and six month period of time compared to 2009. Total revenues for the three and six months were $769,214 and $1,661,610, a serious drop off from the $1,149,932 and $2,901,078 reported during the same period last year.
The blame for the poor figures was placed on the financial market downturn yet they used this as a positive when explaining why they anticipate brighter days, saying “We believe the market conditions at present will encourage people to save money in every way possible. The cost effective products AlphaTrade offers in both the E-Gate and E-Trax should help us grow the client base for all of our products.”
APTD has said the affordability of their new online trading platform would allow for them to more resemble the dominant online trading firms like Scottrade and E-Trade. While the ambition may be there the practicality of such a plan may not find itself in reality. In that 10-K AlphaTrade.com stated they would prefer to build their business through the growth of revenue. That being said they didn’t rule out a secondary financing if they thought it would fast-track their growth. They have consistently been financed through loans from related parties and from raising capital through private equity offerings and the thought that revenue growth could sustain the operation appears, at the moment, dim.
That’s not exactly what a shareholder in APTD wants to see as they continue to witness massive volume on the stock yet little payoff for the shares. After an initial surge following the bright outlook announced by Muir the company has seen shares settle around the 0.0021-0.0024 range, a significant dip from its 50-day moving average of 0.0043 and 200-day moving average of 0.0118 and far removed from its days as a $9.00 stock.
What’s interesting about APTD is they are in a multi-trillion dollar market and if, as their own analysts have pointed out, they manage to gain a marginal 1% penetration of the total market share that could “result in revenues in excess of 100 million annually.” If their new technology is as promised and they are able to tap into the smartphone applications arena and provide clients with what Muir has called “dollar-for-dollar the best product in the market” then they may have the ability to make some financial strides.
The company has said they have a “realistic opportunity to accomplish 20 million in sales for 2011.” Of course that last proclamation came in an August 3 press release that also stated “These figures support a current share price of .02 to .025 which investors and shareholders should see immediately.” That hasn’t exactly happened.