Sanwire Corporation (OTC Pink: SNWR) stock is in rally mode. After posting a comprehensive and decidedly bullish update last week, SNWR shares have been on fire, currently trading 25% higher on three-day volume 4X its three-month average. And the better news is that by the end of the week, SNWR shares clearly indicated that momentum to the upside is on its side. Based on its investor update, deservedly so.
In fact, SNWR presented a compelling case for why investors may want to act sooner than later to capitalize on a valuation disconnect that is not giving credit where it's due. Apparently, the more than 25% spike last week indicates some already are. Still, the more excellent news is that even after its recent surge, those considering a position now should also benefit from SNWR's sum of its parts that justify a significantly higher share price. Thus, investors may want to consider the move higher a precursor of better things to come before booking profits.
And that's not an overly bullish assumption, especially with Sanwire accelerating a 2022 business plan designed to unlock the value inherent to its transformative 2021 acquisition of Intercept Music, Inc.
Unlocking The Value At Intercept Music
That deal ushered in a strategy change at Sanwire. And from the looks of things, it's already adding considerable value. In fact, after streamlining its portfolio to focus solely on leveraging the strength of Intercept, SNWR has perhaps exceeded its own expectations and, at the same time, shows that despite its valuation trading in the nano-cap territory, they are exceptionally well-positioned to compete at a much higher level.
Best of all, being better positioned than at any time in its history, SNWR is executing its mission flawlessly. In less than a year, the combined power of SNWR and Intercept has delivered significant growth, made substantial investments to further its market reach, and has proved its model can successfully provide specialized services to meet current as well as the expected surge in demand from its core market of music labels and artists.
The more excellent news- they are just getting started. And while 2021 may have been transformative, 2022 is set up to be exponentially better. Proof of that is in the numbers, with 2021 totals showing best ever financial and operational performance with a tailwind to reach additional record-setting milestones this year. Not only that, growth could happen faster than expected, with SNWR's business model scalable to leverage Intercepts expertise to deliver unparalleled services offerings to clients compared to competing independent music service companies.
How good are the early results of the SNWR/Intercept integration? In a word, excellent. Already, SNWR has scored impressive increases across the board of performance indicators, including a 70% increase in year-over-year gross sales and a 22% spike in per artist revenues since 2020. In addition, SNWR is cleaning up its balance sheet, converting more than 75% of short-term convertible debt and successfully raising $1.1 million in new equity financing. That's on the financial side. Its services side is posting equally impressive results.
Client Base Continues To Increase At Record Pace
After expanding and refining service offerings, SNWR reported increasing its customer base significantly over the past year, serving at least 40 independent labels and roughly 300 independent artists. Also, a big push was made to monetize artist branding, with the company developing online merchandising stores to enhance revenue. That's not all. The company also expanded artist marketing services to include playlisting, public relations, advertising, and physical recordings to capitalize on other revenue-generating opportunities inherent to its artist-focused services.
So, with a best-in-class platform firing on all cylinders, what's in store for Sanwire in 2022? Likely, a very busy year targeting no shortage of opportunity. Consider this- there are about 12 million artists globally, and only about 5,000 of them will get major label deals. That leaves an enormous number of artists trying to figure out how to survive in an increasingly technological world. Sanwire wants to fill that representation gap.
Remember, talent isn't everything. Access to technology and leveraging the connections of industry players are just as important. And that's where SNWR makes its impact, giving artists a single platform allowing them to focus on what they do best and leaving the technical and marketing legwork to experts that understand that landscape. Sanwire checks those boxes.
Of course, it takes a fortified infrastructure to pull that off, and Sanwire met that challenge by building a platform that could scale with an industry exploding in size.
Infrastructure To Support Growth
Several initiatives were completed making SNWR more efficient in meeting that demand and need, which should also help revenues fall faster to its bottom line. Part of those enhancements included streamlining its customer support services, which has already resulted in a 50% decrease in customer service requests. That gives SNWR more time to focus on its labels. SNWR found that compared to individual artists, it can enhance operational efficiency and allow the company to maximize its resources by bringing multiple artists under its services umbrella in a single contract.
And with a staff that tripled in size over the past year, that's happening. SNWR hired a full-time marketing manager, added more customer service and marketing team members, and signed with top-end, outsourced service providers to provide multi-layered support for software development, public relations, and investor relations services. Outsourcing adds expertise while eliminating company-sponsored employee overhead. In other words, outsourcing key positions drives shareholder value higher by reducing redundant costs.
Indeed, tuning up its team sets SNWR up for success. Keep in mind the music industry tends to be a loyal beast, and it doesn't take long for gossip to spread. Do a good job, and everybody knows; do a bad job, and signing talent and labels can be a tremendous challenge. Fortunately, SNWR is the former, and the results of its work show.
Rewards Of Efficient Growth
Already, the SNWR team has helped artists earn more than 100 Grammy's and hundreds of other awards and nominations. That, of course, brings industry-wide recognition, the good kind. And through a tech team leveraging a dozen software patents for technology integrated into global communications products like Skype, additional favorable reviews are likely in the queue.
Even better, and as noted, SNWR is just getting started. Moreover, despite global trade and logistical headwinds, SNWR can boast this- they are in the right sector, doing the right things at the right time. And as a result of a booming industry, SNWR is in line to benefit since technology has no borders.
That's obvious. In 2021 alone, and during the pandemic, the industry continued to stack YoY growth in recorded and streaming music, emphasizing independent artists more than ever. In the first six months of 2021, recorded music revenue was pacing 27% over the same time last year. While good, the second half of 2021, once reported, is expected to be higher.
In fact, projections call for the music industry revenues to post their highest annual mark since the all-time high set in 1999. The streaming side, of course, has also exploded in size, with digital sales accounting for about 58% of total industry revenue. By the way, despite the broad global adoption, streaming is still in its infancy, evidenced by a surge in songs streamed per month up by over 300% during the past two years. And there are no signs of the trend slowing.
On the contrary, another boom cycle could be in the works, supported by an IPO by Universal Music (OTC Other: UNVGY) that raised $53 billion. Notably, investor interest was so strong that shares rallied more than 37% over the offer price. Obviously, industry investors understand what's at stake for companies positioned to seize their opportunities, and retail investors should know too. Moreover, they should realize how Sanwire fits in.
Compelling investment Opportunity
And the excellent news there is that SNWR makes a compelling case, even providing a roadmap, for investment consideration. Remember, SNWR has already put into place the framework needed to cash in on a $5 billion market opportunity, the amount spent in 2021 alone to acquire music rights from independent artists. Still, it's more than only selling music to drive client revenues.
Music artists also rely on merchandise and ticket sales to build revenue streams. But, an even bigger market emerged last year, with non-fungible tokens (NFTs) earning global popularity as a tool to monetize work. It's a huge market already, with global NFT sales eclipsing $25 billion last year. All of the above markets matters to SNWR. And better yet, because they are included in SNWR's revenue-generating strategies, they deliver potentially exponential increases to its 2022 revenue expectations.
It's a likely outcome, especially with SNWR providing a win-win partnership solution. Its Intercept Music subsidiary is one of the few full-service companies offering a comprehensive, powerful suite of tools focused primarily on independent labels and artists. Moreover, unlike some of its competitors, the Intercept platform delivers potentially unrivaled major-label services designed to generate revenue and allow the artist to maintain 100% ownership.
For artists, it's the best of both worlds. And signing clients is a win for SNWR in the process. Now, with the framework, capital structure, and personnel in place, SNWR is in its best position ever to leverage the value inherent to Intercept Music deep into the marketplace. As noted, at the right time, too. Artists and labels need what SNWR is selling. Why?
Because labels and artists using Intercept Music benefit from substantial marketing muscle, including massive social media reach, targeted ad campaigns, and playlisting. They also get turnkey online merchandising and, perhaps most valuable, free worldwide music distribution to more than 200 countries and 80 major streaming services. In short, SNWR's marketing and distribution platform gives independent artists and labels a competitive advantage in a crowded market.
A Proposition Too Good To Ignore
Hence, there's a lot to like from an artist and/or label perspective. Still, investors can win, too. And a trend is emerging to support that presumption, as investors note its roughly penny a share stock price doesn't serve justice to a company serving up high double-digit percentage growth in some of its vital metrics. But, as is often the case, once untapped value is exposed, investors will pounce on the investment opportunity if the price is right. Clearly, that's a scenario tailor-made for Sanwire today.
Is SNWR already in play? Signs point to yes. And if so, investors are right to bid SNWR shares higher. After all, not many penny stock entertainment technology companies can come close to offering the services SNWR provides. And in a competitive landscape separated by reputation, having advantages matters.
Actually, it's those advantages that make Sanwire stock too good to ignore. Amazingly, investors can still purchase shares at about a penny each and get exposure to Sanwire's harnessing the power of premium distribution, massive and effective social media reach, meaningful marketing, and artist merchandising programs that make them a one-stop-shop for artists and labels.
Changing The Representation Landscape
Thus, put most simply, SNWR is changing the way independent artists and labels do business and, at the same time, respect the person, the brand, and the content. Believe it or not, that's a difference unique to Sanwire, which also allows them to keep the lion's share of revenues.
It's another instance where being different is good. And the more learned about Sanwire, the better the case for investment consideration in its stock. Indeed, with its recent spike and PPS chart steepening, it's apparent investors are tuning into the Sanwire value proposition. At current levels and even higher, they may soon look like investment geniuses. But, here's the simple calculus behind their trade; they recognize a valuation disconnect.
Still, recognizing a disconnect is only half the battle; being timely to the opportunity makes up the other half. Right now, investors evaluating the SNWR value proposition have a chance to seize on both. And in a turbulent market, taking advantage of undervalued stocks in booming sectors may provide more than a safe haven; they can deliver potentially significant near and long-term rewards in the process.
Thus, while evaluating the Sanwire proposition may be a wise consideration, taking action may be a better course of action. They are, after all, composing quite the compelling story.
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