New Market Maker on Tap

You probably have noticed a new Market Maker ID on the bid LAFC. This is a newer MM out of New York where several funds and potential large clients who have expressed interest in Socialwise. Again a great sign, because they are picking up an awful lot of shares. Heres the PR....

Apr 21, 2009 08:30 ET

R.F. Lafferty & Co. Inc. Launches Market Making Division

Veteran Market Making Team Hired as Part of the Firm's Continued Expansion

http://www.rflafferty.com

NEW YORK, NY--(Marketwire - April 21, 2009) - R.F. Lafferty & Co. Inc. today announced that it has launched a new division dedicated to market making. The new division will specialize in providing broker-dealers, institutions and existing clients with increased liquidity and order handling capabilities. This new service further extends the scope of R.F Lafferty's robust platform, which is continually being built out as part of the company's ongoing growth strategy.

The new division will be led by four seasoned market making veterans, formerly of Westminster Securities Corporation, who collectively bring over 60 years of experience to the firm. Kevin Malone, John O'Connor, Matthew Palmer and Ezra Grayman will lead the new market making division along with Jeffrey McLaughlin who brings his retail and institutional business expertise to the firm.

"Market Making has become an important space as clients seek more transparency in the current economic environment. Our commitment to expanding the firm's suite of services will prove to be an added benefit for our clients," said Robert Hackel, Chief Operating Officer at R.F. Lafferty & Co. "We continue to proactively identify and recruit the industry's best talent and most experienced teams, and we are pleased to have attracted Kevin, John, Matt, Ezra and Jeff as they will be instrumental to the success of the firm's new market making division."

About R.F. Lafferty & Co., Inc.

Founded in 1946, R.F. Lafferty & Co. is a leading boutique securities firm and investment adviser providing clients with a wide range of services including financial advisory, retail and institutional brokerage, asset management and investment banking services. Headquartered in New York, the firm specializes in serving small and mid-sized companies and investors. For more information, please go to www.rflafferty.com.

Strong Volume Day

Just as I predicted a few days back with the increase in volume, theres definitely something going on with the buying coming in. I continue to believe we will see an increase. Once the selling is cleaned up we should see a pop into at least the low .80's maybe we even break $1 in the short term. Bid support continues to increase and hold despite the heavy selling.

FYI, I can tell you where the selling IS NOT coming from, and that is the insiders.

Keep an eye out.

Let me know if you have any questions.

Revised look at BMP - Bill My Parents

Bill My Parents- New Investor Media link

I have to tell you the first time I heard the idea back in June, IDAE was pursuing its other business plan simultaneously called Bill My Parents, I knew it was a home run. Jim Collas calls Teen, Tween credit/debit cards and payment systems the next frontier, just like cell phones for kids 10 years ago, and I must agree.

Like one financial guru once said "If you want to be extremely wealthy, all you need to do is find out where everyone is heading and get their first" IDAE is doing just that, putting themselves in a position to be first to market with a viable teen payment system.

Currently, Socialwise has focused the majority of their resources to Bill My Parents (BMP) because the management believes the BMP platform has a higher ceiling and marketability.

With a little research, its easy to see why.

Whats Bill My Parents?
BMP simply will allow a parent(s) to verify and approve/ disapprove a transaction of an item their kid(s) have requested. The next phase will include a debit card for kids that gives parents an enormous amount of control, and keeps it simple and convenient.

The first priority will be building an online store using a top retailer like Amazon to sell top selling products and offering the BMP platform as a payment option. This is perfect, since they will not need to try and find top sellers, or stock items, just use the retailer to promote their BMP product! Then BMP will get a cut of the sale, around 10%.


Lets break down the market.

First off parents are far more likely to buy non essential items for their kids then themselves, even if it means sacrificing their own desires. This is true even in a down market.

Lets look at one area of focus for the BMP product: video games, a multi, multi billion dollar industry.

Think about marketing a video game. Currently the video game companies need to try to target a small group in their advertising approach. Generally they cannot advertise to parents, since parents really dont always know which games their kids like. So what they stick with is marketing to late teens to early thirties to capture the market that will respond to the ad and have money to buy the product. This is their main market. Of course younger groups will see an advertisement and bug their parents till their parents buy it for them, but this is only a bonus.

You must note, some of these games, and gaming systems will sell out in hours or days. We are talking MILLIONS of copies at $30-$60 each (not including gaming systems and controllers which can easily hit $400 or more)

So what if a gaming company could advertise directly to the 10-18 yr. old group? Basically BMP solves this problem for every company in this situation. They can market right to the younger kids and advertise "Buy this now with BMP". With the excitement about this market, IDAE has secured lots of discounted ads. This is a nice first step.

Now lets put this into revenue terms, since really thats all we care about.

From the numbers that have been thrown out there, the big target for payment systems is 3 Million users. This is using other companies who have been acquired. With the BMP application alone, this could translate into about $900,000,000 in acquisition value alone, or better yet $18+ per share. (this does not include Ideaedge's social gifting platform only BMP)

How realistic is 3MM users?

With the marketing plan using the social networking platform, typically a “hot” application can reach over a million users in days. With the top applications reaching tens of millions in weeks. I think 3MM users through social networking and other ads in a reasonable time is VERY realistic. In fact, as great as this application is, I believe 3 Million is a very small number to the overall market. These are not hopeful numbers, but very realistic.

Now the other part of the BMP plan.

Bill my Parents Debit card:

Personally I think this is the golden Egg. The crème de la crème of the youth payment systems. A way to give your kid money, without giving them your card (Got your attention now?) Imagine loading your kids card with $200 and being able to:

- block undesirable merchants

- specify a safe merchant list that they can use,

- limit amounts at any merchant,

- monitor the card

- …oh and FREEZE (or unfreeze) the account at anytime with a simple text message or email. (When your kid gets grounded, why should they have the ability to spend money?)

Now add being able to simply add amounts to the debit card and parents have full control. These cards can be used anywhere MasterCard is used. Imagine the possibilities. I think this is where the company is headed for the long term. This in fact is a viable payment system for young people.

As far as numbers and profit, The market figures value at $1000 per user is reasonable for payment systems. So this means in terms of acquisition, 1MM debit card users would value that part of the business at 1 Billion. As far as profit, I haven’t been able to find any solid numbers, but you figure someone charging $1000 a year on average would be reasonable. (Note: this can be used for all a child’s purchases over a year, from school clothes and supplies, to gifts for friends and family). Credit card companies charge merchants anywhere from 1.5%-3%+ for transactions, so I would think realistic revenue from that would be anywhere from 0.5%-1%.

5 Million users = $250,000,000 - $500,000,000

10 Million users = $500,000,000- $1 Billion

I don’t see why the profit wouldn’t be at least 20% maybe higher given the outsourcing that Socialwise has (I think they are figuring at least that). If thats the case we are talking profit in the $50MM to $200MM plus range.

Compare just this one small part (the Debit card) of Socialwise to "Heartland Payment Systems"

Heartland does 85MM in EBITDA and still holds a market cap of over $300MM! (thats after a 50% decline in the last 8 weeks.)

Alone if the Socialwise Debit card achieved the numbers above and translated into a value of 350MM in market cap, that would spell out over $7 a share.

Are you beginning to see the big picture?

Now add that to the BMP platform (not to mention social gifting) and the numbers are staggering. This is a legitimate multi billion dollar company.

I think what is really exciting is this is just one business plan of IdeaEdge's that they are executing, and does not include social gifting which I already hit on earlier. Combined there is no reason in my mind they wont be able to rival a payment system such as Paypal.

Feel free to comment and ask questions.

Check out the site
Bill my Parents

Storm is Brewing for Socialwise

I dont know if any of you have noticed, but something is happening. If you look at the daily share volume over the last couple weeks, you will notice a dramatic increase. That means a group or individuals are accumulating at these prices.

Why this is important, EVEN if the share price hasnt increased, is this is absorbing all the shares out there that have been on the market....prepping the stock for a major run. Etrade was on the ask for awhile along with several others, whom have disappeared. What you must realize is there is very few shares out there in the float that are not in long holders hands. My guess is around 1.5MM. That is still probably less than $1MM in stock that is even available (while price increasing during a buy)! All for a company that has greatly increased in value over the last 6 months.

This tells us we have in fact found bottom....only up from here! Im just jealous of the people that have been picking up shares at these prices!! ;-)

Let me know if you have any questions.

Holding Ground

Not a whole lot of action lately.
Now that the markets are beginning to settle, people will begin to look for places to put their money. Being more careful on the OTCBB market will limit their choices. However once Socialwise reveals their BMP platform a lot of investors should quickly come aboard. I am pretty confident that once the move starts, it will happen quick.

How Socialwise is Different than the typical smallcap

Lets face it, the share price isnt exciting, but disappointing. So why is the stock here? Is it the shareholders? Is it the market environment? Is it the company? These questions are normal. Everyone wants answers when they believe in something thats not going well. Investors are notoriously short (term) minded. This group is different. Many are still excited.

There is a reason why so many involved are so excited. Every time I see Jim Collas, and the rest of the management, they are extremely inspired. They dont worry about the current price, because they know what they have!

Why is Socialwise so different? Thats a great question. First lets eliminate what Socialwise (IDAE) is not:

1)A PUMP and DUMP
Clearly if this was a pump and dump, we would be sitting a lot lower than .40. However, I prefer facts. Fact: the stock float has not even doubled from its extremely low 3.9MM shares in over 12 months. Fact: No new shares are being dumped and/ or sold off in large unaccounted for numbers. Fact: The original IR firms are still with the company. Fact: its at .40, when it could easily be at .01

2)HYPE- A pipe dream of success.
Small cap companies usually fall in these first two catagories. Sure a company may have a great idea, but no real solid plan to execute. Its usually the "if" we get just one major player to "buy (sign, partner, etc), then the company wont look back.... it happens only once in a thousand (or less). Others have a great plan/product but lack leadership to see it through. This represents probably over 95% of small caps, and why, unless you know what your doing, you shouldnt invest in small caps.

3)No WAY of maintaining a market-
Sure you can have all the right ingredients above but lack the one real thing....a viable way sustain a market and longevity. This is usually due to outside forces.

I want to talk about #3. This is where Socialwise is VERY different. Sure it has the potential to make it as a multi billion dollar company with a leadership team that you find in Mid caps ,if your lucky, but thats not what I want to focus on. Many companies have potential, but never do make it.

So what usually destroys small caps that has done everything right? (as in great product, excellent planning, a strong management team, working capitol and keeping the share structure tight). It can be things we dont see coming.

Lets start with the short list (if you think of more please let me know):

Private Funding- The torpedo that has sunk many great small companies. Bringing in start up money that turns toxic. Whether its a convertible note that allows the shares to dramatically increase if the share price dips, or a investor that cuts his/her losses at anytime they feel threatened and put the stock in a situation that it cannot recover. Socialwise doesnt have any of these. So far the investors have remained very solid.

Bureaucracy- This has destroyed many a start up. When your product or company is strong enough to put a dent in major industries they are typically squashed. A billion dollar company finds it in its best interest to take care of problems before they get big. Put enough pressure and they can easilly shut down a small cap thats running on a shoestring budget. Some great new start ups have burned millions while the bureaucracy machine pressed them. No this isnt conspiracy, it really does happen.

Ideaedge (Socialwise) is in a industry that doesnt have (much) bureaucracy. In fact the field is wide open when it comes to payment systems. The industry is actually hungry for new ones. This is why we had the tech boom....it was a new industry without the Bureaucracy and many new great products, ideas and intellectual properties.

Competition- A great idea thats not kept quiet by a small company can quickly invite major player to execute it before the small company realizes what hit them.
Heres the deal,Socialwise owns the patent to their two intellectual properties. Who can compete with them? Not many. They kept everything so quiet that they are going to be first to market, no matter who tries to beat them. Since they have so many relationships formed with many major players, they actually are too far ahead of anyone who would try to compete to make it worth while. You want to be first to market to have a name recognition. For this reason alone this is most exciting. This also invites the mergers and acquisition talk by a major player once you show your company profits are growing and promising to be very big.

This company is unique. I hope you understand the position that we are in. Not only is everything lining up, but we also have a strong shareholder base. This will help the stock stay strong once the company begins to make its numbers and is profitable.

I dont see any reason to doubt. In fact its a great time to add. You will be glad you did later.