stockAlgorithms

EDNT Setting Up Major Technical Buy Signal on a Tiny Float

NASDAQ:EDNT   EDISON NATION INC
The Situation

Edison Nation has been building a highly unique platform and model over recent months and years. And the company’s work is finally starting to show serious financial growth and traction. All of this lines up extremely well around a key strategy for an augmented launch early next year.

The company is almost like a publicly traded venture capital firm: If you have a great idea, they provide an easy-to-use platform to help take it from “raw idea” to “major market success”, extracting their cut along the way.

In other words, this is an ecommerce services play. EDNT shares have pulled back into a possible sweet spot in terms of value/bargain investment in high-growth-potential Nasdaq stocks: the pullback has happened despite a 36% increase in revenue and a 61% jump in gross profitability. In fact, during the 1H 2019, EDNT saw significant top-line growth of 49.7%, to $11.7 million, driven by continued IP success and scaling its consumer branding operations.

The root of all of this growth is its process of sourcing the most innovative new product ideas, mostly through its proprietary “Edison Nation Innovation Platform”, which finds the most compelling new inventions and product ideas through proprietary algorithms, and then harnesses a pre-built infrastructure of go-to-market resources to get these products in front of consumers through a rapid process.


Blowing it Up

All that’s needed now is a way to juice awareness of these tools and what the company has put into place. Hence, the re-introduction of the company’s Emmy Award-winning TV show (“Everyday Edisons”) early next year – along with an associated app – will hold the potential to blow the roof off of this story.

The key points of validation here are found in core products now succeeding in the market (such as Ezy Dose Medi-Spout, "911 Help Now" pendant, Goodie Gusher party product line, Lullaplayer, My Buddy Bernie, and Smarter Specs) and the company’s numerous high-powered strategic partnerships, including Xspand, Target, Walmart, Amazon, Rite Aid , Proctor and Gamble, and others.

Edison Nation has received more than 100,000 idea submissions and has generated product sales above $250 million at retail through the development and management of over 300 campaigns in their marketplace for clients.

Currently, the Edison Nation platform has a community of more than 200,000 innovators that confidentially submit ideas via the company's online platform.

From this community, Edison Nation reviews and selects the most suitable projects for development, determined by the intellectual property value as well as by the practicality of the idea.

From this vast community, Edison Nation generates revenue of between $25 - $100 per submission that is used to cover program fees and cost related to review.

Edison Nation also makes its open innovation platform available to its members, which enables inventors from around the world to submit ideas for potential consumer products.


Good Stuff is Happening

• Launched exclusive new products for its theme park and entertainment customers, including Disney Parks and Resorts and Universal Studios including; Avatar Light Up Wood Sprite and Star Wars Baton and Shield Set for Disney Parks and Resorts; A Monsters Inc. interactive flashlight for Tokyo Disney; and a Jimmy Fallon microphone for Universal Resorts.

• Licensed Ezy Dose Medi-Spout pill assist cap to Apothecary Products, a global leader in consumer wellness products. It is the second product licensed by Apothecary Products from Edison Nation's innovator community in what is an enhanced effort to license Edison community ideas to established brand partners.

• Edison's Innovation Platform sources product ideas from an organically grown community of 200,000+. Coming First Quarter of 2020, a mobile application will serve to facilitate further platform engagement.

• Return of Emmy award-winning TV show, "Everyday Edisons" with a February 11, 2020 premier - Thomas Edison's birthday - on a leading SVOD. This show is an inspirational reality TV series produced under license by Edison Nation , which chronicles the stories of first-time inventors as they launch their unique products into the marketplace in conjunction with the Edison Nation Online Innovation Platform. "Everyday Edisons" is produced by six-time Emmy Award-winning producer Michael Cable.

• Developed the Edison Academy, inventor centric master classes, teaching the fundamentals of product development and inventing. The Academy serves as a resource to provide ongoing value to the organically grown Edison community of 200,000+, while captivating prospective inventors previously disengaged from Edison Nation . This initiative creates revenue opportunities in the form of recurring monthly and annual subscription fees.

• Expanded their Online Innovation Platform with the "Edison's Design Challenge" that will encourage members of the innovation community to contribute to the design and innovation of products already in Edison Nation's product launch pipeline.

• Expanded the Edison Online Innovation Platform with its Entrepreneur Partnership. The Entrepreneur Partnership is an opportunity for brands to further leverage Edison Nation's inventor community and proprietary range of services to launch new products or scale additional product line.


Technical Situation

Stock is trading on a truly tiny float of 2.48M shares. 6% of that float is currently held short (as of last month). That’s a powderkeg of upside potential in terms of the supply/demand dynamic (shortage of shares) that could get traction on any sharp rip fueled by fresh buzz in the market.

The stock is also now trading above its 50-day MA for the first time in months, suggesting a large time frame shift in direction of trend may have already taken place under the surface. In line with that, we have seen a series of higher highs and a higher lows – the definition of uptrend – since June. A break above the $3/share level could be a major catalyst for upside momentum.
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