Don’t you hate it when mom and dad start throwing furniture at each other?
The donnybrook going down at Glance Pay (GET.C) right now is the most tragic pile of ego and body parts you’ll have seen in some time. While trying to convince shareholders, who must be largely daytraders at this point, to grant custody of the company to themselves rather than the other guys, the overwhelming sense must be by now that the company would be in better hands if it went into foster care.
On one side, Penny Green, stock promoter/deal maker/mover shaker extraordinaire.
On the other, the husband/wife team of tech execs Desmond and Angela Griffin.
The punchline? Angela and Penny are sisters.
What’s their beef? Green spent a load of money on marketing her company’s stock. Like, a LOT. The Griffin’s didn’t get why that was an important thing, and when the stock started to slip from a big high and Green wanted to promo it out of trouble, the Griffin’s pulled the rug out from under her and claimed they never liked her anyway.
Let’s be clear here: Both sides have a decent case in that discussion of promo vs hard work. Every public company has the discussion, at some point, as to whether promoting the stock makes sense or not. We see it all the time in the course of our work, where a promoter says, “Equity.Guru does the best investor content in town,” and someone on the board says, “Whoa, that’s really expensive.”
It isn’t, because good investor outreach can bring in millions in buying, or turn millions in selling into hodling, if the company has the right selling points and the analyst has reader respec.
In a company’s first days as a public listing, you need investor outreach and a lot of it. When folks don’t know who you are and you’re trying to convince shareholders to stay patient while you build a business, you can’t leave it to chance that everyone will ‘get it’ like the board gets it.
You also need promotion when you have about 40 million shares of 15c paper coming free trading and the company share price is at $3, to convince folks to hold rather than crater you, which happened with Glance.
That said, the $2.5 million of promotion Green bought for Glance is a lot of promotion. Like, a LOT. That’s like a hundred me’s.
So the group argued and then split, and then got all loud and stompy and Green said, “I’m coming back with an army!” and the Griffins said, “You best come strong!” and then maybe there was gunshots, or at the very least firmly snapped shut eyeliner cases.
And now, here we are, going to war over who gets to own the crumbling pile of rubble that was Glance Pay once.
Unfortunately, the current Board has been a roadblock to Glance Technologies’ success. Not only do they lack the relevant international experience, they have consistently ignored shareholders’ concerns, and have been unable and unwilling to capitalize on revenue-generating opportunities.
That’s why I have requisitioned a special meeting of shareholders to reconstitute the Board and take Glance Technologies international.
Like you, I have been disappointed by Glance Technologies’ recent performance and the continued erosion of our share price. The good news is that, together with a new plan and new Board of highly qualified independent nominees, we can stop the decline and take Glance global.
Here’s the Griffins:
Ms. Green’s willingness to respect applicable rules is questionable. Based on her own filings, she has been involved in trades of shares that violate Glance’s corporate policies and do not comply with insider filing obligations under securities laws. She has additionally actively associated with at least two individuals disciplined by capital markets regulators.
What’s worse, she created a toxic and hostile environment at Glance. Among other things, she often reacted in an angry and hostile manner when asked legitimate and probing business questions. On one occasion, she alleged defamation and threatened to take legal action against the Chair of the Board when he raised legitimate work questions to her in an email. In addition, on several occasions she threatened to involve legal counsel if other individuals at Glance, acting in the best interests of Glance, asked legitimate business questions rather than complying with her various and changing demands.
Look, without going into the reams of pages of detail about why the Griffins think Penny Green is actually Penny Dreadful, we need to come to a simple understanding about what Glance is.
It was a smallcap stockmarket play.
That’s it. It was never ‘the future of restaurant payment services’ (though it was sold as such), and it was never ‘the future of blockchain’ (though it was sold as such).
It was a 15c paper shell that was taken through a rigourous and comprehensive stock promotion campaign that caught a nice wave when blockchain landed and got manic, and went on a 20x run.
I downloaded the Glance Pay app twice and couldn’t make it work. On one of those occasions I was defeated by the complete lack of a ‘pay my bill’ button, and on the other, the thing just wouldn’t connect. I tried to get the help of servers at the restaurant that signed on to use it, and they didn’t know what the fuck I was talking about.
“This thing, on the ad inside my menu. This app? It won’t work.”
“I’ve never seen that before today. What is that? Let me ask my manager.”
That’s my Glance experience. So we took a crap on it, back in the day, in these here pages, and Green and her financiers were not happy about it. Que sera. We’ve never actually done business with her, or Glance, so they can be angry as they wanna be.
They got the last laugh, however, when they gave money to every other stock promoter, media outlet, list owner, newspaper, and fake ass financial website in North America to write about it, and the stock went on a run to $3.
Eventually, all that early cheap paper was blasted out and the guys who get in early on these sorts of things got out early, leaving the stock cratering. It happens. It happens a lot.
Sometimes, when it happens, a good company kicks on again and rises anew. Most times, the founders take their big bank accounts and sit on a beach sipping floofy cocktails, either passing the deal on to someone who wants to actually make a company out of it, or letting it burn for warmth.
At Glance Pay, they decided to burn each other, warmth be damned.
Now, as I stated in the last article I wrote about this mess, I don’t take a side in the dispute based on who I like or having a dog in the fight. Both parties have talked to us about paying for our services to help them get their story out, and we’ve taken the only possible legitimate middle ground and taken no money from anyone.
That allows me to say, without any risk of bias, I think the Griffins are acting nuts.
The Griffins are right when they say that Green’s promotion spend was ridiculously large. Here’s the thing though: They made bank on that spend.
As Green drove that stock price upward, and she did – let’s be honest, nobody gives a shit about a restaurant payment app until you’ve hit 5 million users – the Griffins became paper rich… more paper rich than they’d started out as when they sold PayByPhone to VW for $43m in 2016.
So when that paper wealth began to disintegrate when the blockchain mania ended, there was precious little actual Glance business to prop up a market cap of $300 million.
It went down hard, but it was supposed to because, and please hear this, Griffins: The promotion had ended.
Glance was never a blockchain company any more than I’m a likely star of the next Bachelor TV series. Oh, we can strive for such a thing, but the end result isn’t exactly in our hands.
And so, having convinced themselves that Green’s marketing of them as the next big tech deal was a real thing, and beginning to realize that was all going away now, the Griffin clan collared Green and demanded to know why their hopes and dreams were being dashed on the rocks of reality.
Next thing you know, we have a dissident shareholder battle.
The reality of all this is, Glance isn’t worth chasing. It’s a payment app. I got involved in another payment app startup a few years back, and it all went down in a sack of burning dogcrap when the CEO spent the company budget on ‘celebratory sneakers’ for the staff.
The problem wasn’t that a restaurant payment app isn’t a good idea. The problem is, there are apps out there already (Opentable, Yelp) and POS systems out there already (Squirrel), and delivery options out there already (UberEats, SkipTheDishes) who could stick payment abilities into their tools easily enough and take your business.
Why don’t they?
Because they don’t have to. Because Moneris owns that business. Because it’s not core. Because it costs tens of millions to get enough people to download the app that it’s worth restaurants signing up for
So why fight over the Glance scraps?
PRIDE. That’s all this is right now, and it’s self destructive.
Here’s the Griffins, going for Green’s elegantly toned jugular.
Ms. Green’s dissident nominees did not vet each other, or Ms. Green. They didn’t notice all those inactive companies among the 13 “successful” startups that she claimed on behalf of their fellow nominee, Mr. LoGuidice. Nor did they notice that he also was not President of Ericsson from 2009 to 2017 as claimed. You cannot rely on them to vet anything on Glance’s behalf.
You know who else didn’t vet Green?
Where was all this due diligence when Glance was a penny stock? It’s not as if what Green does or how she does it were industry secrets. Hell, it’s right there in her name.
Hell, they were right there for the ride as she turned their app into a $300m company.
They were right there as Green brought the Mackie brokerage house into the deal, and made their investors massive returns.
They were right there as she was spending all that money on promo, an amount that was high to be sure, but when you consider the hundreds of millions of dollars of market cap it created, it was hardly a bad investment.
In the investor letter the Griffins have filed on SEDAR (you gotta go find it yourself, because SEDAR uses 1986 technology to try to make it impossible for you to do proper due diligence), they go into great detail about companies Green has been a part of that haven’t worked out, or companies she filed paperwork for as a securities lawyer that didn’t pan out like their founders had hoped.
The catch on all that is, it happened before Glance existed, and they STILL BROUGHT GREEN ON BOARD.
Why? Because she knows how to put a deal together and turn it into multiples. It’s what she does. It’s what she did with Glance on the Griffins’ watch. It’s what she’s paid to do.
Is it seedy? Okay, sure. Is it risky? Why yes, yes it is. Can it all come crashing down? Yup!
But it also manufactured $300m in value, and legally.
At one point in the circular, the Griffins complain about all the bought and paid for press Green got their company, reasoning that they prefer earned press to sponsored content.
Funny thing: This is what you’ll find on the Glance website right now:
AS SEEN ON:
And while they gripe and moan about paying for Green’s hair and makeup when she went on BNN to promote their company to investors, they’ve opened SIX offices around the world – two in Canada, two in the US, one in the UK, and one in Australia.
I guess they need offices in London, New York, California, Melbourne, Vancouver and Toronto, because of all the revenue they’re making to justify the current $75m market cap?
Revenue of $1,174,000, compared to $17,000 in Q1 2017.
Hey, not bad!
Oh wait, hang on, clarification incoming:
The current period includes a royalty fee ($1,000,000) and marketing revenue ($44,000),
So, $130,000 in actual revenue last quarter. For a $75m market cap company.
Net loss was $4,869,000 or $(0.04) per share, compared to $964,000 or $(0.02) per share in Q1 2017;
Tell me again how Penny Green’s investor relations and promotion budget of $2.4 million was egregious when you’re opening offices in six cities on $130k of quarterly revenue and $4.48m in losses.
Go on. I’ll wait.
Currently, with the rate of Glance losses and the $13m cash on hand, Glance has nine months of runway to monetize like a motherfucker, or raise a ton more money (good luck on that without your markets guy, and with your stock chart looking like Robin Williams’ last EKG), before it has to seek strategic alternatives.
What the stockholders in Glance really need, and quickly, is for management to put down its mirrors, quit counting each others’ dough, and start coming up with a game plan for saving the company.
The Griffins, it appears, aren’t equipped for that fight. They’ve set fire to everything to show how serious they are, and have managed to ensure nobody will want to exist in their orbit going forward, for fear of being tossed under the bus if a boardroom meeting gets heated.
For mine, I think Green should dump her stock and use the proceeds to buy Glance in three months for pennies.
I wouldn’t, but…
— Chris Parry
FULL DISCLOSURE: There is no financial arrangement between any party in this piece and the author, or Equity.Guru. I just don’t like it when people d-bag out.Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.