14 interesting notes from the BitGold conference call on acquiring GoldMoney

posted in: BitGold, GoldMoney | 0



BitGold (XAU:TSXV) has taken the TSX Venture by storm the last couple weeks before settling down this week. The stock has been a roller coaster since trading first began on May 13th.

BitGold is building the world’s largest online platform for precious metals savings accounts.

BitGold timeline

  • May 13th begins trading on TSX Venture exchange.
  • May 22nd acquires GoldMoney for 11.16 million shares.
  • May 29th arranges an $18.25 million bough deal financing at $3.65 per share.

I listened in on the BitGold conference call on the transaction with GoldMoney to hear the latest.

Here are my notes.

  1. BitGold’s mission is to make gold acceptable and usable again.
  2. BitGold needs to make a network effect which means to make a service more valuable for users. BitGold needs to gain users to get a critical mass. BitGold plans to build a network effect and has studied various businesses who have been successful in doing so. A network effect can be very powerful and a moat forms around the business which makes it harder for new entrants to penetrate.
  3. As of the date of the conference call (May 26th) BitGold had 5000+ signups and over $1 million in gold deposits.
  4. GoldMoney shareholders will be subject to a 12 month lock up period.
  5. GoldMoney transaction very important for trust factor with customers they have built over the last 15 years.
  6. GoldMoney had 21,000 accounts with over a 1 gram holding at end of April 2015.
  7. When building their platform Bitgold had to be careful around Gold Money (IP) patents. The two intellectual portfolios make it difficult for a competitor to enter the market.
  8. Integrating the two systems will lead to many efficiencies not currently realized at GoldMoney and BitGold. GoldMoney is a pioneer in the field.
  9. Rough estimates for EBITDA are $4-5 million in 2015 $6-7 million in 2016.
  10. GoldMoney operates in the US and as of yet BitGold does not. Reason for this is the laws around money services business’ not well articulated. GoldMoney is a savings platform so no payments. No guidance on US roll out for Bitcoin.
  11. BitGold has no storage fee while Gold Money has a storage fee, potentially room to reduce Gold Money fee. BitGold nothing changing as it is more of a self serve platform while Gold Money is more managed and offers a higher level of service.
  12. James Turk  on why GoldMoney decided to merge BitGold technology driving factor behind the decision and the two business’ complement each other/
  13. So far BitGold is growing faster than originally thought, user spending is dependent on price of gold. When gold drops transactions increase.
  14. A survey of users show that 30% have never owned gold before, proving BitGold is bringing in new demand and increased interest to gold market.

Over the next 6-12 months the plan is to integrate the the efficiencies of the two businesses, build a mobile app, and ramp up marketing to increase the network of users.

I will be watching BitGold stock actively over the next several months and have already signed up for a BitGold account here.