JPMorgan put out a lengthy research piece this month called “Opportunities in the metaverse”, making the case, basically, that the cost of being left behind by not developing a metaverse strategy would likely become far greater than the risks involved in participating for most businesses and investors.
As noted in the piece, “We are not here to suggest the metaverse, as we know it today, will take over all human interactions, but rather, to explore the many exciting opportunities it presents for consumers and brands alike. Whether it’s large tech players such as Microsoft planning to create realistic workspaces, or Ariana Grande holding a concert in Fortnite, the opportunities presented by interactive, digital worlds seem limitless. The metaverse will likely infiltrate every sector in some way in the coming years, with the market opportunity estimated at over $1 trillion in yearly revenues.
“As a result, we see companies of all shapes and sizes entering the metaverse in different ways, including household names like Walmart, Nike, Gap, Verizon, Hulu, PWC, Adidas, Atari and others. Business leaders and boardrooms around the world are now asking themselves, ‘What is my metaverse strategy? What am I supposed to be doing in the metaverse? What is the metaverse anyway?’”
With that cool trillion up for grabs, investors have started to pile in. The theme even has an ETF: the Roundhill Ball Metaverse ETF (NYSEARCA:METV).
Naturally, all the attention in the financial media and the blogosphere has gone to the usual big cap names, including Roblox Corp. (NYSE:RBLX), NVIDIA Corp. (Nasdaq:NVDA), and Meta Platforms Inc (NASDAQ:FB).
However, far more interesting opportunities could be out there for investors and speculators seeking smaller stocks with more growth potential due to operating thus far on a smaller scale. With that in mind, we take a close look at three stocks below that could be paving a path toward big growth ahead through strategies that capitalize on the emerging metaverse theme.
Matterport Inc. (Nasdaq:MTTR) operates as a spatial data company that focuses on digitizing and indexing the built world. The implications for the transition into the Metaverse should be obvious.
The firm’s products include 3D content platform, pro2 3D camera, 360 cameras, virtual reality, and mobile apps. It serves residential real estate, engineering and construction, travel and hospitality, and commercial real estate sectors.
Matterport Inc. (Nasdaq:MTTR) recently announced that it has appointed Florence Shaffer as Vice President, Strategy & Operations, Chief of Staff to CEO, and Deepti Illa as Vice President, Global Integrated Marketing. Shaffer will join Matterport’s executive leadership team and report to CEO RJ Pittman, helping drive the company’s strategic and operational mandate. Illa brings an impressive record of driving global business growth for some of the world’s largest cloud platforms and will report directly to recently named Chief Marketing Officer, Tom Klein. She will lead global marketing efforts to elevate the Matterport brand and scale adoption across all key vertical markets.
“Achieving our mission to make every space more valuable and accessible, starts and stops with attracting top talent and expanding our workforce across technology, marketing and operations is crucial to our success,” said RJ Pittman, Chief Executive Office of Matterport. “Both Florence and Deepti are highly regarded industry executives that bring extraordinary, team-centric leadership, operational scale, and strategic vision to Matterport. We are incredibly well positioned to extend our leading position digitizing the $230 trillion built world in the decade ahead.”
The stock has suffered a bit of late, with shares of MTTR taking a hit in recent action, down about -24% over the past week.
Matterport Inc. (Nasdaq:MTTR) saw $27.1 million in Q4 revenues, up 15% compared to fourth quarter of 2020. Subscription revenue was $16.5 million, up 32% compared to fourth quarter of 2020. Total subscribers increased to 503,000, up 98% year over year while Spaces Under Management (SUM) grew to 6.7 million, up 54%.
B2Digital Inc (OTC US:BTDG) is a more speculative name, but the company is already pulling in millions on the revenue side and has a very well respected brand in the mixed martial arts domain as basically the most prominent “farm league” to the UFC.
It is also positioning itself as the first mover among combat sports brands to have a serious presence in the metaverse, based on its recent communications, likely providing both virtual MMA training and pay-per-view pro MMA events.
B2Digital Inc (OTC US:BTDG) has also been riding a very impressive growth curve, with MMA Event Revenues up nearly 600%, Ticket Sales up over 750%, and Gym Memberships up nearly 200% on a year-over-year basis for the 9 months ended December 31. The company’s most recent announcement suggests that growth curve could accelerate in the quarters ahead. Yesterday morning, BTDG announced that it has acquired Spartan Fitness in a cash and equity deal to launch the Company’s full expansion into the multi-billion-dollar Jiu Jitsu training marketplace.
“Spartan Fitness has one of the most respected brands in the rapidly growing Jiu Jitsu training space, and Chris Conolley is one of the true leaders of the revolution,” remarked Greg P. Bell, Chairman & CEO of B2 Digital. “This deal is more than the acquisition of a new business. It represents our full commitment to becoming a leadership name in the $2 billion Jiu Jitsu training industry. We are working toward multiple additional acquisitions that will fold into the Spartan brand under the B2Digital umbrella, scaling Spartan into a dominant Jiu Jitsu and MMA training name.”
In fact, in the release, the company noted that the deal for Spartan was completed as of Jan 1, and that including Spartan’s business on the books already doubled B2’s training segment revenues in terms of monthly run rate. But the big news was in the final quote of the release and points to the big growth potential ahead for this company, not even including its move into the Metaverse.
B2Digital Inc (OTC US:BTDG) CEO Bell added, “This is the acquisition we have been discussing over recent months, and it puts B2 in position for significant upside. With an aggressive plan of adding 15 locations to our existing 5 locations, building to a total of 20 locations over the next 36 months, we have the potential to increase our revenue substantially on an accelerated growth curve. With our existing ONE MORE Gym footprint, these additions will put us on a path to control a large footprint of top fitness facilities with credible blue-chip MMA training programs over the next several years. Our plan is to position these new facilities in cities where we have upcoming scheduled B2 Fighting Series events to capitalize on our successful cross marketing strategy. B2Digital believes each new Spartan Fitness facility has the potential to add more than $1 million per year each, or up to $15 to $20 Million in aggregate, in new revenue once all 20 facilities are in place and operating. We believe this puts us on a path to demonstrate exceptional growth over the next two to three years.”
Immersion Corporation (NASDAQ:IMMR) bills itself as the leading innovator of touch feedback technology, also known as haptics. The company invents, accelerates, and scales haptic experiences by providing technology solutions for mobile, automotive, gaming, and consumer electronics.
Haptic technology creates immersive and realistic experiences that enhance digital interactions by engaging users’ sense of touch, which is doubtless a part of realizing the full extent of the Metaverse vision, putting IMMR on the map in this theme on a core level.
Immersion Corporation (NASDAQ:IMMR) most recently posted an article from the company’s chief technology officer, Chris Ulrich. In the article, Ulrich noted, “In Dec. 2019, I hosted and led a lunch discussion at the Pan Pacific Hotel in Seattle as part of the 3rd annual SmartHaptics conference. The topic was ‘how to grow the haptic ecosystem?’ and the attendees included haptics experts from a few large CE companies, some key component suppliers and some key researchers. Although haptics was rapidly becoming a commonly known and understood technology, it was clear to many that some collaborative effort would be required to realize the potential of the technology.”
He went on to conclude, “Since that lunch in 2019, the industry has made substantial progress towards maturing haptics as a media type and allowing it to reach its true creative potential. It is only through the collective effort of many experts and the commitment from their organizations that this has been possible. With the ratification of haptics in ISOBMFF and the reference technology for MPEG, we have successfully executed the first big step, but there is still much to do.”
Recent action has featured lateral rangebound movement near support in the context of a steady decline in share prices. However, IMMR has a history of dramatic rallies. This is particularly important with a float in play that’s relatively small — under 29M shares. As savvy traders are well aware, with such a tight trading float, ramping interest can force a supply-shock squeeze.
Immersion Corporation (NASDAQ:IMMR) is currently trading at a market cap of $160 million and has a significant war chest ($118.6M) of cash on the books, which stands against about $10.7M in total current liabilities. One should also note that debt has been growing over recent quarters. IMMR is pulling in trailing 12-month revenues of $36.3M. However, the company is seeing declines on the top-line on a quarterly y/y basis, with revenues falling at -5.6%.
