MGM Wireless (ASX:MWR) share price bounces on Amazon deal

The MGM Wireless share price bounced today on news that the company has partnered with retail giant Amazon.

Daniel Ewing

Born in Edinburgh, Scotland, Daniel moved to the Gold Coast, Australia at age 11. Nine years later he is in his third year of University at Monash in Melbourne. While starting out in a Science Degree, Daniel realised it wasn’t for him and promptly transferred to Commerce where he has developed a passion for the stock market. When not studying, Daniel can be most often found at the beach thanks to a passion for surfing.

Published September 17, 2020 5:04 pm AEST

The MGM Wireless Limited (ASX: MWR) share price bounced today as the company announced that Amazon.com, Inc. (NASDAQ: AMZN) would be selling MGM's Spacetalk device on its platform. The MGM Wireless share price flew 6.25% higher in intraday trade, before closing flat for the day at 16 cents.

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What MGM Wireless does

MGM Wireless is a software company that designs and develops technology and wearable devices for connections between families, schools and society.

In 2017, the company shifted to wearables, developing the market leading 'Spacetalk' children's smartphone watch, which is now the significant share of the overall business. Spacetalk is a mobile phone built into a smartwatch designed just for kids from the age of 5 to 12. It allows two-way phone calls and SMS messaging for children to a parent-controlled list of contacts, among other GPS tracking features.

The subscription based 'AllMyTribe' mobile app enables parents to manage their devices.

Amazon deal

Amazon will initially sell the Spacetalk device on Amazon.co.uk. Impressively, Amazon.co.uk is the most visited ecommerce website in the UK reaching 51% of the population, receiving 453 million total visits in August 2020, with Consumer Electronics and Technology being the highest audience interest category. With the UK population beimg 3 times that of Australia, this opportunity opens up a huge market for MGM Wireless as it seeks to expand its footprint.

In addition to building out this new sales channel on Amazon.co.uk, the company continues to invest in other online and brick-and-mortar sales and distribution channels in the UK. In August 2019, Sky began selling Spacetalk through Sky Mobile on monthly plans. Closer to home, MGM Wireless boasts sales partnerships with companies such as TPG Telecom Limited (ASX: TPG).

What now for the MGM Wireless share price

The MGM Wireless share price has not had a good year so far, falling a huge 45%. Shareholders will be hoping that this deal with Amazon provides the impetus to turn its fortunes around as it seeks to return to its former highs of 30 cents. The MGM Wireless share price is currently trading at 16 cents.

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