MySizeID's (Nasdaq:MYSZ; TASE:MYSZ) share price soared today on a large trading turnover. Trading in the share was delayed when a Tel Aviv Stock Exchange (TASE) mechanism for moderating volatility went into operation after the share price jumped 35% at the outset of trading.
Controlled by Shoshana Zigdon (20%), CEO Ronen Luzon (10%), and Yisrael Levi (9%), MySizeID is developing an app that makes it possible to measure a person's clothing size using a smartphone. The app is designed to make it easier to buy clothing online. Today's jump in the company's share price came after it finished Nasdaq trading yesterday with a prodigious 185% leap on a heavier-than-average trading volume, after having risen even further during the course of the days' trading.
MySizeID's shares began yesterday's trading at less than $4, its lowest point since it was first listed on Nasdaq last July. By the end of trading, it had reached $11, after having neared $17 earlier in the day. The share price was volatile in after-hours trading in the US, with rises of up to 20%.
The MySizeID share price has climbed 85% since it was first listed on Nasdaq last July. Today's steep increases on the TASE did not eliminate the gap between the company's share price on the TASE and Nasdaq, where its market cap reached almost $200 million.
Yesterday's trading on the TASE, before the share's boom on Nasdaq, did not hint at what was to come. The share price rose 3.5% on a turnover of just over NIS 400,000. The share's recent surge on Nasdaq, and later in Tel Aviv, occurred for no ostensible reason; the company made no important reports to Nasdaq.
What may have sparked the trend was a story on the http://stocknewsunion.com website before the recent rise. The website's report was very positive about the company's SizeUp DIY app for measuring clothing sizes for the purpose of online orders. Among other things, the website wrote that taking into account the light turnovers in the share and its price, "this could represent a real opportunity for investors that want in early on a stock that could impact an entire consumer sector and that solves a real issue for both consumers and online retailers."
Luzon previously explained that the company was founded "in order to change the way of shopping for clothes online." He added that the company's technology made it possible to turn a phone into a ruler that could measure the length of hands, legs, etc. by moving the phone over them and creating a profile for the person for saving on the cloud, from where it could be interfaced with retail websites. According to Luzon, "The company's competitive advantage is its use of the phone's sensors, rather than taking photographs or physical measurement and feeding in the data."
No revenue, negative cash flow
Despite the great interest that MySizeID has created over the past 24 hours and the market cap it has reached, the company's financial stability and results are far from impressive. In MySizeID's most recent reports, for the third quarter of 2016, its accountants drew investors' attention to the company's loss of almost NIS 16 million in the first nine months of 2016, combined with a negative cash flow of nearly NIS 7 million. The accountants added that the company's ability to meet its obligations in the foreseeable future depended on the sale of securities and guarantees from a financial institution with no credit rating and from promises obtained in financing rounds.
MySizeID is not generating revenue. In addition to expenses of NIS 2 million for R&D and over NIS 5 million for marketing and management and general expenses in the first nine months of 2016, the company had NIS 9 million in net financing expenses and less than NIS 1 million in cash and deposits.
The company gained headlines last year after a delay in listing its shares for trading on Nasdaq was linked to Yitzhak Zigdon, husband of shareholder Shoshana Zigdon, who is wanted by Interpol for securities fraud. In the process of considering listing on the AIM Stock Exchange in London, however, Luzon said, "The regulator himself told us that this was like yellow journalism in the Sun tabloid."
Published by Globes [online], Israel Business News - www.globes-online.com - on February 14, 2017
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