Dallas-based Blackboxstocks Inc. has entered into a letter of intent to merge with Evtec, a supplier of proprietary parts for leading luxury, performance, and electric vehicle brands including Jaguar Land Rover, Aston Martin, and Ford, among many others.
Evtec Group Limited, Evtec Aluminum Limited, and Evtec Automotive Limited comprise United Kingdom-based Evtec. Financial details have not been released.
Blackboxstocks shares skyrocket on the news
Blackboxstocks is a financial technology and social media hybrid platform offering real-time proprietary analytics for stock and options traders of all levels. Today’s news sent the Dallas-based company’s shares sharply higher.
Business Insider reported this morning that “Shares of Blackboxstocks Inc. (BLBX), a financial technology and social media hybrid platform, are surging more than 175% Monday morning after the company said it has entered into a letter of intent to merge with Evtec Group. Evtec, a supplier of proprietary parts for leading Luxury, Performance, and Electric Vehicle brands, expects revenue of $132 million for fiscal 2024. BLBX is at $7.30 currently. It has traded in the range of $1.04-$22.00 in the last one year.”
Evtec said it targets and acquires opportunistic mission critical supply chain assets at distressed valuations with strong order books from 2024 to 2032 for mostly single sourced parts.
Leveraging access to capital markets
Evtec is led by David Roberts, a 40-year veteran of the global automotive market who also serves as a U.K. Export Ambassador. Evtec has record order demand in its pipeline with roughly $500 million in existing orders scheduled for delivery from 2024 through 2032.
“We’re excited about pursuing this unique opportunity with Evtec. We believe that this transaction will provide significant and long-term value for our stockholders in the post-merger company,” Blackbox CEO Gust Kepler said in a statement. “Blackbox will continue operations in the fintech sector as a subsidiary of the parent company and will continue executing its strategic plan in its ongoing mission to provide its users with the best trading information possible.”
Kepler added: “However, we also believe that changes in the supply chain resulting from the pandemic and growing geo-political tensions are creating a unique opportunity for companies like Evtec. Evtec has the vision and resources to near-shore component manufacturing and provide its customers with long term certainty of critical parts and its shareholders with the prospect for higher returns.”
Evtec Chairman and CEO Roberts said the move will help his company grow.
“Blackbox and the team offer us a tremendous pathway and structure to execute our vision for continued growth and global expansion. Our business is spring loaded to take advantage of the tremendous backlog in our industry and our large order book provides us with predictable revenue growth that will serve as a backbone for building a future supply chain for the performance, luxury and EV market automotive segment,” Roberts said in a statement. “With a strong pipeline of strategic opportunities backed by committed revenues, we are excited to leverage our new access to the capital markets to grow our business and drive shareholder value through synergy and growth.”
Blackbox said the letter of intent is non-binding with the exception of a break-up fee of $500,000 if either party terminates the deal before April 29, or the execution of a binding letter of intent or a definitive agreement.
New B2B strategy added to boost revenue
Blackbox is an SaaS company with a growing base of users that spans 42 countries.
In a news release last week, Blackboxstocks announced a reverse stock split at a split ratio of one-for-four. Following the reverse stock split, every four shares of the company’s common stock will be consolidated into one issued and outstanding share, according to the announcement.
On Friday, Blackboxstocks reported its financial results for the fourth quarter and year ended Dec. 31, according to a news release published online. The financial technology and social media hybrid platform noted challenges in 2022 due to a poor macro-economic environment that adversely impacted its revenue, business, and stockholders.
Blackboxstocks said its total revenue for the fourth quarter was $1,068,158, compared to $1,687,236 for the same period in 2021. Revenue for the year ended Dec. 31, was $4,959,109 compared to $6,112,324 for the prior year.
Despite the challenges it faced in 2022, Blackboxstocks said it is optimistic about its prospects this year, with a new B2B marketing strategy and a new mobile application, Stock Nanny, for the self-directed investor market.
Kepler said the company plans to implement a new strategy in 2023 that includes marketing its existing technology to brokerages and other fintech platforms on an enterprise level.
“We believe that this new B2B strategy will allow us to leverage our existing relationships with our brokerage partners as well as with new prospects, providing us a new opportunity for growth outside of our current B2C market,” Kepler said.
Blackboxstocks CFO Robert Winspear said that the company ran “several promotions with deep discounts on our subscriptions during 2022 which helped keep the average subscriber count only slightly below the 2021 count, although they had a much larger impact on revenue and gross margin which, when combined with our strong investment in development, led to a decline in EBITDA.”
The company projects improved results in 2023 because of its new products, revised marketing, and expense reductions, including software development, he said.
The average member count for the fourth quarter and year ended Dec. 31 was 4,607 and 5,420, respectively, compared to 5,749 and 5,565 for the same period in 2021, according to Blackboxstocks.
New B2C mobile app
The company said the development of its new product, Stock Nanny, a mobile application for the self-directed investor market, is a notable investment.
Kepler said this market demographic is exponentially larger than the day-trader segment the company currently serves, presenting a significant growth opportunity.
The company’s web-based software uses predictive technology enhanced by artificial intelligence to identify volatility and unusual market activity that could result in a rapid change in stock or option prices.
In March, Blackboxstocks announced a partnership with Boosted.ai to bring cutting edge tech to investing.
Blackboxstocks said it continuously scans the NASDAQ, New York Stock Exchange, CBOE, and all other options markets, analyzing over 10,000 stocks and up to 1,500,000 options contracts multiple times per second.
The company provides its users with a fully interactive social media platform integrated into its dashboard, allowing them to exchange information and ideas quickly and efficiently through a common network. And Blackboxstocks recently introduced a live audio/video feature that allows members to broadcast on their own channels to share trade strategies and market insight within the Blackbox community.
Get on the list.
Dallas Innovates, every day.
Sign up to keep your eye on what’s new and next in Dallas-Fort Worth, every day.