Towerstream Corporation (NASDAQ:TWER) Is Playing Out Exactly How Honig Expected

Towerstream Corporation (NASDAQ:TWER) announced last month that Barry Honig had picked up a substantial position in the company, disclosing a 9.9% holding by way of this 13G. If there's one person who knows how to get a stock moving at this end of the market, it's Honig. He's had countless hits (often in cahoots with Opko Health Inc.(NASDAQ:OPK) Chairman and billionaire healthcare entrepreneur Dr. Philip Frost) and any stock he takes an interest in is well worth a look.The long term reward on his exposures is not always clear cut. Honig is a holder of the currently embattled MGT, which is drawing scrutiny from all corners of the market right now. That said, as momentum plays, they can be golden. MGT, for example, gained more than 700% after Honig disclosed his position. The same happened with Venaxis Inc. (NASDAQ:APPY) earlier this year.He's one of the top small cap investors in the world, and the mention of his name is enough to draw buy volume to a stock. It’s happening right now with Towerstream (the company gained close to 20% yesterday on announcing of its Q4 growth initiatives) and we think there's plenty of upside run room on offer for the momentum trader.Before we get into catalysts, and what we think is driving Honig's thesis, let's quickly take a look at the company for those not yet familiar with Towerstream.In cities, high rise building tenants (we're talking offices and business real estate) will generally sign up to an internet connection that shares across the building, and is wired in to the main cable lines at exchanges nearby. This can be costly, and the shared nature of a cabled network means it can also be slow when there's a large amount of strain on the network – peak business hours, for example.Towerstream has developed a technology that allows it to essentially blanket large areas of a city with a wireless internet network. The company installs its tech at the top of high rise buildings (the higher, the better) and then its sales team goes what is essentially door to door to each of the business tenants in the coverage area offering connection. The internet is reportedly faster (or at least as fast) than the cabled network, just as secure and – here's the kicker – half the price.It's highly scalable, all the company needs do is install extra units to expand its coverage area and – in turn – it's book of potential sales leads, and the pitch is one of the easiest sells we've seen.It's this scalability on which we think Honig is basing his exposure. The company did $6.8 million in revenues during the second quarter of this year, and expects to dramatically increase this for the comparable period in 2017, as supported by its just released expansion plans. During the fourth quarter this year, management is targeting the addition of 100 new buildings to its On-Net footprint (that's an extra 100 buildings for its sales team to go after) and by the end of the second quarter next year, expects to have nearly 500 buildings On-Net. 50% of the company's current buildings have multiple customers, serving as strong proof of concept demand, and if the company can maintain this metric across its expansion, it's looking at revenues of $25 million plus quarterly from second quarter 2017 on out.For a company with a market cap of circa $10 million, that's not a bad top line.As ever, cash is one of the primary concerns at this end of the market, but burn has narrowed over the last two years, and while expansion costs money, the one-unit-multiple-building nature of the company's technology limits the capital drain somewhat.We've watched Honig turn a company in to a real runner many times over the past decade, and this could be his next big play. Subscribe below and we'll keep you updated as things play out!Disclosure: We have no position in TWER and have not been compensated for this article.