Verb Technology (NASDAQ: VERB) stock is up 347%. VERB stock has jumped on the back of a deal announced with TikTok. Some level of integration between the Market.live system and TikTok itself is to happen. Now, quite how valuable this is is a matter for debate. If this means only that people can, if they wish, then use Verb’s products as a creator on TikTok then we’re going to have to see what takeup is like. There are many things and tools that creators can use. If, on the other hand, this is actually being backed or recommended by TikTok as a tool that creators should use then of course the takeup is going to be very much larger. That would be a truly transformative deal.
As to what the system does: “By simulcasting their streams on TikTok, these sellers can tap into TikTok's vast user base while allowing TikTok viewers watching engaging content on TikTok to effortlessly access the products showcased and make purchases without leaving the TikTok app. The checkout process seamlessly flows through TikTok and back to MARKET.live, ensuring a cohesive and secure experience. This collaboration bridges the gap between creative content and seamless social shopping, delivering and capitalizing on the powerful convergence of entertainment and commerce.”
Well, two different things there we think, One is being able to stream onto TikTok, simulcast streams that might appear elsewhere. The other is integrating those sales abilities. Possibly important also is that the Verb Tech tools allow the creator to see what everyone else is selling on TikTok - excellent market intelligence of course.
Verb Technology stock price from Google Finance
Obviously, we here are interested in the stock price reaction more than anything else. And a look at Verb’s accounts tells us one more thing. This VERB stock price jump is likely to be accompanied by some stock issuance.
Last quarter Verb’s revenues were $3000 (yes, three thousand dollars) which was a 98 to 99% decline from last year. Cash looks like it will cover one quarter of burn (ignoring losses from discontinued operations). And that’s before we get to looking at their accounts payable pile. A reasonable way of looking at Verb’s finances is that they’re desperate for more cash - this TikTok play is their big one to settle the company.
Which is fine and maybe the deal with TikTok will sort out Verb’s business plan. But to get from here to there we would insist that they’re going to need more capital. Issuing more stock after a significant stock price rise is a good idea. Both because the price rise shows that people are interested in the stock and also because it makes any particular level of capital raise less dilutive.
Now, obviously, we do not know this. But we feel pretty safe in making the prediction. There will be a Verb Technologies stock issuance, capital raise, in 3…2…1….
