Izea Inc. (NASDAQ:IZEA) Explodes 64%

Izea Inc. (NASDAQ:IZEA)

Izea Inc. (NASDAQ:IZEA) shares rallied 64.1% after the operator of a premier online marketplace launched a “first of its kind” service designed to help IZEAx clients distribute 3D assets to social media influencers. Dubbed Augmented Sponsorship the new service leverages ARKit technology in iOS 11 to simplify the placement of virtual 3D objects and animations in real-world environments.

Investors Reaction

The new service appears to have strengthened investor’s sentiments on Izea Inc. (NASDAQ:IZEA) as seen by the stock’s performance in recent trading sessions. Last week’s rally saw the stock rise to highs of $4 a share before it retreated to close the week at $3.20.

The rally helped reverse a downtrend that had engulfed the stock in recent months, plunging it to multi-year lows. IZEA is still trading in a downtrend and needs to close above $4 if an uptrend is to resume. It appears that the Augmented Sponsorship service could be the catalyst to revitalize the stock’s performance on Wall Street.

Izea Inc. (NASDAQ:IZEA)
One month IZEA stock price chart

Augmented Sponsorship

Izea Inc. (NASDAQ:IZEA) has already launched the service with the nations’ leading provider of transition services CORT. The service provider is to use the new technology to provide 3D models of furniture to social media influencers. By doing so, the influencers should be able to place virtual furniture in their home and in return, share their experience with their followers.

“Our platform provides dynamic targeting and delivery of 3D assets to individual influencers, enabling those influencers to place and manipulate virtual objects, and include them in their content creation process. This opens up a whole new way for Influencers to engage with brands and produce compelling sponsored visual content for their audiences,” said CEO Ted Murphy.

Pursuing Influencers

This is not the first time that Izea Inc. (NASDAQ:IZEA) has sought to leverage the power of influencers on social media when it comes to marketing. The premier online marketplace was the first to create a platform for sponsored blog posts, sponsored tweets as well as sponsored check-ins. Since 2016, the company has enabled over 3.5 million transactions between brands and creators.

The IZEAx platform allows Izea Inc. (NASDAQ:IZEA) to bring new content creation tools to influencers allowing them to popularize products that are difficult and expensive to market, such as furniture. The platform also opens up a wide a range of possibilities outside product placement.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $IZEA and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

Izea Inc (NASDAQ:IZEA) Revenue Takes A Hit

Izea Inc (NASDAQ:IZEA)

Shares of Izea Inc (NASDAQ:IZEA) shed 12.71% in market value after the company reported a 3% reduction in booking revenue for the second quarter. The stock ended the day at $1.66 a share after bookings came in at $6.6 million compared to $6.8 million reported in Q2 2016. Revenues in the first quarter were up by 14% to $6.2 million from $5.5 million a year ago.

Izea Inc (NASDAQ:IZEA)
Bar graph for $IZEA

 

Declining Revenue

Izea Inc (NASDAQ:IZEA) is an operator of online marketplaces that facilitates transactions between brands and influential content creators. Some of the company’s content creators include social media influencers as well as accredited journalists. The company compensates these creators for producing and distributing unique content on behalf of its marketers.

A reduction in revenue in the second quarter is a point of concern given that it comes on the reduction of booking accounts and a $1 million client budget reduction. The company uses bookings to ascertain future revenue recognition.

Cancellation of bookings by clients is turning out to be a big problem. However Ted Murphy, Chief Executive Officer, has sought to quash the concerns by reiterating that excluding the large booking cancellation, the company continues to experience strength in managed services segments.

“Exclusive of the $1 million reduction due to the client’s budget cuts, gross bookings for managed services increased 24% year over year. In addition to strong sales, we have seen a meaningful improvement in operational efficiency and expect to report an improved EBITDA vs. Q2 last year,” said Mr. Murphy.

2017 Guidance

Izea Inc (NASDAQ:IZEA) has since reiterated its 2017 revenue guidance of between $29 million and $30 million. Gross margins, on the other hand, should range between 47% and 48%. Izea will report full financial results for the second quarter on August 10, 2017.

Rubicon Partnership

Separately, Izea Inc (NASDAQ:IZEA) has inked a partnership with Rubicon Project to extend its influencer marketing services to thousands of potential advertisers. Under the terms of the agreement, the company is to use Rubicon’s Project technology to extend its IZEAx platform footprint. Izea will provide influencer marketing campaigns as part of the partnership.

The partnership should make it easy for customers scale programmatic influencer marketing campaigns further diversifying Izea Inc (NASDAQ:IZEA) marketing channels. The partnership should also help creators monetize their content.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $IZEA and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.