MICT Stock Will Grow Wings Ahead

MICT, Inc. (NASDAQ: MICT) has been a hot topic among the investing community as of late. With major expansions in the insurance arm of the company and the coming launch of a trading platform that’s likely to generate significant revenue, there’s quite a bit to talk about. 

Unfortunately, even with all the positive news, about 30 million shares of the company are part of short positions, which is driving the stock down. Nonetheless, this creates a tremendous opportunity. 

Moreover, yesterday, the company issued two important pieces of news that investors seem to have quite a bit of questions about. So, we’ll clear those up today. 

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The S3 And What It Means

First and foremost, there has been a lot of chatter on StockTwits and other message boards around the web about the S3 filed by the company yesterday, which gives it the ability to raise funds. 

So, let’s address that elephant in the room, shall we?

All over the message boards, people are talking about the idea that the S3 suggests a reverse stock split and big fundraise are coming. I don’t believe that’s the case. Here’s why:

  • There’s Plenty Of Money In The Bank. First and foremost, MICT has absolutely no reason to raise funds at the moment. The company has well over $120 million in the bank and isn’t likely to burn through that any time soon. So, dilution simply wouldn’t make sense as that’s normally a last-ditch effort to access much-needed capital. 
  • Reverse Split. Moreover, some suggest that the company is going to move forward with a reverse split, but once again, that’s not something that makes sense. Most commonly, reverse splits take place when companies are about to be booted from the exchange they trade on. MICT is fully compliant with NASDAQ listing requirements, and nowhere near being booted. So, there’s no reason to artificially inflate the stock price. 

So, what does the S3 mean?

It means that if there ever does come a time that the company HAS to raise funds, it has the ability to do so. I don’t see any reason in would need to do so over the next quarter, or even six months, and given the business prospects here, profitability will likely be achieved before that need ever arises. Nonetheless, there’s no publicly traded company that’s making the right moves without a shelf in place to act as a cushion should anything go wrong. So, the S3 was simply management doing what management does, acting in the best interest of the company and those that invest in it; not looking for a reason to move forward with a reverse split and fund raise. 

Earnings Coming Soon

The company also issued news that earnings are on the horizon. While investors wait, it pointed to strong revenues, giving us something to hang onto here. 

MICT is expecting to report revenues in the amount of $8.9 million, most of which came from its insurance business. You know, the business that saw significant expansion recently; the one I said would likely begin to generate significant revenue. Yes! That one!

Well, significant revenues are being generated, and on that $8.9 million in revenue, gross profitability came in around $2 million. That’s massive. 

Think about it. This is the first real quarter of operations for the insurance arm of MICT. Think about the potential to grow when the first real quarter generates nearly $9 million in revenue with $2 million of gross profitability. 

As the company continues to penetrate the Chinese insurance industry, these numbers will only grow, and in my opinion, the growth will be exponential and happen fast. Once again, this is a story of significant coming profitability. 

Don’t Forget The Trading Platform

Soon, likely within the next couple of weeks, MICT is expected to launch a trading platform that will compete with the likes of Up Fintech Holdings and FUTU Holdings. These are companies valued at nearly, or more than a billion dollars, but their platforms aren’t likely to hold a candle to the technology MICT has been putting into its offering. 

At the same time, MICT isn’t sharing data, isn’t giving up margins, and isn’t using licensed software. Everything is in house. Not to mention that the company has a downline of millions of customer emails to send the platform upon launch, which will likely make it an immediate success. 

The Coming Short Squeeze

At the beginning of this article, I pointed to the fact that short interest in the stock, the 30 million shares worth of short interest. Well, I’m here to tell you, that’s not going to last forever. 

There are several catalysts on the horizon for the company, and any one of them has the potential to lead to the type of growth that will squeeze the shorts out of their positions. 

There’s Another Elephant

I’ve received several emails asking if I’m paid to write about MICT, and if I am, how much of my articles are my own opinion, and how much of these articles are being written by Darren Mercer, the CEO of the company. 

As the disclaimer at the bottom of this article, and all of my articles on MICT suggest, I am indeed paid by the company, but they are not paying for my opinion, and Darren isn’t sharing his through my articles. 

I don’t take on customers that I don’t believe in. If I did, I wouldn’t have very much of a following and my service wouldn’t be worth much. 

Moreover, all opinions in my articles are my own. When a company, like MICT hires me, I inform them that they are hiring me to write my opinion, not theirs. Moreover, if anyone at MICT had anything to do with editing my articles, that would have to be outlined in the disclosure, which is not the case. 

The bottom line is that MICT is my customer because I have a platform with a large audience and because I believe in the company. My articles are positive because they reflect my actual opinion. 

While I do have to eat, I will not do so at the detriment of my readers!

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The Bottom Line

The bottom line here is simple. MICT is firing on all cylinders, and thanks to short sellers manipulating the price of the stock, it’s trading at a significant discount. Everything I’ve seen from the company is it acting in the best interest of its investors, from expansion of an insurance platform that led to significant Q1 revenues, to the coming launch of the trading platform that will likely generate significant profitability. All in all, if you’re not paying attention to MICT stock yet, you’re missing out!

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CNA Finance is not a financial advisor or broker dealer. Our articles are designed for informational and entertainment purposes only. This article is the result of a monetary relationship between CNA Finance and MICT under which MICT pays CNA Finance a monthly fee to cover the cost of publications. The views and opinions expressed in this article are those of the author, and MICT has played no role in the writing or editing of the article above.