Why Did MGM Wireless’ Share Price Soar 17% Today?
The school communication tech company MGM Wireless Ltd [ASX:MWR] has tacked on a cool 17.02% to its share price today, up 48 cents, trading at $3.30 per share at time of writing.
MGM is a technology company designing, developing and commercialising a wearable phone watch for children devices, and software for school communication and student absence management.
The company currently has tenders to supply New South Wales, Western Australian, Queensland and New Zealand Government Schools, supplying in excess of 1,350 schools across New Zealand, Australia and the US.
UK to become MGM Wireless buyer, share price up
MGM has today announced international expansion plans to launch their SPACETALK smartwatch in the United Kingdom.
With the release scheduled for April 2019, the move follows the successful international launch of SPACETALK in New Zealand in November 2018.
SPACETALK is a smartwatch designed to help parents to keep in contact with their kids. The watch also features a GPS tracker so parents can locate their child via their smartphone.
The watch doesn’t give children access to social media, apps, open internet, YouTube or other such services that some parents might perceive as dangerous to young children.
MGM Wireless CEO Mr Mark Fortunatow said of the UK launch:
‘At this stage it is too early to say with absolute confidence what our sales expectations are…however, our first year Australian and New Zealand sales have exceeded expectations and we have been impressed by the enthusiasm and support expressed by UK retailers and distributors.’
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MGM hoped to have sold 20,000 units by the beginning of this year, having seen a 10-fold increase in Christmas sales last year.
Perhaps underestimating the ever-increasing popularity of this device, JB Hi-Fi ran out of SPACETALK smartwatches days before Christmas.
The company is confident it would sell out of its 23,000 devices by the time children return to school.
MGM Wireless bets on phone ban
With the announcement in December that NSW will move to ban smartphones from public primary schools this year, MGM feels its products will satisfy parents’ needs to contact their children.
NSW Premier Gladys Berejiklian cited an increase in online bullying, distractions in class and the sharing of explicit images as the cause of the ban.
As SPACETALK does not have access to social media and has parental control functions, it’s likely that the watch will not be subject to the ban.
MGM Wireless recorded $4.02 million in revenue in 1H FY19, up 154% on the previous corresponding period.
The company was one of the biggest small-cap success stories of last year, going from only 60 cents to a high of $5 in November, before ending the year at about $3.90.
This is only the first in a series of announcements expected from the company. MGM also hope to expand to Europe within the next six months.
For Money Morning
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