Cinedigm (CIDM) Stock Runs up on Spherex Partnership

Cinedigm Corp (NASDAQ: CIDM) is screaming for the top in the market this morning after announcing that it has entered into a partnership with Spherex. 

The partnership is aimed at accelerating Cinedigm’s international expansion. Of course, that’s great news for those who own CIDM stock. After all, an international expansion will drive meaningful revenue growth. 

Here’s what’s going on:

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CIDM Partners With Spherix

Management Commentary

What Is Cinedigm

What the Partnership Means for Cinedigm

Risks to Consider Before Investing in CIDM Stock

Final Thoughts

CIDM Partners With Spherix

In the press release, Cinedigm said that it has partnered with Spherex in an attempt to accelerate its expansion around the globe. In particular, the companies will be working together on global content localization and compliance. 

To do so, the partnership will deploy artificial intelligence and machine learning capabilities developed by Spherex. 

CIDM said that it selected Spherex as part of its ongoing efforts to monetize its digital content catalog. The company explained that its partnership with Spherex will help to ensure its video assets and metadata are compliant with international regulations for content age ratings. 

Moreover, Spherex will assist CIDM in making sure that its content is optimized to adhere to prevailing cultural norms and practices across a wide range of territories around the world. 

Management Commentary

In a statement, Tony Huidor, General Manager of Cinedigm Networks, had the following to offer:

We are excited to leverage Spherex’s expertise in local market sensibilities and to utilize their AI technology to help pave our expansion into international markets. Having an assurance that our digital content is compliant with best practices and territorial laws around age-rating and cultural norms is critical to the success of our video streaming services and aids consumers in their search and discovery of our channels.

The above statement was followed up by Teresa Philips, CEO at Spherex. Here’s what she had to say:

Helping companies navigate the complicated and treacherous international landscape is at the very core of our business. Cinedigm’s rapid international expansion requires an expertise that combines technology and localization know-how.

What Is Cinedigm

CIDM is a video content streaming company with ownership of several networks. In fact, in its content repertoire, the company has more than 52,000 movies and television shows. 

The company has done very well in terms of distribution as well. In fact, you can find content developed by the company on Hulu, Comcast, Netflix, Direct TV, Showtime, Starz, and more. 

All told, the company owns 14 different content networks, including some pretty big names like ConTV, Dove Channel, Game Tune, and more. 

All in all, the company has spent the past several years building out a content library that’s impressive to say the least. While it has done well with distribution, that distribution has largely been localized to the United States. 

Now, with plans to expand to the global streaming content stage, the company is impressing investors yet again. 

What the Partnership Means for Cinedigm

The partnership with Spherex is overwhelmingly positive news for Cinedigm. Ultimately, for the company to get to where it’s going, it’s going to have to tackle the global market. To do that, it must be compliant. 

Different countries and territories will have different rules surrounding content and the metadata that content comes with. Because these regulations can be so complex, it’s difficult to navigate the regulatory requirements when working to break into multiple markets around the world. 

Nonetheless, CIDM has found a solution. 

The fact of the matter is that Spherex is an expert when it comes to understanding the regulatory landscape of some of the most valuable territories around the world for content producers and distributors. With Spherex on the company’s side, it will be able to put rocket boosters behind its plan to expand to the international market, offering a compelling opportunity for the company and those who own CIDM stock. 

Risks to Consider Before Investing in CIDM Stock

If you’re investing in the stock market, you’re accepting a certain level of risk. There’s no way around that. So naturally, CIDM stock is no different and the risks of an investment should be considered before diving in. Some of the most significant risks include:

  • CIDM Makes NO MONEY. First and foremost, at the moment, Cinedigm isn’t making any money at all! Sure, it’s driving some revenue, but that revenue is being eaten away by expenses, and losses are a consistent reality on financial reports. Should the company not be able to build to profitability soon, it may be forced to seek funding, which could result in the dilution of share values, leading to significant losses. Nonetheless, there is promise on the profitability side if the international expansion goes well. 
  • Local Success Isn’t Indicative of Global Success. CIDM has done pretty well here in the United States. However, the company’s abilities have yet to be seen on the global stage. If it is not able to mirror its local success on the global stage, significant declines could be the result. 

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Final Thoughts

While every stock will come with risk, an investment in Cinedigm is an exciting concept at the moment. The company’s lack of profitability has largely been the result of expansion of its content library, which will prove to be overwhelmingly valuable in the long run. 

Moreover, while local success isn’t always indicative of global success, I believe that CIDM will do well on the global stage. The company’s unique content has been perceived well in the United States, which is a melting-pot audience. Therefore, there’s no reason to suggest that the content will not do well in other regions like Europe and Asia, whose populations are well-represented among the United States population. 

There will always be risks, and you should always consider them. However, in my view, CIDM stock is a compelling play.