Intertainment Media's David Lucatch (center) receives the University of Toronto's 2010 Arbor Award.
As late as January of this year, Toronto’s Intertainment Media (TSXV:INT) was in the remainder bin; a sleepy little company whose stock traded lightly near just ten cents a share. Today, however, Intertainment’s story is developing all the elements of a best seller. With its stock now routinely trading tens of millions of shares a day, the company has risen as high as a half-a-billion dollar market capitalization on the back of Ortsbo, software that translates, in real time, more than fifty different languages across a dozen social media platforms.
Just how popular Ortsbo, which is Swedish for “local”, has become is the subject of heated debate. On April 29th, The Globe and Mail’s David Milstead wrote an article that Intertainment Media management believed“suggested that the Company and its Management are providing misleading and inaccurate data concerning visitors to Ortsbo’s websites.” Intertainment released what it said was “verified and validated Google Analytical information concerning the number of users of its Ortsbo platform” and threatened“pursue legal means to defend the legal rights of the Company and its shareholders”.
The Globe and Mail, subsequently, changed the Intertainment Media piece saying that “An earlier online version of this column on Intertainment Media did not intend to suggest that the company is misleading the public or its investors about the growth of its product, Ortsbo.com, or that the Google Analytics data on the number of unique visitors to Ortsbo.com are inaccurate. The Globe and Mail regrets any inconvenience that may have been caused to Intertainment Media.”
What was confirmed through the Globe and Mail piece is what many may have suspected, a gathering crowd on the street has begun to aggressively short Intertainment Media. Nicholas Abe of Toronto’s Alpha Macro Strategies Fund, whose firm is shorting the stock, said “The only logical conclusion one can draw from that is that they do not have anywhere near [that number of] unique users or people are using the product very briefly and losing interest.”
Cantech Letter caught up with Intertainment Media CEO David Lucatch to talk about the recent market activity.
David, the short interest on Intertainment Media hit an all-time high of 5.37 million shares of May 2nd. It is presumable that many of those shorting your stock do not believe the numbers you are reporting on Ortsbo. What do you have to say?
Nick, first of all, all of our numbers are 3rd party verified by Google Analytics. Google Analytics provides reporting for over 12 Million web sites and some of the biggest names in the business like Twitter, Match, LinkedIn, Answers, Huffington Post and others. They are a trusted brand and report using sophisticated algorithms and methodologies that global professionals count on to measure and monitor websites. Any reference to any other metrics site, platform or methodology to measure our results, other than Google Analytics, will rely on estimates, sampling or in plain English – guess work – they are not accurate, and in fact, if you read their help and disclaimer sections, you can plainly see that. I’m not sure how anyone can take at face value the comments of someone like Mr. Abe, who professes that his analysis about Ortsbo and the Company may be incorrect, and who is openly announcing that he is shorting Intertainment’s stock hoping that the stock loses value, so he and his fund can profit from the loss to shareholders and the Company. Intertainment is focused on building positive value for our stakeholders.