Consumer habits tend to stay relatively static over the short and intermediate terms. they will change and evolve over time. Brick and mortar, or traditional retail, has long been the desired destination for shopping and purchasing everyday items. Despite massive, expensive malls being constructed, and retailers’ heavy use of leverage; consumers have turned their backs on traditional retail, in favor of more online options. Thanks to technology, consumers have shifted their habits to internet-based shopping, which has only continued to see exponential growth.
Traditional retailers are now in full crisis mode, as store closing, layoffs, and bankruptcies are seemingly weekly headlines. In March-April 2017 alone, we’ve seen numerous retail giants like Staples, Inc. (NASDAQ: SPLS), JC Penney & Company, Inc. (NYSE: JCP), Macy’s, Inc. (NYSE: M), Target Corporation (NYSE: TGT), Sears Holdings Corp. (NASDAQ: SHLD), Ralph Lauren Corp. (NYSE: RL), GameStop Corp. (NYSE: GME), and more closing stores.
Even more striking is the fact that around 10 retailers have already filed for bankruptcy in 2017: Payless, Inc. (NYSE: PSS), Goldmans Stores, Gander Mountain, Radioshack (General Wireless Operations), HHGregg, Inc. (OTC Pink: HGGGQ), BCBG Max Azria, Michigan Sporting Goods Distributors, Eastern Outfitters, Wet Seal, and Limited Stores.
This retail carnage has also contributed to around 30,000 job losses. However, restructuring experts say that the retailer pain may only be just beginning.
According to the AlixPartners 2017 Restructuring Experts Survey respondents, the retail sector is the most likely to face distress in the United States, and third likely to face distress globally in 2017.
While high-profile retailers continue to flounder, and the future of their industry is at risk, there may be one company that can help drive people back into the local malls of America: Grey Cloak Tech, Inc. (OTC Pink: GRCK) and its subsidiary, Sharerails, Inc.
Overview: Grey Cloak Tech, Inc. (OTC Pink: GRCK)
Grey Cloak Tech, Inc. (OTC: GRCK) is a Las Vegas-based company that just finalized its acquisition of Sharerails, Inc., which operates a proprietary online-to-offline (O2O) platform, while specializing in secure online digital marketing and advertising through its proprietary program, Fraudlytic.
Sharerails: Search Inventory At Your Local Mall Online
The dying retail industry must innovate and take transformative steps in order to stay in business.
The problem with shopping at your local mall is inventory. The uncertainty forces the consumer to either leave empty handed, or skip the mall all together and shop online.
Sharerails provides a platform that allows merchants at your local mall to display their inventory count online. As consumers are Google searching for their desired product, they will be able to find results from their local mall via Sharerails proprietary software, which will allow the tenant’s inventory at the mall to show up within the top five search results.
The consumer is then able to reserve the product at the local mall, and pick up the product at their convenience. Soon the customer will be able to have the product delivered to them within hours of their purchase from their local mall. In addition, this helps local merchants sell their inventory in the places where consumers are shopping in today’s economy and have foot traffic return to the ailing local malls.
Mall owners are embracing this concept, foot traffic is the key to success of any retail establishment and increasing foot traffic in a must. Simply put the Sharerails platform drives more foot traffic to the mall and drastically helps the malls tenant.
The model is already being implemented at the Shops At South Town mall in Sandy, Utah. The South Town mall is a current user of Sharerails’s O2O technology, which can be viewed at http://southtown.sharerails.com. Normally a malls web site is a limited compilation of splash pages that have basic information such as: store hours, directions, special events, and a directory of tenants. When the mall implements the Sharerails software, the web site turns from one dimensional to three dimensional, adding tens of thousands of additional pages and products and becoming a dynamic e-commerce shopping platform.
In this example, I live in Sandy, Utah and say I want a new dress shirt for work. As I Google search my dress shirt for desired selections, I come across the Shops at South Town mall website, powered by Sharerails, and find out that my local mall carries the exact dress shirt and size that I need. My next move is to purchase the item on the local mall website and pick it up, it’s just that simple. The mall owners sign up their tenants and Sharerails drives the traffic back to mall.
Major retailers like Best Buy Co., Inc. (NYSE: BBY) are already using the O2O model successfully, but until now, the shops in the major malls have not adopted the technology.
The dying retail industry must innovate and take transformative steps to stay in business, and Sharerails is ready to deliver.
Digital Ad Fraud Likely To Cost $7.2 Billion in 2016
Digital Ad Fraud Likely To Cost $7.2 Billion in 2016
As digital advertising continues to increase in popularity, fraud has found its way in. Digital ad fraud is a massive problem that is costing advertisers $7-8 billion each year in the United States alone. While online ad fraud may come in many different forms, the main culprits are the black-hat “bots” in the form of “non-human” internet traffic to generate advertising dollars.
As internet advertising is based on a pay-per-click model, as your ad generates more impressions and clicks, this utilizes resources in the form of your ad budget which would otherwise be spent on human eyes rather than black-hat bots. Website owners utilize these bots to generate more clicks on merchant adds within their website, illegally capturing the cost per impression and click.
As the problem continues to grow, more advertisers are turning to companies to verify that the digital ad traffic is coming from a living person, rather than a robot or code.
Grey Cloak Tech, Inc. (OTC Pink: GRCK) provides the needed software to solve the digital ad fraud crisis. Using the company’s proprietary ad fraud detection software, Fraudlytic, advertisers more than ever before, able to protect from cookie fraud, impression fraud, URL masking, click fraud, GEO location, and IP spoofing.
Grey Cloak, Tech. Inc., (OTC Pink: GRCK), will not just notify the advertiser about the activity, but can also block fraudulent clicks and activities as they are occurring. Further, the company can run diagnostics on past PPC campaigns, to help get advertisers their money back from fraudulent activities.
GRCK: Financial and Industry Analysis
Turning to financial analysis, Grey Cloak Tech, Inc. (OTC Pink: GRCK) has a market cap valuation of $2 million, as of March 2017. With the closing of the Sharerails transaction, GRCK will add $6,4000,000 in assets. Furthermore, the digital fraud detection company has a share structure consisting of 75 million authorized shares, and 16.66 million shares outstanding, as of September 2016. During Grey Cloak Tech, Inc. (OTC Pink: GRCK)’s most recent quarter, which ended on September 30, 2016, the company reported total revenue of $42,000, and a net loss of $301,000. In addition, Grey Cloak Tech, Inc. (OTC Pink: GRCK) listed total assets at $134,000 and total liabilities of $449,000.
As previously mentioned, Grey Cloak Tech, Inc. (OTC Pink: GRCK) recently announced the completion of its Sharerails acquisition, which was first announced back in September 2016. Sharerails carries a valuation of $6.4 million dollars and revenue forecasts of $1.7 million in 2017 and $6.7 million in 2018. The valuation was calculated and confirmed by Excel Management Systems, a business valuation firm.
The acquisition is a key driver for long-term growth, as Sharerails, Inc. continues to be one of the few lifelines that the retail industry can utilize to help drive traffic back to brick and mortar shopping. The current state of retail shows us that the industry is in serious distress, as digital shopping continues to dominate and take market share. Not to mention, Grey Cloak Tech, Inc. (OTC Pink: GRCK)’s core business continues to see strength and could likely see an increase in revenue growth once Sharerails is fully integrated. Here is are five companies that have somewhat similar operations to Grey Cloak Tech, Inc. (OTC Pink: GRCK) and could be used to find a fair value for the company:
Moxian, Inc. (NASDAQ: MOXC): Shenzhen, China-based, Moxian, Inc., operates an online-to-offline (O2O) loyalty rewards platform. The company partners local merchants to gain information on their latest events, promotions, etc. Users are able to play games and win prizes from the sponsoring local merchant. In addition, the platform creates a virtual mall, which allows users to shop with virtual currencies. The company has offices in China, Hong Kong, and Malaysia and is focused on growth within the Asian markets. As of March 2017, Moxian, Inc. has a market cap of $200.35 million, 67.01 million shares outstanding, and a float consisting of 11.37 million shares. During the latest quarter, ending on December 31, 2016, Moxian, Inc. reported revenue of $9,968, but a net loss of $2.8 million.
comScore, Inc. (OTC Pink: SCOR): The company is engaged in digital measurement, audience demographics, consumer behavior, and fraudulent traffic detection. As of March 2017, comScore, Inc. has a market cap valuation of $823.5 million and shares outstanding of 38.95 million. The company is very delinquent on reporting earnings, as the last known quarterly results are from December 2015. During the fourth quarter of 2015, comScore, Inc. reported total revenue of $97.67 million on net income of $4.39 million. However, every quarter since, the company has filed NT 10-Q forms, which indicate late filings.
Baidu, Inc. (NASDAQ: BIDU): The Chinese version of Alphabet, Inc. (NASDAQ: GOOG) has a broad digital footprint that includes internet search, maps, documents, digital wallet, video, images, news, and much more. Over the past nearly two years, Baidu, Inc. has begun to shift its long-term strategy to online-to-offline (O2O) transactions. The Chinese technology company hopes to become one of the largest O2O across Asia. Turning to the financials, Baidu, Inc. has a market cap of $60 billion, shares outstanding of 347.27 million and a float consisting of 275.48 million shares, as of March 2017. During the fourth quarter 2016, the company reported total revenue of CNY 18.21 billion and net income of CNY 4.13 billion.
Amazon.com, Inc. (NASDAQ: AMZN): The major player behind the fall of brick and mortar retail has been Amazon.com, Inc., which has revolutionized consumer habits. In 2017, traditional retail is in full-blown crisis as store closures and bankruptcies are seemingly daily news. If malls and brick and mortar ever have a chance to rise from the dead, they will have to focus on digital-first approach using a Sharerails-type technology. Meanwhile, Amazon.com, Inc. continues to expand outside of ecommerce and dominate in various other industries. As of March 2017, Amazon.com, Inc. has a market cap consisting of $406.51 billion, shares outstanding of 477.17 million, and a float consisting of 395.84 million shares. During the fourth quarter 2017, Amazon.com, Inc. reported total revenue of $43.74 billion and net income of $749 million.
Microsoft Corporation (NASDAQ: MSFT): The technology conglomerate is long known for its Windows operating system and office programs. However, as the company launches big initiative into cloud computing, the company’s Internet Explorer browser was named the highest ad fraud rate, according to a private study by FraudLogix. Taking 135 million individual online ad impressions, across the period of a week, the company found 50% of Internet Explorer impressions came from “non-human” traffic. This comes despite the fact that Microsoft has stepped up digital ad fraud detection efforts over the past several years. Microsoft Corporation has a market cap of $501.75 billion, 7.73 billion shares outstanding, and a float consisting of 7.55 billion shares, as of March 2017.
Overall, Grey Cloak Tech, Inc. (OTC Pink: GRCK) focuses on two major issues that are plaguing business today: collapse of traditional retail and rampant digital advertising fraud. Both of these issues could have a profound negative impact on the overall U.S. economy, if not solved. However, with ShareRails, traditional retailers and malls will be able to reach out to their local populations, when consumers are searching for goods and products online. This helps revive mall foot traffic, keeps local merchants running, and retail jobs in place. As with digital ad fraud, Grey Cloak Tech, Inc. (OTC Pink: GRCK)’s Fraudlytics will help digital advertisers with maximizing their ad budgets and ensure that real people are interested in their business, rather than criminals just looking to steal money. Not to mention, given the vast valuation that is assigned to Moxian, Inc., Grey Cloak Tech, Inc. (OTC Pink: GRCK) appears to have quite the upside potential over the long-term.