Microcap Mobile Index Off to Fast Start in 2012

In early January, I created a Microcap Mobile Index consisting of stocks that have market capitalizations under $1B and a price over $1 that covered the companies below. Let’s take a look at how the group has performed year to date versus the NASDAQ composite.

Impressively, the Mobile index racked up a 32% year to date gain compared to the NASDAQ which is up 13% year to date. Here is a short recap of some specific news items of relevance to the companies that comprise the index.

Stock Dec. 30 2011 Close Current Price Percentage Gain/Loss

    * AUGT         $1.34      $1.94       44.78%
    * ETAK         $2.65    $2.50          -5.66%
    * GLUU         $3.14     $3.76        19.75%
    * MITK          $7.25    $11.20       54.48%
    * VELT          $6.80    $10.09       48.38%
    * NASDAQ    2605     2951          13.28%
    * Index Average      32.35%

Augme Technologies (AUGT)

• On February 16th announced new features and functionality of its AD LIFE™ mobile marketing and advertising platform. The powerful SaaS-based platform is further optimized for customer ease-of-use while adding a number of key updates to Mobile SiteBuilder and the mobile couponing module.

• On February 14th Augme announced that it had reached a settlement of all issues with Lucid Media which is one of seven current ongoing lawsuits based on Augme’s foundational Intellectual Property. Further details are anticipated to be made public in the near term. Augme® owns 7 patents and it has an additional 13 patents pending with the United States Patent & Trademark Office. Augme® owns 4 International patents pending.

Augme’s® first family of patented inventions plays an integral role in technology platforms and services and enables targeting of content to end-users. The patents are foundational to the methods used in two primary types of Mobile Internet operations:
Device Detection and Mobile Content Rendering
Customized Content & Mobile Advertising Delivery

• Hipcricket, the one-stop mobile marketing and advertising brand owned by Augme Technologies, Inc., announced that it has been named a finalist in the GSM Association’s (GSMA) 17th Annual Global Mobile Awards. Hipcricket was selected as a finalist in the “Mobile Marketing & Advertising Agency of the Year” category from a pool of more than 600 entries.

Glu Mobile (GLUU)  - Highlights from the fourth quarter numbers released on February 7th include:

• GAAP smartphone revenues of $10.1 million grew 228% from Q4 2010 and comprised 66% of total GAAP revenues.

• Non-GAAP smartphone revenues of $15.0 million grew 340% from Q4 2010 and were 75% of total non-GAAP revenues.

• Non-GAAP freemium revenue (micro-transactions, in-game advertising and offers) grew 948% to $13.5 million compared to $1.3 million in Q4 2010.

Mitek System, Inc (MITK)
On February 7th Mitel announced total revenue for the first quarter of 2012 was $3.5 million, an increase of 151% over total revenue of $1.4 million for the first quarter of 2011. First quarter gross margins hit 91% and they signed 250 financial institutions cumulative through December 31, 2011. The shares have recently been flirting with old highs.

Velti, PLC (VELT)
In late January Velti announced that it has successfully completed the acquisition of the remaining equity ownership interest of the parent company of CASEE. CASEE is the largest mobile ad exchange and mobile ad network in China and was founded in 2006 by Chief Executive Officer, Xin Ye and a team of successful technology entrepreneurs.

Conclusion:

I’ve previously written that the mobile space may represent the single biggest technology revolution we see in our lifetimes. Whether it’s me, or Kleiner Perkin’s Mary Meeker saying it, the mobile revolution is not only going to dwarf the original personal computer movement, but it will forever change not only the way we communicate, but the way business is transacted. The influence and proliferation of mobile devices, not limited to smart phones and tablet devices, may no longer be ignored; they represent the new technology frontier.

While the space continues to explode, there remain only a handful of publicly traded pure plays that give me and you access to investing in this once-in-a-lifetime opportunity. The already impressive YTD 32% that my mobile index has generated speaks to the sizeable opportunity that exists if you know what companies to keep an eye on.