A lot of investors or speculators on the local share market are on the hunt for the next big tech or digital success story, although often it's like looking for a needle in a haystack.
One potential candidate is online classifieds business Frontier Digital Ventures Ltd (ASX: FDV), with its share price up 9.4% to 58 cents today on the release of a quarterly trading update.
Its management team is describing the quarter ending March 31 2019 as a "breakout" one after it posted an operating cash loss of $1.5 million on revenue of $3.5 million for the quarter.
It also reports the total "portfolio revenue" earned by its portfolio of 14 independent online classifieds websites operating in different emerging markets was $16 million to be up 75% on the prior corresponding quarter.
However, the big difference in actual revenue and "portfolio revenue" is explained by the fact that FDV only owns a relatively small stake in each portfolio business. So only a small part of "portfolio revenue" translates into actual cash revenue for FDV.
So while "portfolio revenue" is growing strongly it's only delivering $3.5 million in actual operating cash revenues for FDV over its most recent quarter. And some consolation the group does have a reasonably strong balance sheet with $17.1 million cash on hand.
Finally, it's also worth noting that it has one key asset via its 30% stake in market-leading Pakistani property portal Zameen, which nearly doubled its own revenue to $10 million for the most recent quarter.
According to FDV's management the Zameen stake is now worth more than $100 million alone based on Zameen's latest funding round which is not much less than FDV's total market cap around $130 million today.
Despite the small cash flows, Frontier Digital Ventures could be cheap if Zameen really takes off, while it also has 13 other irons in the fire.
However, anyone interested should remember it remains an unpredictable bet that is deliberately choosing to invest in some of the world's most volatile countries.
