FUT is no pump and dump, but INT might be

Up until now I have been neutral on INT's valuation. Of course, I did show that Futura's Loyalty Program has ten times more revenue than Intertainment's New Media division, but I can respect that Ortsbo and other INT projects have value.

I got a couple of private messages on Stockhouse regarding FUT and how I am pumping it. Apparently somebody on the INT board consistently links to my Futura posts there and the INT longs don't appreciate that so they go to me. A post I made on Stockhouse got me motivated to write this piece where I will compare how FUT and INT are perceived outside of the small world of Canadian small cap investing.

The first part of my Stockhouse post was intended to show another member a list of Futura's competitors. I found Points.com supported programs to be a reliable industry list as Points is a popular way to redeem or exchange your points.

https://www.points.com/pdccontent/supportedprograms.html

Here was my commentary from Stockhouse related to this link:

"Futura is there. There's a lot of them but the majority of them are airlines. There's also a few chain store rewards programs like Petro Canada, Office Depot, Best Buy etc but those are not really competitors since they will never try to expand outside their own retail chain.

Notice the big void when it comes to anything car related. Canadian Tire is the only one that really pops out. I go into a dealer to get my car fixed and I get jack all (for now until Futura takes care of them).

Here's another thing I like about Futura. I can go onto a website like Points and they have Futura's business on there without any mention of the stock. I go find something about Ortsbo and there's always something connected to INT in some way. Futura is a real business with real revenues that has respect in its industry and not just with investors and day traders."

In the process of researching Futura's competitors, I stumbled across an industry article that outlines the relationship between TADA and their loyalty program. This article was written by Joel Cohen, the TADA President, a respected automotive industry leader:

http://www.wheels.ca/article/794777

There was only one line mentioning Futura in the entire article as it was described as an Aeroplan program, which is accurate. If you typed in Futura into a search engine this article likely wouldn't come up until much later in the search results. This makes Futura go very under the radar with investors. Even though this article is extremely good for company revenue growth, it is practically useless for FUT Investor Relations. End result - the company is not being credited for extremely improved revenue prospects when this article makes its rounds. Automotive industry members are motivated to go to Futura to sign up for the program when reading this article, not to go into their trading account and buy FUT stock. That makes the company's stock price undervalued, not pumped. The line goes as follows:

"The program will be administered for TADA dealers by Futura Loyalty Group, the sales agent for Aeroplan in the automotive category"

Here was my commentary on Stockhouse with respect to this one line:

"Even though it is just one line, this line is HUGE. This implies that Futura is the exclusive sales agent for Aeroplan in the automotive industry or at least perceived as such by an industry leader. But Futura is not exclusively automotive focused so this is an opportunity to dominate one category and then see if dominoes fall in other major retail industries thanks to it.

Whether or not Futura is actually an exclusive sales agent for Aeroplan by contract doesn't make a difference. An industry leader thinks so and perception is 90% of the battle. Sure there are other soft drink makers but we all think Coke and Pepsi is a duopoly.

So if you're a car dealer, body shop or tire store in Canada and you want a loyalty rewards program, you either do your own (which is very hard for a small or mid sized player) or you go with Aeroplan administered by Futura.

So to answer your question with respect to competitors - within the auto industry it sounds like Futura is the only game in town (other than Canadian Tire money). Outside the auto industry, they have several potential competitors as listed in the points.com link but in my view that's just gravy if they can really kill it within the automotive sector.

Remember, this is not me as an investor or Futura saying it. This is a respected member of the automotive industry, Joel Cohen, President of TADA making the claim that Futura is the sales agent for Aeroplan in the automotive industry. Where are respected professional translators saying Ortsbo is the translating tool of the industry?"

This leads me to my point of my last sentence as to where Ortsbo stands within the industry of online translation and does it get any respect. My first step was to put a neutral industry search term into Google. That was "online translation".

A list of the websites that first came up were webtranslation.paralink.com, babelfish, Google's translator, freetranslation.com, babylon, worldlingo, something called omniglot and reverso.net. And it goes on and on like this. I went through the first dozen pages and Ortsbo did not make the top 120 webpages for online translation.

Now I typed in the word Ortsbo to see what I could find. The first link I could find that doesn't direct me to ortsbo.com or intertainmentmedia.com was this:

http://www.variety.com/article/VR1118034959?refCatId=1009

Hmm Gene Simmons backs Ortsbo. That's good. Who is he, an industry expert in translation services? A sponsor who is going to provide INT with a lot of revenue opportunities? No wait, he's a rockstar who has a personal vested interest in the success of Intertainment Media.

Remember what I said about the Futura article above. That there is one line mentioning Futura as the administrator - tons of revenue opportunities, hardly anything to pump the stock.

Now contrast that to this article. Does the following sentence:

"The Kiss frontman and serial entrepreneur has signed on with Intertainment Media's Ortsbo as a business partner and spokesman."

Make you want to try out Ortsbo translation services, or does it want to make you buy INT stock?

There is only one paragraph that alludes to revenue opportunities and that is this:

"The software can also be utilized across instant messaging, email and RSS. While Ortsbo is free on social media, some of its offerings require payment, including mobile apps to be deployed this summer."

There's one final paragraph that I would really like to challenge:

"Simmons noted numerous potential applications for the entertainment business since Ortsbo can allow stars to speak to fans in more than one country simultaneously. "Any pop culture entity has to be worldwide," he said."

If Simmons said this then he is completely off base. Twitter is an application where you can reach people of multiple countries at once. What he meant to say is Ortsbo is an application where you can reach people of multiple languages at once. And that's a much more limited use because most of the internet is in English and cultural and language barriers are often the same.

How many celebrities do you know of that can't speak English? There's only one that came to my mind and that was Ichiro, the baseball player for the Seattle Mariners. And I don't think I really have much of an urge to chat with him. I have great doubts that any Indian or Chinese person who is isolated enough from Western society to not know any English has any knowledge of or caring to speak with a celebrity from the Western world. They have their own culture and pop icons that they want to follow. And we have likely never heard of them.

So let's review. In a Futura article that barely mentioned the company name, a revenue opportunity within the automotive industry was clearly identified. The respected automotive industry leader Joel Cohen implied Futura was the way to go for a Loyalty Program not only to his members but to other automotive industry members across Canada.

In the Ortsbo article, Gene Simmons, a person with a vested interest in Intertainment Media, gave some phantom application of celebrities using Ortsbo to talk with their fans (when they already use Twitter for that). He identified no clear revenue opportunities with respect to this idea.

Which article will be used as social media for automotive members to provide revenue opportunities for a company? Futura's.


Which article will be used as social media as fodder to pump a stock price? Intertainment's.

Before you go and complain about a stock being pumped, perhaps you need to take a look at your own investments to see how much they are being pumped.