The share price of ChoiceTrade Holdings is getting ready to rocket from $1.70 to $30.00 per share. The holding company’s online broker subsidiary, ChoiceTrade has been operating since 2000. It conducts business in all 50 US states and in 58 countries. Over the years ChoiceTrade has received numerous annual 4-STAR rankings from Barron’s. The company, a fintech play with a market cap of $35.7 million just recently went on the radar screen of blue-chip Venture Capital firm Kleiner Perkins.
The company has developed a micro investing app and is now in the process to raise the working capital to launch the app. With the app and other developments which are mentioned below ChoiceTrade is positioned to emerge as a first mover. To understand the significance watch video entitled “Why ‘First Mover’ companies are poised to receive instant $1 billion valuations?”.
The app addresses an untapped market consisting of more than a billion potential micro investors. Its revolutionary for the international financial services industry for these reasons:
- Enables investments for as little as $10 into US stocks and ETFs. Its presently not feasible to invest $10 through any other financial institution in the world since the fees to transfer funds into an account are higher than $10. (see below)
- Money transfer fees for small denominations lowest on the planet. The fee to deposit is 3% plus a fixed $0.30. For example, the fee for a $10 deposit is $0.60 or 6% and the fee for a $1,000 deposit would be $30.30 or 3.03%. All of the world’s banks charge a minimum fee of $35 to wire the funds into a brokerage account. For perspective Western Union has some of the lowest money transfer fees in the world. However, the minimum fee to send up to $50.00 through Western Union is $5.00.
- Accepts all major currencies including the leading crypto currencies.
The app has the potential to be downloaded by a billion or more individuals without ChoiceTrade having to spend any money on advertising for the following reasons:
- App has potential to produce substantial recurring profits for ChoiceTrade and its partners. The user of the app pays 20% of the profits produced by the app to ChoiceTrade. The fees are automatically debited by ChoiceTrade at end of each calendar quarter.
- ChoiceTrade’s plan is to not to attempt to market the app. Instead it will enter into:
- Revenue sharing agreements with global banks and financial institutions who do not offer investments to their clients or don’t have a low enough cost structure to enable their clients to invest as little as $10.00. 99% of all global banks and financial institutions fall into either of the two categories. ChoiceTrade should be able to leverage its credibility as a US online broker to get millions of app downloads very quickly.
- Licensing agreements with distribution networks and publishers who have prospective investor lists, etc. The licensees who will have their own version of the app which will be available in the app stores, will share in the revenue generated by the app.
To minimize the tax liability for all of the international app users, ChoiceTrade intends to utilize some of the capital that it is now raising to establish a wholly owned subsidiary in a country which has a zero-tax on investments policy. The country which is chosen will also be required to have a strong regulatory foundation.
To maximize the returns for the app users and the performance fees for ChoiceTrade and its affiliates, it intends to enter into revenue sharing agreements with experienced investment professionals and algorithm developers. ChoiceTrade has had preliminary discussions with me about the app utilizing the signals of the Bull & Bear Tracker, a proprietary algorithm that I developed. The Bull & Bear Tracker’s signals are utilized to trade bull and bear ETFs which mimic the S&P 500. The ETFs include the SPY and SPXL which are used when the algorithm’s signal is green indicating that the S&P 500 is header higher. The SH and the SPXS which are inverse ETFs are utilized when the algorithm’s signal is red and indicating that the S&P 500 will decline.
The Bull & Bear Tracker is ideal to power a 20% performance fee investment product. The securities or ETFs that it trades are the most liquid in the world. The signals that it published between April 9, 2018, its launch date and June 30, 2019, generated a gain of 32.2% vs. 13.2% for the S&P 500. Its back tested signals which had 66% less risk than its published signals produced a gain of 54.6% for the same period. See July 12, 2019, Track record report. Most notably, the statistics in the table below depict that the Bull & Bear Tracker’s back tested signals for the 18 months ended June 30, 2018 were less volatile than the S&P 500 for each of the investing time horizons.
The Bull & Bear Tracker’s signals are currently being utilized for the Kuvera Wealth Builder, a robo trading product which is managed by Safe Management LLC., who is a registered investment advisor client of ChoiceTrade. Safe Management, a wholly owned subsidiary of the publicly traded Investview (OTCBB:INVU), which is also a recommendation of Shiny-Pennies.com exclusively utilizes ChoiceTrade for all of its robo trading ETF and options products. ChoiceTrade is the first online broker to offer robo trading execution capabilities for registered investment advisors, publishers and individual investors.
To put the potential of the micro investing app into perspective, ChoiceTrade could potentially have hundreds of millions or even billions of app downloads. The number of app users who would become clients could easily dwarfs the aggregate of 59.7 million clients of the US’s largest brokerage firms.
Additionally, investing in startup apps which have addressable markets with the potential for a billion or more downloads have the potential to create enormous wealth. The table below contains the returns from investing $100 in six apps when they were startups. Note that Regulation CF of the JOBs act which now enables all unaccredited investors to invest $100 or less in startups was not approved by the SEC until 2016. Thus, it was not possible to invest $100 into any of the startups in the table below
The micro-investing app is not the only significant new development which provides exponential upside for ChoiceTrade. It will soon become the first online broker to:
- Enable clients to buy and sell the shares of privately held startups and crypto security tokens in their full-service brokerage accounts which includes their holdings of publicly traded securities.
- Have a Regulation CF funding platform to enable startup clients to raise capital from investor clients. This adds a significant new and highly profitable revenue stream from the commissions that are paid to ChoiceTrade by the startups.
ChoiceTrade’s incorporating private equity into a traditional brokerage account is a huge differentiator for the following reasons:
- Provides the competitive advantage to attract the younger investors who can invest $100 into a startup but lack the funds to utilize a traditional brokerage account.
- Enables ChoiceTrade to take market share from the existing online brokers. From my 42 years of experience the biggest beef that individual investors have with investing in private companies is that they do not have an easily accessible paper trail to give their accountants and estate lawyers.
- The investment management industry is rapidly moving toward making private equity investments for middle class investors. ChoiceTrade is the first to provide a fully integrated private and public investments solution to registered investment advisors and their clients. See Deloitte report “10 Disruptive trends in wealth management”.
ChoiceTrade has been heavily discounted by investors. The company only raised $300,000 of the $1 million that offered in its 2018 Regulation CF offering. The reason why investors have shunned the online broker is because it operates at breakeven and has barely grown since it was founded in 2000. ChoiceTrade being five years late to the dotcom party explains why it has struggled. The good news is that ChoiceTrade leveraged the JOBs Act and the crypto craze to transform itself into a fintech play. It now has the new proprietary products and services which address an untapped global audience.
ChoiceTrade has the best risk to reward ratio for any investment opportunity that I have come across in my 42 years in the markets. It’s for six reasons:
- Currently operating at breakeven
- Little additional overhead required to support micro-investing app
- Profit margins from new private equity issuer and investor products much higher than existing products
- Highly scalable digital model provides potential to go viral quickly
- Current market cap of $35.7 million values ChoiceTrade as early stage company
- Has potential to get to $1 Billion market cap in 2020
On July 9th, Ilya Fushman, who is a key managing partner of venture capital firm Kleiner Perkins, recorded a one minute complementary video message to Neville Golvalva, the CEO of ChoiceTrade. The Wall Street Journal called Kleiner “one of the world’s largest and most established” venture capital firms. Kleiner which was founded in 1972 has provided venture capital to more than 900 startups including America Online, Amazon.com, Netscape, Google and Twitter when they were startups or early stage companies. Among its most recent investments is Robinhood, an online broker which caters to millennials. The most recent valuation of Robinhood which was founded in 2013, was $7 billion. Since Kleiner specializes in the fintech space and now that ChoiceTrade is on Mr. Fushman’s radar screen the probability has increased that Kleiner Perkins will become an investor. The minute after that might happen, ChoiceTrade’s market cap could rocket to above a billion. Disclosures:
- ChoiceTrade is not affiliated with shiny-pennies.com or Bull & Bear Tracker.
- I am the startups expert for Kuvera Global. View my video about ChoiceTrade produced for Kuvera’s distributors.
- I am the Director of Research for Dynasty Wealth LLC who is the master licensee of the Bull & Bear Tracker.
- ChoiceTrade Holdings and Dynasty Wealth LLC are co-owners of the BullsNBears.com website. This site is not affiliated with the Bull & Bear Tracker.
- Read my article, “Shares of ChoiceTrade, Crypto Infrastructure Provider to Quickly Multiply”, July 25, 2018