One of the hottest stocks to start 2014 has been LiveDeal (NASDAQ:LIVE). The company is quickly becoming a popular alternative to companies like Groupon (NASDAQ:GRPN) in the instant offers space. At one point in January, shares of LiveDeal were up nearly 550 percent since the beginning of the year. Currently, shares are up well over 300 percent.
LiveDeal is an innovative and unique platform capable of connecting restaurants directly to the consumer through special dining offers and coupons. The company has developed a best-in-class platform in response to many restaurants that were unsatisfied with platforms from other companies. LiveDeal has built a platform that offers the following advantages.
- A user-friendly interface enabling restaurants to create limited-time offers and publish them immediately. Restaurants can also create an offer and make it available based on a pre-set schedule.
- Restaurants will have complete flexibility in regards to the days, times, and length of the offers created on LiveDeal.com. This is extremely beneficial because it offers restaurants the ability to create offers on the fly in case of an extremely slow period. Often, restaurants are completely dead during weekdays in the early afternoon. However, if an attractive offer is presented to a hungry consumer, perhaps a restaurant can generate revenue during a period when they normally wouldn’t have.
- The website will have options so that restaurants can manage the number of deals available to consumers.
- Superior geo-location technology will allow multi-location restaurants to segment offers by location. For example, a chain restaurant with a location in a busy part of a major city like Chicago or New York may not want to offer deals for that location. But they might want to offer deals for a more quiet suburb location. LiveDeal.com will allow them to do just that.
- Consumers can easily browse for deals on their desktops and easily redeem. However, in today’s busy world, consumers are often on the go and want to grab a bite in a hurry. Consumers can browse for deals on LiveDeal.com through any of their mobile platforms such as smartphones and tablet devices.
Given the strong run that shares have had, investors might be wondering if it’s too late to initiate a position. I believe the answer is no. In addition to the company’s expansion plans into other major metropolitan cities, the company has upcoming catalyst which could cause a price surge.
On January 23, LiveDeal announced a 3-1 forward stock split. Besides the fact that shares tend to surge into a forward split, short investors will likely need to cover their positions before the split takes effect, which is currently set for early February The company currently has roughly 3.78 million shares outstanding that will increase to 11.34 million after the split. The share price will drop by 66.6 percent to account for the increase in shares outstanding.
The favorable part for investors is that this split will drastically increase the stock’s liquidity. This is extremely positive for investors as the increased liquidity should decrease the volatility that investors have experienced over the past month. The current float is only 1.5 million shares which is fairly small. However, after the split takes effect, the float will be 4.5 million shares which will obviously make it a lot easier for investors to initiate and close positions. All in all, this is likely a beneficial move for investors.
In addition to the upcoming split, investors should also be excited about the positive news announcement that came out on Friday morning. LiveDeal reported that its deal engine, LiveDeal.com, experienced a 153 percent increase in visitors during January 2014 as compared to December 2013. The increase is likely due to increased penetration in San Diego and Los Angeles, as well as the push into San Francisco, which was announced in early January.
LiveDeal is certainly one company that investors should keep their eyes on over the coming months. With lots of exciting developments taking place, the company appears poised for a nice run.