Crowdgather (CRWG) Shares Rise 93.80% in One Day

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Exciting headline but today shares hit an all time low of 2.4 cents. This is the week after the announcement of a revamp of a couple of their sites. *yawn*

Today, a single deal of 395,500 shares were traded at 2.4 cents each. That is a whopping $9,492 and I bet someone made a heck of a loss on these. The day ended with 10,000 shares being sold at 5 cents a share ($500).

The chart can be viewed here.

I await the Annual Report within the next few weeks with interest. I really doubt it will say much different from previous ones but at least there should be some figures to analyze.

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This could have meaning, or it could just be a little spike that happened to occur at the end of the day.

We do know that share prices have fallen in a big way since most of us first heard of the company. During that time, there've been some spikes, but they've been temporary.

We also know that Crowdgather is worth about $2 million (based on average stock prices of late) and that they consistently lose $700,000–800,000 every three months. We also know that as of the end of January, the company had $489,073 cash on hand and that the quarterly report issued in March stated:

At our current annualized operating expense level of approximately $4.0 million, we estimate that our cash on hand will not be sufficient for us to continue our current operations for the next twelve months and we will need additional cash to expand our operations.…

If adequate funds are not available, we may be required to delay, scale back or eliminate portions of our operations or obtain funds through arrangements with strategic partners or others that may require us to relinquish rights to certain of our assets. Accordingly, the inability to obtain such financing could result in a significant loss of ownership and/or control of our assets and could also adversely affect our ability to fund our continued operations and our expansion efforts.

It'll be interesting to see what the company's next financial reports have to say.

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Hold the line; it happened because the Aussie $ dipped again. :evil

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It's actually sitting at nine cents right now. Over this last week, it almost doubled again. The biggest transaction in the previous month (July 15th 2013) was 939,300 shares at 8 cents, making the transaction worth $75,144. In fact, this is the biggest transaction in the last 2 years!

Still no sign of the financials yet.

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You missed a decimal place. The transaction would have been worth $75,144. :)

I wonder who bought the shares. In the past, lot of shares have been bought and sold by people who have top level positions at the company.

Also, in the past, there've been several instances of pump and dump. One time, the price of the stock was artificially inflated by a brochure suggesting that Microsoft and Google were potential buyers of the company. Company executives sold their own stock at the inflated prices (thus lining their pockets), then bought the stock back once the price fell.

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Corrected, thanks! :)

It seems to me that there is something going on that we do not know about. It makes sense for investors to hold on to their stock, while the value is so low. I hate to think what they initially paid for it.

I'm sure something will become evident in the near future.

Interesting mention of a buy-out. To me, this is the most realistic reason for interest. Otherwise, I think people are fairly tired of the hype and see it for what it is.

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I think a buyout is possible, but certainly not by Google or Microsoft.

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On July 16, 2013, pursuant to the Securities Purchase Agreement dated April 8, 2013 ("Purchase Agreement") between CrowdGather, Inc. (the "Registrant") and a foreign investor (the "Investor"), the Registrant sold 150,000 shares ("Shares") of Series B Convertible Preferred Stock ("Preferred Stock") and common stock purchase warrants (the "Warrants") in exchange for proceeds of $150,000, or $1.00 per share of Preferred Stock. With this sale of Preferred Stock, the Registrant has received $450,000 of the initial $600,000 commitment from the Investor and retains the right to sell up to $1,000,000 of Preferred Stock pursuant to the Purchase Agreement.

more

That should keep things ticking over for another month or two.

This transaction was slightly delayed and could be a factor in why the Annual Report is delayed.

The next few days should be interesting.

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I haven't had a chance to read it, but here's Crowdgather's annual report:

http://biz.yahoo.com/e/130724/crwg10-k.html

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I had a reasonable look at that a few days ago. Thanks for posting the link.

Almost as soon at that was released, the share price dropped and has continued to do so.

It looks as if operations can continue into early next year, which is about what I would have expected. There are a lot of things that could go wrong though!

There is mention of contingencies, e.g. selling assets (mostly these are domain names).

It's a long read - some of it quite scarey - and also fairly honest.

What I have been unable to figure out is what appears to be contradicting mention of Adisn. I'm working purely from memory here but I think there was mention of the Adisn business model being dropped and yet there is still mention of implementing it on the CrowdGather platforms. I know that is quite open to many possibilities but I really struggle to figure out where things are at there. There is all the hype, there are deadlines set, deadlines pass, mention of beta, mention of implementing. It's really quite difficult to tell!

Yes, there was mention of making staff redundant as part of the cost savings.

I really think that apart from one Hong Kong investor, there is not much confidence that CrowdGather can or will deliver.

In the meantime, efforts are being focused on migrating users from lesser platforms to yuku and making the yuku platform sustainable. Unmonetizable content will continue to be purged. No more platforms or boards will be purchased (they cannot afford to now). The hope is that organic growth will build pageviews. In part, this will happen, due to the migrations. Overall, I would think it would drop, just as the general trend is with message board platforms.

Time will tell.

I only hope for the sake of the members that something serious does not go wrong and the plug does not have to be pulled.

So far as a sale or a takeover are concerned, I really cannot see a whole lot of interest. I'm not saying that it is that bad here, I just think it is too small and too much of a burden and risk for anyone that may be in a position to either purchase or merge.

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I may be reading too much into the last few posts, but the general tone seems somewhat "ominous" for yuku to me ~ for a number of years post-MSN groups, yuku was a great decision for us ... even with the regular turmoil ~ but it sounds like going independent was an even better decision for us ~ we just passed our 1 year anniversary being independent ~ and I send mega thanks and hugs to those [you know who you are] who "showed us the way" ~

Sooz

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Prior to the last few months, I have been concerned that someone launches a major law suit against CrowdGather/yuku as I knew that could wipe them out.

The cash hemorrhaging situation has been improved a whole lot and new purchases were stopped. At least one member of staff was "let go" earlier this year.

My more recent concerns are the DDoS attacks that yuku (are there more?) has been subjected to. The result is either staff time spent or cash spent. Have a look at this page. There are some charts lower down the page, which show results and costs involved. Right now, yuku is suffering the "Loss of Revenue and Brand Tarnishment" scenario. To avoid that, money does need to be spent in one way or another. I have no clue what bandwidth is necessary for the network but you can be sure that however much it is that it can be overcome by an increased DDoS attack. There is at least some indication of costs there. It adds up!

The thing that irks me is that yuku (and ezBoard before it) will always have suffered DDoS attacks & cracking attempts. Measures were put in place many, many years ago, as well as some more recent additions, of which a beneficial side-affect would have been DDoS mitigation. These no longer seem to be there!

I won't ramble on much further but suffice to say that I fear DDoS mitigation - in whatever way it is handled - could most certainly be a nail in the coffin.

The full filing is here. It's the sort of stuff your brain is very used to but there is a heck of a lot to read!

You mentioned your move to yuku. Around that time, yuku transferred hands for around $11M. Around the time you left yuku, it transferred hands for around $500k. That's a heck of a drop in market value!

OK, CrowdGather think they can turn that around. While they may know a lot about their field, I think they are overlooking some fundamentals and I won't detail these right now as it will take up a lot of this post and go off-topic even more.

The big Companies you see apparently succeeding are not solely reliant on advertising for income; they sell your data to others. A smaller competitor that appears to be succeeding is charging by size and has no ads.

Yuku has a lot of features and has the potential to be quite desirable but there are features missing, which would make the platform even more desirable to desirable content generators. One example would be the ability to upload, store and link to document files.

This competitor also allows you to export your Members as well as export your content. In fact, it makes it very clear that your content is yours (period!).

Of course, many would not like the pricing but the pricing is very realistic.

Now, have a look at Google's Ad limit per page. Now go and have a look at a yuku board with ads on it. There is a very good reason for these limits and that is because they are the maximum number of ads that are effective!

Increasing ads per page may be a shot in the arm but it is no long term solution.

Before I left yuku, I did forward a number of suggestions. These included:
  • Introduce charging by the feature.
  • Add an import/export feature (which could be chargeable).

As hinted at above, ads do not cover the cost of providing the service any longer. Once upon a time they did. The cost of ad removal also does not cover the cost of providing the service; in fact it is worse than the revenue from ads.

"Going independent" as you did gives your members peace of mind that their data is not being sold. It also gives them an ad-free experience. Not only that, because you are not loading the pages with trackers and ads, it means the pages load much faster for them. Your data is regularly backed up off-site and will never be lost. Of course, this is not for everyone as certain skills are required and it does have a cost. That cost is easily covered if Members donate a few dollars here or there, no matter what the size of the board is.

Now, right back on topic ... In another sense, this is how things have always been, even way back to the ezBoard days. In those days, we did not get to see as much as the information was not as publicly accessible. Stats have always been "flawed" and there have been numerous "tight" times but somehow it has always come through. Maybe this will continue ... and maybe it won't. Times are very different now.

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Crash and burn gets closer. Summary SEC form 10-Q, Quarterly Report

I do take positives here. It is clear that realization has dawned and their business model unlikely to succeed. This admission, enables CRWG to seek an alternative. I also see that contingencies are being considered.

The "advertizing machine" as I think of and refer to appears to have been defined:
advertising and user generated content network

Pruning non-monetizable content continues.

I do wonder what "eliminating non-critical services" means.

I must admit that I have been wondering when things like Pop-under adverts and other undesirable methods of delivery. Perhaps CRWG may not stoop so low?

There are certainly issues with cramming more than 3 ads to a page and this may be a factor in their reduced revenue.

This is the first mention I have heard of "retain [and grow] our online user base". They sure have not made a very good job of that! Have things changed or does the word "retain" really mean "restrain"?

The way I see that, it is quite simple: make a good product and people will not only stay and more will join them.

If the product gets bad, let them leave. Help them even. Charge them for the help too, if you want. In that way, these people may return, if the product improves again.

Hijacking content and boards as well as removing them and banning members is sure not the way to encourage people to return. All they did was leave because of a poor product!

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Just a quick update on this topic as it is a year end.

Shares in 2013 varied between a high of 11 cents and a low of 2 cents. Currently it is at 6 cents and likely to drop more through January.

It's been a while since any serious "pump" has been seen but it does look like there is some small scale attempts at manipulation going on. No telling who is responsible.

From memory, the cash should be beginning to dry up very soon, so expect some news within the next 3 months or so.

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Seeing as there has been some recent interest in this topic:
CEO Sanjay Sabnani purchased a total of 166,500 shares on the open market at prices ranging from $0.06 to $0.074 per share between December 18 and December 31, 2013. The total dollar value of the transactions totaled more than $10,500 and brought his total stake to approximately 18 million shares, or nearly 30% of the company. Director James Sacks also purchased 50,000 shares at $0.065 a piece on January 14, 2013, according to a subsequent Form 4 filing with the SEC.
Source.

The market reaction is "meh!". Shares have sat around the 6 cents mark.

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Here's the most recent quarterly report, dated 31 October 2013:

http://globaldocuments.morningstar.com/ ... ancialstmt

It's basically a rerun of the last several reports.

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On March 16, 2014, we entered into a web site purchase agreement to sell certain online forums and related website assets for $570,000 to an unrelated third party. The closing of the purchase agreement is subject to certain terms and conditions and is expected to close in our current fourth quarter of fiscal 2014. The cash anticipated to be received as part of the closing of the purchase agreement will help sustain our operations into the foreseeable future.
Form 10-Q for CROWDGATHER, INC.

There was the necessary quick shot in the arm. To the best of my knowledge, this is the first time that CRWG has actually sold a forum. Of course, I am now curious which one it was. Time will tell!

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This is a subject that always totally confuses me, but Crowdgather typically loses about a quarter of a million dollars every three months. At first glance, it looks like their losses were about half that amount this quarter.

Based on that, I'd surmise that this infusion of cash would buy them three months, and possibly a bit more. However, with fewer forums, their earning potential decreases; it'll be interesting to see if that factors in.

This comes immediately after what was quoted in the post above:

However, the period for which our existing financial resources as well as the financial resources necessary to support our operations and launch of our marketplace involves risks and uncertainties and actual results could differ as a result of a number of factors including our assumptions for increasing revenues through the monetization of our forum advertising marketplace and existing ad inventory, anticipated efficiencies gained from the completion of ongoing automation and technical initiatives and anticipated further cost reductions.

It sounds like the company is still anticipating increased ad revenues, and so far, that hasn't worked out. Along with that, they now have fewer forums to generate ads.

It'll be interesting to see which forums disappear. :)

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The disclaimer is fairly standard practice of recent. The business model is based on serving targeted adverts so, unless they change their business model, they really have to carry on along those lines. The concept is still carrying some weight with some people, so there is some potential gain from doing so. However, as you also say they fail to deliver (timeously) and this does tarnish any reputation they may have.

Advertising has decreased in revenue over recent years at approximately 10% per annum. There has been a great increase too over these years of mobile devices. 4G technology is being rolled out. Mobile Internet charges are higher than traditional land-based ones. Some forms of mobile Internet may be slow.

Just as people on dial-up learned, removing ads from pages increased their available bandwidth and reduced their overall consumption, so will these mobile Internet users. AdBlockers for Android and iOS are freely available and easy to install.

IMHO, there is only one way for CRWG to succeed and that is to change their business model. They also need to address the slowness of their sites (being slower than 75% of sites). The average number of pageviews and average time on site has nearly halved over the last couple of years. The bounce rate is much about the same though (a reasonable 30%). This suggests to me that people are disenchanted and not being engaged.

Say for example, the ezboard.com domain was revived and exactly that placed on it: an Easy Board. The product is very simple and that is a fast and very basic message board. If more features are required, they can be purchased as addons. No different really from how ezBoard becme in its later days.

The database is essentially the yuku database, with a different code-base in front of it. Members can post anywhere on the network with a single login.

Boards can then be transferred on demand between platforms, for a fee. This is practically free money made from people changing their minds and allowing them to do so!

Another area that can be exploited for income is the import/export of data. Many forum hosts will import forums and it really is to their advantage to do so. Most of the work has been done and the process just needs automated and charged for.

People fear for the safety of their data. The would feel much more secure having their own copy of their data and being able to restore it if required. True, some also want to leave. Automating and charging for a dump is a way to make money. Consider the paranoid? Just how often would they part with (say $20), just for a backup? Heck, why not make it $20 plus $1 per MB?

I'm not saying get rid of the concept of advertising to provide revenue, I am saying find ways to supplement the revenue, which give people choices. If people find they need and want private forums, offer them but also charge for them. I am sure private boards are not exactly bringing in a lot of ad revenue, why not charge to restrict viewing of boards?

The advantage is that people can see what they are paying for. It doesn't "feel" so much if they pay x for ad removal, y for private forums and z for a backup.

The other thing not being exploited are bulk discounts. There is no incentive for people to pay for a year's worth at a time or even three years. There is actually a loss to CRWG if the choice is to pay on a daily or weekly basis. You go into the store and you see "buy three for the price of two", what do you do (assuming you want it)?

In summary, cut back to fast and basic, then charge for features, adding even more that people are really likely to use with minimal maintenance and overhead. This also lets people see how these additional features can slow their board. Again, a choice for them. Make money by giving people choices.

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VerticalScope Inc. bought the following domains on 16th March 2014:
    Motorcycleforum.com
    NgEmu.com
    Pcsx.net
    Emuforums.com
    Psxemu.com
    PocketBikePlanet.com
    PersonalityCafe.com
    Personalitycafe.net
    Personalitycafe.org
    Personalitycafe.info
    16typequiz.com
    Enneagramquiz.com
    Cognitivequiz.com
    Myersly.com
    AquaticPlantCentral.com
    ClubXB.com
The purchase price payable by Buyer to Seller Five Hundred Seventy Thousand US Dollars (USD $570,000) (the “Purchase Price”), after a successful transfer of the Domain Names and Web Sites to Buyer pursuant to the transition and migration process set forth in Article 6, consists of Three Hundred Eighty One Thousand Nine Hundred US Dollars (USD $381,900) for purchase of the Domain Name and goodwill, and One Hundred Eighty Eight Thousand One Hundred US Dollars (USD $188,100) for purchase of the Web Site Content.
Source

VerticalScope Inc. bought the following domains on 27th April 2014:
    pbnation.com
    pbnation.net
    pbnation.biz
    pbnation.bz
    pbnation.mobi
    pbnation.name
    pbnation.name
    pbnation.org
    pbnation.tv
    pbnation.us
    paintballnation.com
    paintballnation.biz
    paintballnation.co
    paintballnation.info
    paintballnation.org
The purchase price payable by Buyer to Seller One Million Three Hundred Eight Thousand US Dollars (USD $1,380,000) (the “ Purchase Price ”), after a successful transfer of the Domain Names and Web Site(s) to Buyer pursuant to the transition and migration process set forth in Article 6, consists of Eight Hundred Ninety Seven Thousand US Dollars (USD $897,000) for purchase of the Domain Name and goodwill, and Four Hundred Eighty Three Thousand US Dollars (USD $483,000) for purchase of the Web Site Content.
Source

Crowdgather enters a merger agreement with Plaor on the 5th of May 2014.
Vertical interest social media network, CrowdGather, Inc. (OTCQB:CRWG), today announced that it has entered into a definitive merger agreement with privately held, Plaor and Plaor Acquisition Corp, CrowdGather’s wholly-owned subsidiary. Upon closing of the merger, the outstanding shares of Plaor will be converted into 55,075,800 shares of common stock of CrowdGather.
Source

You can add to that, the fact that their VP Advertising Sales stopped working for the company in September 2013 and in November 2013, CRWG were seeking an Ad Ops Manager.

Difficult to be certain of how things worked out over time but this diversification into games seems like a great idea! While the revenue from adverts drops from year to year, the revenue from games increases by even more from year to year. By rights, the money should be in the bank!

However, providing a "free" forum platform really needs to be supported by the users of that platform. This has to mean that the games and the userbase have to come together somehow.

It should be interesting!

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