Sanwire Corp. (OTC Pink: SNWR) is generating significant buzz among small-cap investors. And rightfully so, after charting exceptional growth from its transformative 2021 acquisition of Intercept Music. The better news- SNWR expects more of the same in 2022, with Intercept Music continuing to gain revenue-generating traction in an industry not short on massive opportunities.
In fact, SNWR appears ready to pounce on a number of potential million-dollar deals, offering guidance suggesting that 2022 could be its breakout year. Thus, while its stock price may be consolidating at penny levels, Sanwire's transition tells another story. And it's a good one that makes a case for why SNWR stock should be trading appreciably higher.
Significant growth, label and artist signings momentum, and streamlined business operations are pillars of the argument.
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Bullish Case For Investment
While those metrics alone should ignite a rally, it's important to note that Sanwire has done more than just expand its services and increase revenues; the company has also built a framework designed to expedite near and long-term growth. And not only is it evident from the financial milestones reached that SNWR is setting itself up for success, but they are also exceeding their own bullish guidance and doing so in a way that has dollars falling faster toward its bottom line. That factor can't be overlooked or underappreciated.
Nor should this- the SNWR investment proposition gets even more potent considering that the music industry looks poised to reach combined market sales not seen in more than 20 years. And good news for the industry is excellent news for SNWR, especially with the company better prepared than ever to capitalize and cash in on the sectors booming business.
Results on that front could come sooner than later, which should help prompt investors to act on an SNWR investment thesis exposing a significant disconnect between its share price and its operating momentum.
Capitalizing on New Opportunities with New Acquisitions
Much of Sanwire's transformation is attributed to their timely and accretive acquisition of Intercept Music. Intercept is a respected, growing, and successful one-stop-shop for labels and independent artists, providing high-quality services covering marketing, distribution, merchandising, and more. Most important, artists and labels recognize the combined power at Intercept, with record numbers of clients signing to benefit from an Intercept platform offering convenient and centralized access to all the essential services the music industry demands. The rewards of providing best-in-industry service are starting to show, and financials lead the way.
Since Sanwire acquired the company in 2021, Intercept Music scored a 70% increase in gross sales, increased its per-artist revenue by 22%, and signed more clients than ever to drive 2022 numbers even higher. Not only that, Sanwire retired more than three-quarters of its short-term convertible debt, raised more than $1.1 million in new equity financing, and positioned itself to benefit from a management team flush with industry expertise. It's the combination of all that puts Sanwire in its best operating position ever, and results of that strength should show when Q1/2022 numbers get reported.
Investors expect strong results from an Intercept Music asset showing no sign of slowing its growth. In fact, increases are expected to add to an already impressive client base of 40 music labels and 300 independent artists. Keep in mind both artists and labels generate revenues for SNWR. Thus, while its reported 22% increase in per-artist revenue is now a historical number, it provides insight into what a more extensive roster of clients can deliver. Obviously, more artists and labels combined with a more streamlined business model translates to higher margins and more powerful revenues. SNWR has that potential in Intercept Music.
Expanding Services for an Expanding Client Base
As a matter of fact, Intercept Music is more than just a flagship asset; they could be helping usher in a new way to represent industry clients through a cleverly structured business model designed for maximum client representation and high margin revenues.
The company recently announced the introduction of several new service platforms to create targeted marketing campaigns to build worldwide recognition for its clients. Notably, these new platforms and services take advantage of a new age of music industry promotion, integrating mass social media reach through one simple to use and effective dashboard. What's that mean for clients? A lot. Foremost, it allows them to do what they do best, perform and create. That means they can skip the agonizing process of manually carrying out their marketing, which can take hours per day, and instead use the time saved to produce content. It's the best of both worlds for clients- they can perform, create, and produce and still get all the much-needed social media benefits. SNWR and Intercept Music win on the revenue side from providing those services.
Marketing is just one service of many. There's much more to solidifying Intercept Music's value proposition to SNWR investors and clients. For clients, offering a comprehensive suite of services is the attraction. Investors benefit from a more efficient company than ever from implementing procedures that maximize its in-house team and outsource work to specialty companies to expedite delivery and limit redundancy and overhead.
Of course, while milestones reached are notable, turning them into catalysts is better. Sanwire knows this, resulting in an aggressive mission to cultivate value for shareholders beyond solid financial performance by creating a platform to keep its expected surge in growth manageable and sustained. As it turns out, Intercept Music is putting the right pieces together to make sure that happens. That's excellent news for SNWR investors.
Offering Both Sides of the Music Distribution Market
Remember, too, Intercept Music is no new kid on the industry block. They have decades of experience and offer a comprehensive and proven valuable suite of essential services to labels and independent artists, and its list of services offerings keeps getting better.
Intercept Music expanded its services portfolio in 2021 to include playlisting and physical recording services. This was an incredibly wise and timely move on the company's part. As a matter of fact, 40% of all the music being listened to right now is streamed from music services like Spotify, Apple Music (NASDAQ; AAPL), and Amazon Music (NASDAQ: AMZN). These services emphasize playlists, which are becoming increasingly popular among listeners. Intercept is paying attention.
And that attention and expansion to playlisting present a compelling opportunity for its clients to get included in some global viral content. Streaming listeners know how it works. By matching clients' work with similar tracks, the company's playlisting service brings immediate recognition to their signed artists. And, because client success benefits the company, this premium service helps produce a positive feedback loop that further exposes the valuation disconnect in SNWR stock.
Capitalizing On A Shift In Demand
Intercept Music's expansion into streaming and playlisting sets them apart from the competition, but the company isn't limiting itself to digital media. Recognizing a recent resurgence in demand for vinyl records, Intercept Music has also extended its services to include physical recording. Despite the time spent away from the limelight, physical recordings are making a huge comeback – not only do many listeners choose vinyl records over streaming whenever possible, but there is also a growing collector's market for such recordings. By allowing its clients access to physical recording options in the same suite of services that handle their marketing, merchandising, and distribution, Intercept Music is staying true to its mission to be a comprehensive service to labels and independent artists.
Intercept Music's expansions into playlisting and physical recordings have likely played a significant role in increasing its gross sales and per-artist revenue. After all, each new listener is the most valuable asset to a label or artist. Thus, expect a client migration toward the SNWR/Intercept solutions when they are happy. This industry is big on referrals.
Building a Framework to Support Successful Growth
And the company is doing its part to meet new demand. Intercept Music recently tripled the size of its staff roster, including a new full-time marketing manager to oversee their now sizable marketing team. Simultaneously, the company streamlined its processes by outsourcing its PR and Investor Relations services, saving the company unnecessary overhead. Based on its 2021 financial performance, Intercept's strategy is paying off.
This is no coincidence – Intercept Music is focusing on its most essential services, making them the best they can be for their clients and their investors. And with a customer service ticket rate that has dropped by half, the company seems to be successfully freeing up its resources to be hands-on for its clients. This results in higher revenues for the company, but it also cultivates long-lasting relationships with clients. This is important for any firm, but that goes double in an industry like music and entertainment, where loyalty can make or break companies that hit or miss the mark.
Earning such loyalty can be hard to achieve, but it appears that Intercept Music has found the formula. Moreover, they are doing excellent representation work, helping clients earn over 100 Grammy's and numerous other awards and nominations. Expect clients to stick with what's working. Better still, they will likely refer more business.
If that's the case, the SNWR proposition gets even better.
Capturing a Slice of the Burgeoning Market of NFTs
And it should from Intercept Music having its bases covered by providing a suite of services that offers streamlined and effective marketing management and digital and physical distribution and merchandising. That covers the music and entertainment side. They are also targeting another massive revenue-generating market opportunity- Non-Fungible Tokens (NFTs). Over the past several years, NFTs have opened up new sources of income to artists, and it could be the same revenue driver for SNWR.
Although NFTs are a relatively recent market phenomenon, they already comprise a considerable market. In fact, NFT sales to date have exceeded $25 billion. And, amidst the litigious issue of intellectual property ownership in the music industry, Intercept Music has another way of distinguishing itself from the competition and attracting business: its clients maintain 100% ownership of their work. Expect artists to embrace that practice. Moreover, it makes Intercept an even better candidate for artists and labels, especially those dabbling in markets like NFTs.
More good news. Being early to this market brings a tremendous new source of revenue-generating opportunity to Intercept Music and its clients. And, naturally, investors benefit from activity in Sanwire's stock once markets catch on to the new business interest. Success in the NFT sector, by the way, could put 2021 performance on a dose of steroids.
Presenting a Timely Opportunity
All tolled, SNWR is in phenomenal shape to make 2022 its best year ever. And its transformative acquisition of Intercept Music will continue to blaze that path. Moreover, good today, excellent a few months from now after continued investment into building a more substantial infrastructure allows more client representation, and therefore, more revenue dollars hitting the company books.
That could be excellent news in Q1 and all through the year. Moreover, historical growth has set a precedent for why Sanwire presents a compelling opportunity for micro-cap investors wanting exposure to an industry posting all-time high revenues. The future looks appreciably better. If that's the case, companies growing at SNWR's pace typically don't stay at penny-level prices, and that could be the case here.
Thus, the trajectory on a positive update could steepen an already bullish chart. And with more clients, more labels, more revenues, and more efficient processes to maximize income, in addition to its chart steepening, so can its share price. And that would be a sweet tune to investors seizing the opportunity.
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