The first IPO of the year is finally here! Digital marketing company, One Great Studio, just dropped their prospectus. Is this investment right for you? Let’s take a look.

First of all, the information in this video is for educational purposes only, and is not intended as investment advice. Please consult a licensed financial advisor before making any investment decisions.

Now that that’s out the way – Can you believe it’s already August and we’re just now getting the first IPO of the year? Things on the local market have not been the best so a lot of companies shied away from listing. 

So who’s this brave company that decided to take the leap? 

One Great Studio describes itself as a digital-first marketing company. They help other businesses with pretty much everything marketing related. From brand strategy and design to digital marketing, mobile app and website design and development to search engine optimization. 

We’ve actually had their co-founder and CEO Djuvane Browne on as a guest on Money Moves a couple of times and he definitely knows his thing. 

The company is already 10 years old but has been keeping a low profile over the years.  However, there’s a good chance you’ve seen their work. They’re the team behind Barita’s marketing. They’ve helped Barita to craft a very recognisable brand in recent years.  At one point, it felt like you couldn’t even watch YouTube without seeing a Barita ad. 

They’ve also done work with Beryllium, Canopy and iProtect. 

Their business isn’t only local though. 1GS has clients in a dozen countries across the world. So, I guess it helps that their team is almost completely remote, and they’ve been that way since 2012, long before the pandemic.

According to the prospectus, the company went from earning J$21 million in 2018 to $240 million in 2022.  In US dollars, that’s US$135,000 to US$1.5 million. So they’ve 10x’d their growth in just four years.  And it’s even more impressive when you consider half of that time was during the COVID-19 pandemic. 

Their net profit also grew from J$2 million in 2018 to almost J$28 million in 2022 – also more than 10x.  In USD terms, that’s from US$13,000 to US$180,000.  

Now let’s look at the actual IPO. 1GS is looking to raise just over 338 million dollars and then list on the Junior Market of the Jamaica Stock Exchange. 

They’re offering 338 million shares, all priced at a dollar each. 

Half the shares are reserved for strategic partners and staff members and the other half – roughly 169 million shares will be available to the public.

The lead broker is Barita, and the minimum purchase is 10 thousand shares.  So you’ll need at least 10 thousand Jamaican dollars or 65 US dollars plus fees to participate in this offer. 

So what do they want this money for?

According to the prospectus, the bulk of the money will go to reducing their debt to Barita. They borrowed 270 million dollars from Barita last year, in order to acquire a US-based company, High Voltage SEO.  This company specializes in Search Engine Optimization.  

And according to 1GS, that acquisition is already paying off big time! In the last quarter of 2022, the newly acquired SEO business line contributed $76 million to their revenues! That’s 74 percent of all the money they made that quarter!

Now back to the use of the IPO funds.  Another 58 million has been earmarked for strategic growth initiatives such as developing new products and business lines as well as regional and international expansion. 

And finally, 30 million is going towards developing human capital, which is fancy talk for building out a larger team or upskilling their existing employees. 

But as with any investment, there are risks. For One Great Studio, one of its biggest risks is cybersecurity and data protection.  Remember they offer app and website design and development, so they have to be able to keep their clients’ sites secure.

Then there’s the fact that the digital advertising/marketing space is very competitive.  There are dozens of companies that offer the services One Great does. This leads to another potential risk, the company’s ability to get new clients and maintain existing ones.

There’s also a currency risk with 1GS. Because the company has clients from so many different countries, volatility in exchange rates would mean volatility in the company’s revenues.

Now let’s talk about dividends! They plan to pay out up to 30 percent of net profits as dividends. But remember, companies can decide they’d rather reinvest those profits than pay out, so dividends are not guaranteed.

So how do you participate in this offer? 

Applications are only being accepted through Barita’s BOSS platform.  You can also go to onegreatipo dot com to read the prospectus.

The offer opens on August 28 and is scheduled to close on September 18 but we know from past experience that these Junior Market offers tend to close much earlier.  In fact, it’s best to get your application in even before the open date.

And that’s the bottom line. 

So what do you guys think about One Great Studio? Will you be participating in the offer? Are you excited about the first IPO of 2023? Let me know in the comments.

I’ll be doing a detailed prospectus review of 1GS inside the Money Mission on Monday, August 21. We’ll go over the parts of a prospectus, and what are the key things you should look for.

Comment IPO below and I’ll send you the link to sign up. Let’s get this money!

Go to the link in my bio and tap 1GS Live IPO Review to sign up. Let’s get this money!

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