Another Deal for Amazon Partner, GetSwift

There are few businesses so incredible that just being associated to them can make you a fortune.

Amazon.com, Inc. [NASDAQ:AMZN] is one such business.

The online giant is expanding to new areas, facing more competition. If they want to keep their dominant position, they’ll need to keep investing in themselves.

That’s why on 1 December, Amazon signed a global agreement with GetSwift Ltd [ASX:GSW] to optimise their delivery system.

But GetSwift’s 5% share price rise this morning was unrelated to Amazon.

What happened to GetSwift share price?

GetSwift signed yet another partnership agreement. This time with Toast, a point of sale platform for restaurants and hospitality businesses.

Currently, Toast is across 42 of the 52 US states, with more than 20,000 merchants in their network. GetSwift’s software service is expected to increase deliveries within Toast’s network.

What now for GetSwift?

GetSwift’s share price is up almost 1,000% for the year.

getswift share price rise

Source: Google Finance

But not everyone is chuffed about the climb. As reported by the Australian Financial Review:

High-flying tech play GetSwift has launched an audacious capital raising of up to $100 million, less than a week after the ASX suspended the logistics software group for a lack of detail around an Amazon contract that sent the stock up nearly 84 per cent.

Even before the Amazon ASX release, the company, which supplies software to improve so-called “last mile” delivery services, had attracted criticism for its light-on-detail and big-on-promises announcements.

These have included deals with YUM! Brands, where it did not give revenue estimates, and a deal with Atlanta-based NA Williams, a group which helps marketing for major auto parts and accessories retailers including Autozone and O’Reilly Automotive, where it forecast $138 million in revenues when fully implemented.

Critics, including Forager’s chief investment officer Steve Johnson, who has described GetSwift’s announcements on social media as “very fishy”, point out the company has a market capitalisation of $600 million and revenues of just $336,356 in 2017 and that founders’ stock remains in escrow for another 12 months.

But two of GetSwift’s largest institutional investors, IFM Investors and Regal Funds Management, say they expect the company’s valuation and revenues will continue to improve.

Cheers,

Härje Ronngard,

Junior Analyst, Money Morning

PS: What to find more stocks with huge growth potential. Check out these three small-cap stocks trading on the ASX. They could rapidly grow over the next few months.


Money Morning is Australia’s most outspoken financial news service. Your Money Morning editorial team are not afraid to tell it like it is. From calling out politicians to taking on the housing industry, our aim is to cut through the hype and BS to help you make sense of the stories that make a difference to your wealth. Whether you agree with us or not, you’ll find our common-sense, thought provoking arguments well worth a read.

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