Existing members own lots of our stock. We’re now shifting our focus from ‘gain new members’ to focusing on getting those shares to be more valuable and more liquid (more easily turned into cash).
Revenue / earnings per share is the goal – no more “free” stock
To get earnings per share up, we must stop creating new shares – we need to both stop diluting our stock AND suffering a charge against earnings for issuing that new stock. A double whammy. And when folks shop more, that ALSO depressed our earnings – the cost of the stock we issued for shopping was greater than the revenue we earned. Three strikes and we’re out.
Beginning March 10, 2023, iConsumer will no longer use its stock to attract and reward members. We’re going to focus on getting each of our existing members to use iConsumer more, without increasing the number of shares of stock. We’ll continue to use non stock related methods to increase membership.
The only reward we’ll offer is cashback. We had always said this day would come and now it has. Stock earned or promised for actions that occurred before March 10, 2023 isn’t affected.
Simply, it was time. We always said this day would come. There are very few things we can directly control to change the price of our stock. Here’s some of the bigger motivations behind the exact timing.
We think an increasing stock price affects revenue.
By far the biggest motivation. Our members seem to shop more when iConsumer is on the upswing.
The investment community doesn’t understand giving away stock.
Investors never liked our “giving away of stock“, no matter how rational and clear our explanations were. Potential investors have a negative emotional reaction to the perception of endless stock dilution. Investors didn’t care enough that the reduction in earnings by ‘giving away stock’ had no effect on cash, or that the market value of each shopper exceeded the dilutive factors. So on first glance, our financial statements were ugly, very ugly. And in today’s stock market, we don’t get a second glance.
It was never “free”.
In order to use our stock as a reward mechanism, iConsumer has to meet SEC (U.S. Securities and Exchange Commission) requirements with regular and voluminous and EXPENSIVE filings. The SEC considers what we do to be selling you stock, not giving it away. This meant that the cost of the stock reduced our overall earnings. Dramatically. The faster we grew, the worse our financial statements would look.
Giving away stock was meant to launch us: we are launched.
We now have over 80,000 people who have earned stock. That’s an enormous number of shareholders. No two ways about it, we’re launched. Now we need to communicate that the stock you already own is affected by your using iConsumer and dealburner.
A focus on revenue per member. The launching of dealburner is a big plus and was an important factor in our timing of this announcement. Second, doing this in early March avoids the significant cost of the yearly SEC filings associated with offering our stock as a reward.
The cool new option – stock buy backs
One of the things that theoretically can help raise our stock price is for iConsumer to buy back its stock from shareholders. Not guaranteed to raise the stock price, but a pretty good bet. The SEC said we could not buy back our stock at the same time as we were “giving away” our stock.
Not only would a stock buy back possibly help to increase our stock price, it would solve one other very thorny issue. Getting a shareholder’s stock holdings into a stockbroker’s hands so that the stock could be sold in the stock market is near impossible, and if possible, ridiculously expensive.
When we launched iConsumer, it was easy and reasonably cheap for a shareholder to transfer their stock to a stock broker. Which is a necessary step to being able to sell that stock in the stock market. That changed, not just for iConsumer, but for all small “publicly-traded” companies. Interestingly, it is near impossible and very expensive no matter whether you own 100 shares or 1,000,000 shares. For those who care, the SEC and FINRA (the governing regulators) don’t seem to want to help fix that.
We have only begun to explore the option of stock buy backs. It’ll take some cash, of which we don’t have enough. More on this as we learn more. It’ll take time to work though the intricacies, so it’s not an immediate or certain option.
Additional revenue streams – dealburner to start.
There are a handful of brands (e.g. Amazon, Target ) that, for a variety of reasons, don’t want to work with rewards and loyalty sites like iConsumer. dealburner, owned by iConsumer but branded completely separately, is our opportunity to earn revenue without tying the purchase to an individual consumer.
If you shop Amazon – bookmark dealburner for great deals.
matt, March 7, 2023 at 11:55 am
Couple of questions based on the latest news….
* I assume you will re-brand / re-position iConsumer. The initial pitch was about becoming a shareholder in a publicly traded startup company via online shopping. That message will obviously need to change.
* How do you plan to differentiate iConsumer from other cash back sites? Are you planning to offer a higher % back than competitors? Will this be a communicated message in some way?
* You mentioned making the stock more “liquid” / fluid…. in your mind, have enough shares been issued / created that iConsumer is in a position to be more heavily traded?
* For a while, we had the ability to purchase shares / invest in iConsumer directly, rather than on the open stock market. I assume that option goes away with this switch?
Thanks and looking forward to watching this evolution grow our company.