Izea Inc (NASDAQ:IZEA), the online marketing company, is the latest company that has drew the attention of the market recently. Have a look at the share price jump. From trading close to $2 per share, the share price went to touch the level of $7 per share.The reason is a seven-figure contract signed with a Fortune 500 financial services company.Additionally, the release of its CurationEngine™ and its algorithm Augmented Sponsorship™ both had an impact on the market.Furthermore, the volume on the exchange, which is one of the best indicators of market interest, increased quite a bit. Please note that more than 20 million shares changed hands some days. 1 year chart for IZEABusinessIZEA was founded in 2006. Until May 2011, the company was not publicly traded. We appreciated the following transactions: the purchase of Ebyline, Inc. in 2015, and ZenContent, Inc. in July 2016. The company is headquartered near Orlando, Florida, and has also offices in Illinois, California, and Canada besides sales presence in New York, Michigan, and Massachusetts.What's the business model?According to the materials given to the market, IZEA operates online marketplaces, wherein companies and influential content creators can meet. The creators are paid by IZEA for producing and distributing marketing contents that include "long-form text, videos, photos, illustrations, and status updates on behalf of marketers through websites, blogs and social media channels."The flagship tech platform is called IZEA Exchange, which, according to the company, enables the company to pay the content creators as well as bidding processes, analytics, etc. Companies can choose among a long list of contents including "blog posts, status updates, videos and photos through a wide variety of social channels including blogs, Twitter, Facebook, Instagram and Tumblr, among others."Furthermore, the company also runs the Ebyline technology platform, which was purchased in January 2015. This seems to be a different business. It was designed to work as a “virtual newsroom” to handle the content workflow of editorial teams with newspapers.Recent DevelopmentsOn September 21, 2017, the company announced a new system called Augmented Sponsorship™. The press release reads that IZEA customers will be able to "programmatically distribute 3-D assets to social media influencers." It was explained that the company uses Apple's new technology:
"Augmented Sponsorship™ leverages the ARKit technology in Apple’s newly released iOS 11, which is optimized for iPhone 8 and iPhone X, and available for all iPhones 6s and greater. ARKit simplifies the placement of virtual 3D objects and animations in real-world environments." Source
We believe that the best way to understand the new system is watching the following demonstration video:
We agree with Ted Murphy, Founder and CEO of IZEA, when he said that the tool will be useful for showing products, such as furniture, or jewelry. These products are difficult or expensive to provide to content creators, thus now they will be able to show the product's capabilities without having to receive them.Additionally, on September 25, 2017, the company released a new marketplace called CurationEngine™, which helps assess the work of influencers. The new tool is expected to increase network quality and also help identify content creators not meeting brand safety requirements. We could read in the press release that the company's new system uses Artificial Intelligence (AI) and Machine Learning Systems (MLS) to do the curation process that humans used to do in the past. We appreciate the development and believe that it will increase the revenue line and accelerate the growth.Ted Murphy, Founder and CEO of IZEA, was quoted:
“We were never going to be able to process all the data with humans, no matter how many people we hired. Now we can curate the entire network in the cloud, in a matter of hours, for less than $50. The machines are only going to get smarter, faster, and cheaper over time.” Source
Market participants, financials and conclusionWe checked what other participants are doing and noted investment firm AWM Investment Company, Inc owns almost 18% of the company.HolderSharesDate Reported% OutValueAWM Investment Company, Inc.1,018,216Jun 29, 201717.84%2,087,342Royce & Associates LP236,176Jun 29, 20174.14%484,160Perkins Capital Management, Inc.184,335Jun 29, 20173.23%377,886Goldman Capital Management, Inc.139,480Jun 29, 20172.44%285,933Vanguard Group, Inc. (The)136,461Jun 29, 20172.39%279,745
Additionally, the following insiders have been buying recently.
Individual or EntityMost Recent TransactionDateShares Owned as of Transaction Date
Acquisition (Non Open Market)
Jul 30, 2017
916,233
Acquisition (Non Open Market)
Jul 30, 2017
12,719
Acquisition (Non Open Market)
Jul 30, 2017
74,656
Acquisition (Non Open Market)
Jul 30, 2017
14,381
Currently trading with a market cap of $40 million, IZEA is an exciting story among small caps. Already generating $27 million in total annual revenues and with almost $5.9 million in cash sitting on the balance sheet, its financial situation is extremely sound.Given that its book value per share is approximately $2.12, the market seems to be discounting that the company will grow at a high pace in the near future. After checking the last company's announcements, we also agree with this assumption.For those that got in early congratulations. For those looking to add an exposure, wait for the pullback.We will be updating our subscribers as soon as we know more. For the latest updates on IZEA, sign up below!Image courtesy of FlickrDisclosure: We have no position in IZEA and have not been compensated for this article.
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