The ASX tech share was up 52% to 9.6 cents before being paused.

The release notes that "trading in the securities of the entity will be temporarily paused pending a further announcement."

That announcement is likely to be a price query request, asking the company to explain why its shares were up 50% on no news.

Why did this ASX tech share rocket higher today?

While there's no news out of the kids smart watch maker today, there has been some news recently that got investors very excited.

So much so, following today's gain, this ASX tech share is now up over 250% since this time last week.

That announcement was the appointment of its new CEO, Simon Crowther.

Crowther was previously the CEO of patent troll company Ipernica, which morphed into aerial imagery technology company Nearmap under his watch. Nearmap was acquired by Thoma Bravo late last year for $1 billion.

Investors appear to be hoping that the new CEO will turn around the fortunes of this poor performing tech company and have been scrambling to buy shares this month.

Crowther seems relatively bullish on the company's future. Commenting on his appointment, he said:

As soon as I met with the board and learnt more about Spacetalk I saw the opportunity to build an exciting business, target valuable sectors and execute in a focused and disciplined way. Spacetalk has an opportunity to make an impact for good as we help give children, parents, guardians, people aging in place, care recipients and their carers freedom to live their lives. I am focused on building on the progress that has been made to date and realising the full potential of the business and the team.

It will be interesting to see if this tech share decides to take advantage of this incredible rise to raise funds and shore up its balance sheet.

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During the 12 months, the technology company's shares lost over 80% of their value.

The good news is that things are looking up for shareholders in 2023.

In fact, with the tech share up 55% to 8.2 cents this afternoon, it is now up 200% from 2.7 cents in the space of two days.

Why is this ASX tech share blasting off?

Investors have been fighting to get hold of Spacetalk shares this week after the company announced the appointment of its new CEO.

According to the release, Simon Crowther will take on the role from the start of next week.

Mr Crowther was previously the CEO of patent troll company Ipernica, which eventually morphed into aerial imagery technology company Nearmap under his watch. Nearmap left the ASX boards late last year after being acquired by Thoma Bravo.

Since leaving Nearmap, Crowther has served as the CEO of Airmap and the managing director of Yamaha Motor Ventures in Silicon Valley with a focus on Aerotech & Sustainability.

Why join this struggling company?

Crowther described Spacetalk as an exciting business with a lot of potential. He said:

As soon as I met with the board and learnt more about Spacetalk I saw the opportunity to build an exciting business, target valuable sectors and execute in a focused and disciplined way. Spacetalk has an opportunity to make an impact for good as we help give children, parents, guardians, people aging in place, care recipients and their carers freedom to live their lives. I am focused on building on the progress that has been made to date and realising the full potential of the business and the team.

Spacetalk's Chairman, Georg Chmiel, was pleased with the appointment. He added:

Following an extensive global search, we are pleased to announce the appointment of Simon Crowther as Spacetalk's new CEO. Simon's track record at Nearmap is outstanding and we are excited to see what he will achieve at Spacetalk. I'd also like to thank Saurabh Jain. As the interim CEO he has done a fantastic job of the first phase of the turnaround. Saurabh will continue as a director of the Company.

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Let's investigate further.

Spacetalk share price jumps on 44% revenue increase

The company detailed several investment highlights in its report, including:

• Revenue of $15.1 million, a 44% year on year increase and record for the company
• EBITDA of $1.1 million, up 615% year on year
• Device revenue grew 65% to $10 million
• Wearables revenue of $12.75 million that also grew 65% over the year prior
• Cash balance of $4.2 million which expanded 32% over the year
• Decreased the debt load by 60% to $1.27 million
• Earnings per share (basic) cents increase of 65%.

What happened in FY21 for Spacetalk?

It was the best quarter on record for Spacetalk in terms of revenue, which came in at $15.1 million. Positive EBITDA that grew more than 600% from the year prior was underscored by "strong device sales" of $10 million.

For instance, Australian and New Zealand device sales grew by 85% to $9.1 million whereas UK sales were flat from the previous year.

In addition, sales benefited from "more than one Spacetalk device being offered in the same category for the first time" in the company's history.

As an example, this was attributable to the Spacetalk Kids and Adventurer devices in the children's domain. Moreover, the Spacetalk LIFE device defined a new category "of seniors connected wearables".

Moreover, app revenue also grew 75% to reach $2.2 million, driving annual recurring revenue of $2.8 million. That's an 88% year-on-year increase.

The company said it managed to "meet its MNO and mass market retailer inventory demands", successfully navigating its way through COVID-19 to do so.

What did management say?

Speaking on the Spacetalk Adventurer's success to date, Spacetalk management said:

Spacetalk Adventurer has been a particular success since its
launch in December 2020 and is our flagship device, accounting
for 41% of device sales revenue achieved in just over six months
of the year ended 30 June 2021 (versus 55% for Spacetalk Kids
and 4% for Spacetalk LIFE, which sold for the whole year).

Moreover, touching on the company's operating leverage, it added:

The strong global growth in the kids smartphone watch category,
and the urgent focus of retailer and MNOs, has enabled us to
increase sales while decreasing our Customer Acquisition Costs1
("CAC") to $1.5 million (-14%), as the Company increasingly benefits
from operating leverage.

What's next for Spacetalk?

According to the company, it is "well positioned for strong growth in FY22".

For instance, it is committed to expanding Spacetalk Life for seniors to a business-to-business model, where it is seeing "strong interest" from aged care providers.

In addition, it is working with a handful of NDIS and aged care providers to pilot a strategy to "enable over 39,000 Aged care and NDIS service providers promote and sell Spacetalk Life".

Investors have favoured the news, pushing the Spacetalk share price well into the green on Thursday. Spacetalk shares are now exchanging hands at 19 cents apiece, a 15% jump from the open.

This extends the run into the green for the Spacetalk share price, which has climbed 73% since January 1. As such, Spacetalk shares have outpaced the S&P/ASX 200 Index (ASX: XJO)'s gain of around 14% this year.

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At the time of writing, the technology company's shares are fetching 17 cents apiece, up 6.25%.

How did Spacetalk perform in Q3?

Spacetalk shares are lifting off today after the company provided investors with a robust trading update.

For the quarter ending 31 March (Q3), Spacetalk delivered record revenue of $3.9 million, reflecting year-on-year (YoY) growth of 110%. The result was also underpinned by a particularly strong Christmas sales period as COVID-19 restrictions eased.

Spacetalk's channel partners placed a record number of orders to ensure enough stock was available for customers. Most notably, Spacetalk's Australian wearable devices segment saw a jump from $0.3 million in Q3 FY20 to $2.4 million in the recent March quarter. Furthermore, this represents an increase of 768% between the 12 months.

Across the Atlantic, the United Kingdom market suffered a setback in revenue. Attaining just $0.2 million, down 36%. The country's extreme lockdown measures heavily impacted consumer discretionary spend. However, Spacetalk revealed it is currently in discussions with a large mobile network operator and retailers to have a physical presence instore. The company also remains on track for its United States launch this year.

Furthermore, Spacetalk went on to mention about its recent updates such as its partnership with Telstra Corporation Ltd (ASX: TLS), and its LIFE B2B2C model launch.

Additionally, the company declared $4.9 million in cash, with $3 million in drawn debt at the end of the March quarter. This follows Spacetalks's recent $5 million loan facility to fund inventory purchases, expand geographically, and invest in its brand.

Management commentary

Spacetalk CEO Mark Fortunatow hailed the strong result, saying:

I could not be more excited about the tremendous progress and growth we are seeing in our business; with the Adventurer and original Kids devices benefiting from their strong leadership in a category now gaining mass market appeal, and the growing recognition by aged care, home care and disability industry participants, of the important contribution our LIFE device makes for enabling their residents and customers live life to the fullest.

About the Spacetalk share price

Spacetalk shares have accelerated to almost 90% in the past 12 months, and are up over 50% year-to-date. The company's share price reached a 52-week high of 22.5 cents in August last year, before moving in circles.

On valuation grounds, Spacetalk presides a market capitalisation of around $28.1 million.

The post Why the Spacetalk (ASX:SPA) share price is soaring 6% today appeared first on The Motley Fool Australia.

Let's look closer at today's announcement from the communications technology company.

What's driving the Spacetalk share price?

The Spacetalk share price is climbing today after the company advised its new B2B2C (business to business to consumer) channel will begin operating on 1 June 2021, coinciding with the launch of the LIFE watch's fall detection feature.

The new B2B2C channel will see the watch retailing through ACH Group. ACH Group is a leading aged care organisation with accommodation options in Adelaide, Melbourne and the Fleurieu Peninsula in South Australia. It supports more than 20,000 older Australians to live well at home and in residential care and independent living units.

The watch's fall detection feature, developed in collaboration with ACH Group, is in the final stages of completion. It will use artificial intelligence to continually improve its accuracy rate, improving as more people use the devices. The new feature will be automatically enabled on all LIFE devices through a free upgrade.

LIFE's price point has also been adjusted. The device will now retail for $399, while access to the paired Spacetalk app will cost users $7.99 per month.

Due to the new price point, eligible customers may now purchase LIFE with funding from Commonwealth Home Support, Home Care, or the National Disability Insurance Scheme.

More about LIFE

Not including the up-and-coming fall detection feature, LIFE includes SOS alerts, a GPS locator, a 4G phone, and reminders that can be used for medications and appointments.

It can also give emergency responders access to a wearer's medical history and information.

Currently, LIFE is available at JB Hi-Fi Limited (ASX: JBH) stores and will soon be launched in Harvey Norman Holdings Ltd (ASX: HVN) stores.

Commentary from management

Spacetalk's CEO Mark Fortunatow said receiving ACH Group's feedback on and support of LIFE was extremely valuable, saying:

We listened, and set about incorporating ACH Group's suggestions, which included fall detection technology and re-positioning pricing to meet the eligibility requirements for Australians to access Government funding through the Commonwealth Home Support, Home Care and NDIS programs. Our commercial arrangement with ACH Group to sell the device and the accompanying Spacetalk App opens an exciting new B2B2C distribution channel for LIFE and broadens its market reach.

ACH Group's CEO Frank Weits also commented on LIFE and its B2B2C channel. He said:

ACH Group recognised that LIFE could fill a gap in the market. Together with its newly incorporated suggested improvements we believe this high quality, stylish smartphone watch will offer peace of mind to older people…

Spacetalk LIFE is a fantastic example of two industry leaders collaborating to bring new, leading-edge and world-class aged care technology to market. LIFE can increase an older person's confidence and their safety, whilst supporting independence, health living, and social connections.

Spacetalk share price snapshot

The latest news on the company's LIFE watch has given the Spacetalk share price yet another boost. 

Currently, Spacetalk shares are up 50% year to date. They are also up by 83% over the last 12 months.

Spacetalk has a market capitalisation of around $25 million, with approximately 165 million shares outstanding.

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Spacetalk shares were trading for as little as 11 cents before going into a trading halt on 16 March. Today, the technology company's shares are swapping hands for 15.5 cents, up 6.9% for the day and almost 41% in a week.

Let's take a look and see what Spacetalk recently announced to the ASX market.

What's been driving the Spacetalk share price?

New loan facility

According to the first release, Spacetalk advised that PURE Asset Management agreed to provide a $5 million corporate loan facility. The line of credit will give Spacetalk immediate funding to scale up operations to capture new market share.

The terms and conditions attached to the loan facility will see it split into two different tranches. The first will comprise a $3 million term loan with an option requiring the company to issue 11 million shares at 30 cents each. The second is a $2 million bridging facility, available until 31 December 2021. Spacetalk will use the funds to purchase inventory, expand geographically, invest in its brand, and put towards working capital purposes.

PURE director Tim Callan commented:

We are excited about entering into a partnership to support Spacetalk, to further scale its market leading ANZ business and expand globally. Connected smartwatches is the fastest growing market for wearables and is forecast to grow at high double-digit CAGR over the next decade.

Spacetalk benefits from a significant early-mover moat in the connected smartwatches niche for kids and seniors, having built strong brand equity, network effect, and a dominant market share.

Spacetalk CEO Mark Fortunatow added:

It is an extremely exciting time for Spacetalk as our expanded product suite continues to print strong top-line growth. The Company is now looking beyond our category leadership in ANZ to the massive global market opportunity.

While this had a positive impact on the Spacetalk share price, the next announcement pushed its shares even further.

Telstra agreement

In addition to the loan facility, the second announcement on Friday that really boosted the Spacetalk share price involved a deal with Telstra Corporation Ltd (ASX: TLS).

Under the agreement, Telstra will begin selling Spacetalk Adventurer devices across its national retail stores and online channels next month.

The products will be placed on Telstra's core wearables device range following completion of final device testing and certification. The planned launch is expected to include marketing and public relations activities, influencer activity and other initiatives.

The devices will be available for outright purchase or on a Telstra repayment plan over a 12 or 24-month period.

In addition, the telco giant is working with Spacetalk to develop a monthly SIM service plan for Spacetalk devices. This will enable Telstra to add new mobile service subscribers to their network.

Telstra retail and regional executive Fiona Hayes said of the agreement:

Smartwatches are the fastest growing market for wearables globally and the addition of Spacetalk will strengthen Telstra's connected smartwatches offering. Spacetalk is a market leader in Australia in connected smartwatches for children and seniors, providing a practical solution for families to stay connected.

Spacetalk CEO Mark Fortunatow continued on:

This is a very strong endorsement of the quality of Spacetalk devices, with Adventurer to be placed on Telstra's core wearable device range.

… Needless to say, we are extremely excited by the enhanced brand recognition and sales growth we expect from extending our customer reach with Australia's largest mobile network operator.

The Spacetalk share price has gained more than 100% in the past 12 months.

The post Why the Spacetalk (ASX:SPA) share price has exploded 40% in a week appeared first on The Motley Fool Australia.

For comparison, the All Ordinaries Index (ASX: XAO) is currently down 0.56%.

The monumental rise comes after investors reacted positively to news of a commercial deal with Telstra Corporation Ltd (ASX: TLS) and a $5 million loan facility from PURE Asset Management Pty Ltd.

Let's take a closer look at what the company announced today.

Spacetalk share price explodes on Telstra deal

The Spacetalk share price on an absolute tear today. In a statement to the ASX, Spacetalk declared Telstra had agreed to sell its Adventurer devices in all retail stores, and online, by April 2021.

The device will be placed in Telstra's core wearables range after it is configured for the Telstra network.

According to Spacetalk, Telstra plans to aggressively market the devices. It intends to use influencer channels, digital advertising, in-person pitching, and billboard placement within stores.

Telstra will sell the technology outright or through payment plans. It also plans to roll out an Adventurer-specific SIM service plan in the near future.

Speaking on the news, Spacetalk CEO Mark Fortunatow said:

We are delighted by the ranging of Spacetalk Adventurer with Telstra, Australia's leading telecommunications and technology company.

This is a very strong endorsement of the quality of Spacetalk devices, with Adventurer to be placed on Telstra's core wearable device range. It is also a recognition by Telstra of the growing market and customer need for Spacetalk devices, and our leadership in the category of kids connected smartwatches. Needless to say, we are extremely excited by the enhanced brand recognition and sales growth we expect from extending our customer reach with Australia's largest MNO [mobile network operator].

Telstra retail and regional executive Fiona Hayes also said:

Smartwatches are the fastest growing market for wearables globally and the addition of Spacetalk will strengthen Telstra's connected smartwatches offering. Spacetalk is a market leader in Australia in connected smartwatches for children and seniors, providing a practical solution for families to stay connected.

The loan facility

In a second announcement, Spacetalk also told the market it has secured a $5 million loan from PURE Asset Management. The credit will be available for immediate use.

The loan is split into two components:

1. A $3 million term loan facility at 9.5% interest with an option obligating Spacetalk to issue 11 million shares to PURE at a value of 30 cents each.
2. A $2 million bridging facility at 12.5% interest.

The term loan will span four years while the bridging facility will last two years. The company will use the credit to purchase inventory, invest in its brand, and for a range of other purposes.

Spacetalk and Telstra share price snapshots

Over the last 12-months, the Spacetalk share price has increased by around 117%. Most of these gains, however, occurred today. One year ago, the company's share price was 9 cents. On Tuesday this week, it closed at 11 cents.

The Telstra share price is currently up a much more modest 0.47% today. At the time of writing, shares in the telecom giant were selling for $3.205. Compared to this time last year, Telstra shares have remained relatively flat – losing around 2% of their value. The Telstra share price has, however, gained around 19% since reaching its 52-week low in October last year.

Spacetalk and Telstra have current market capitalisations of $30.6 million and $37.8 billion respectively.

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What is MGM Wireless?

MGM Wireless is a software company that designs and develops technology and wearable devices, especially for schools and other educational applications. It has no relation to the movie studio of a similar name.

MGM Wireless has been around since 2002, but has had a rather rough trot in recent years. The MGM share price last peaked at 59 cents way back in 2007. It also had a hefty rally in 2018, when it rose to 43 cents per share. However, it's been pretty much downhill since then. The company was trading as high as 31 cents a share in January. But the coronavirus pandemic has hit the company's share price hard, with MGM shares falling 77% between 7 January and 25 March. Even so, with today's rally, MGM has gained nearly 130% since 25 March.

MGM Wireless offers a range of educational software products, including SchoolStar, OutReach and messageyou. These programs are used by schools to communicate school news, broadcast emergency messaging and manage attendance and rollcalls.

Smartwatches hold the key

One of the company's flagship products is the smartwatch Spacetalk. Spacetalk comes in two varieties: Spacetalk Life and Spacetalk Kids.

Spacetalk Life is a smartwatch designed specifically for seniors. MGM Wireless says that Spacetalk Life is an "all-in-one phone, wristwatch, and GPS" which is a "safe and easy way for our older loved ones to keep in contact with family and friends when they need to". It also offers features that aim to combat loneliness and isolation, which is particularly pertinent in 2020 for obvious reasons.

Meanwhile, Spacetalk Kids is a similar watch kids can wear to school, which offers location and communication services designed to keep kids safe, without social media apps and other potentially-unsound features for children. The company says "your child can make and receive calls from a set of contacts you choose", and can also use an SOS option to make emergency calls.

The company sells the kids watch model through two Australian network providers – Telstra Corporation Ltd (ASX: TLS) and TPG Telecom Ltd's (ASX: TPG) Vodafone. More providers are offered for Spacetalk Life. MGM even inked a deal with Vodafone back in June, which involves Vodafone selling MGM's watches at its retail stores.

Why has the MGM Wireless share price been exploding?

As I flagged earlier, MGM Wireless has had a few positive developments in recent months, which are likely helping the company's share price today.

Firstly, MGM told the markets about a month ago that it had inked a deal with United States e-commerce giant Amazon.com, Inc. (NASDAQ: AMZN) to sell its Spacetalk range on its United Kingdom site – amazon.co.uk. Since Amazon is by far the largest e-commerce market in the UK (a large retail market in itself), this deal could prove very lucrative for MGM Wireless if all things go well.

Further, the company also announced earlier this month that it has reached an agreement with Aussie retailing giant JB Hi-Fi Limited (ASX: JBH) to sell its Spacetalk Life models throughout JB's network of 197 stores in Australia. Importantly, the companies expect the watches to be stocked in time for the Christmas trading season. This is the first time the Spacetalk Life products have been stocked in a physical store.

JB Hi-Fi has already been stocking the Spacetalk Kids models in-store since 2018, but MGM Wireless told investors this new deal was "the result of solid initial sales of Spacetalk Life from the company's online store, with positive customer reviews and feedback".

In my opinion, it's the cumulation of these events that have caused a snowball effect and elicited the excitement we see in the MGM Wireless share price today.

Foolish takeaway

MGM Wireless is a company with a turbulent history. Even so, I think the various events of the past few weeks and months have generated some interesting momentum for the company, so it will be fascinating to see where things end up from here.

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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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MGM Wireless designs and develops technology, software and wearable devices to enhance communication between families, schools, and society.

The company's multichannel communication solutions enable schools to communicate with parents and caregivers using their preferred medium. These solutions are used by more than 1,400 schools and 1.7 million parents.

What moved the MGM Wireless share price today?

This morning, MGM Wireless announced it has entered into a sales agreement with Vodafone Hutchison Australia, which is now trading as TPG Telecom Limited (ASX: TPG) following its merger with TPG.

Under the agreement, the mobile network operator will sell MGM's Spacetalk smartwatches in Vodafone retail stores from as early as August 2020.

Spacetalk is a children's smartwatch sold in Australia, New Zealand and the UK through leading retailers like Officeworks, JB Hi-Fi Limited (ASX: JBH), and Kogan.com Ltd (ASX: KGN). 

MGM Wireless describes the device as an "all-in-one smart watch, phone and GPS for kids aged 5-12". Customers manage the Spacetalk watch by downloading the company's AllMyTribe smartphone app, which requires an ongoing monthly in-app subscription.

Vodafone will be the first Australian telco to sell Spacetalk through its retail footprint. It will offer Spacetalk with its 'Red Wearable' plan for a monthly plan fee. Globally, operators Sky Mobile in the UK and Spark New Zealand Ltd (ASX: SPK) offer a similar set up.

Management commentary

Commenting on the agreement, chief executive Mark Fortunatow said:

"We are delighted to have signed this Agreement with Vodafone. For the first time, Australian parents will be able to purchase SPACETALK with a mobile plan for one affordable monthly fee. It's a simple, one-stop solution to keep kids safe and families connected."

Vodafone head of devices, Ian Walls, also shared his thoughts, saying:

"The SPACETALK Watch is a natural fit for Australian families and we are proud to be the first Australian Telco to partner with MGM Wireless to bring this innovative device to the market."

How has the Spacetalk smartwatch been performing?

Since launching on a single online portal in 2017, Spacetalk's distribution channels across Australia and New Zealand has expanded to 777 stores as at 31 December 2019.

Wearable Spacetalk revenues recorded sizeable growth in the first-half of FY20, jumping 140% from $2.64 million in the prior corresponding period (pcp) to $6.34 million. Within this segment, Australian and New Zealand revenues grew by 94% on the pcp, while UK sales added a further 46% growth to overall Spacetalk revenues.

Additionally, AllMyTribe monthly app subscriptions increased to $130,000 in March 2020. This was a new monthly record and represented quarter-over-quarter growth of 19%.

Including today's jump, MGM Wireless has a market capitalisation of just under $20 million. If you'd rather invest in much larger and more liquid companies, don't miss the top ASX growth shares in the report below.

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MGM Wireless is a micro-cap ASX tech share that designs and develops technology, software and wearable devices to enhance communication between families, schools, and society.

The company's multichannel communication solutions enable schools to communicate with parents and caregivers using their preferred medium. These solutions are used by more than 1,400 schools and 1.7 million parents.

What's going on with MGM Wireless shares?

MGM Wireless requested the voluntary suspension of its shares in late May pending an announcement of a significant new customer contract and capital raising.

The company revealed details of the capital raising last week on 5 June, announcing its intention to raise up to $1.5 million via a share purchase plan (SPP).

The SPP will be priced at 10.75 cents, representing a 23.2% discount to the last trading price of MGM shares on 22 May.

MGM Wireless will use the capital raised from the SPP primarily to accelerate the growth of its Spacetalk business.

Spacetalk is a children's smartwatch sold in Australia, New Zealand and the UK through leading retailers like Officeworks, JB Hi-Fi Limited (ASX: JBH) and Kogan.com Ltd (ASX: KGN). 

MGM Wireless is aiming to scale-up growth and progress towards potential "company-changing deals" for Spacetalk and new product releases.

With this, the company detailed two new products set to be released this month: a new model watch specifically for seniors and a new model children's watch.

MGM Wireless believes the revenue growth for its seniors watch could match or exceed the growth it has experienced with Spacetalk. In this way, the seniors watch creates the opportunity to double the rate of the company's overall revenue growth.

New customer contract update

As we touched on earlier, MGM Wireless requested its shares be suspended pending the announcement of two developments: the capital raising and a "significant new customer contract".

While the capital raising was announced last week, details of the contract came today, allowing MGM Wireless shares to resume trading.

The company advised that the contract is currently progressing through the final stages of the customer's authorisation and contract execution process.

However, the requirements of these final stages and COVID-19 logistical issues have reportedly caused the sign-off to take longer than expected.

MGM Wireless noted it will inform the market immediately once it is in a position to make an announcement regarding the outcome of this customer contract.

The MGM Wireless share price closed the day 7.14% lower at 13 cents. With this drop, the company's market capitalisation currently stands at around $18 million.

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MGM Wireless's share price has rocketed because the tech innovator appears to have successfully pivoted from the school communication and attendance management software space into the more general wearable tech space to help parents keep track of their children by communicating to a child's watch via their smartphone.

Despite its meteoric share price rise MGM remains a micro-cap with a market value of just $47 million and much expectation now placed on the growth of its SPACETALK watches.

The group reports it has sold 8,300 SPACETALK watches since launch with sales acceralting and the watches now stocked in 197 JB Hi-Fi Limited (ASX: JBH) stores.

MGM Wireless also has its profitable online school communications business that is used by over 1,100 schools and 1.6 million parents.

The group has no debt and has paid dividends for three years thanks to the success of its school communications operations.

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MGM Wireless Limited (ASX: MWR) shares dropped 27% to just 94 cents after the company announced it expects revenue and earnings to be lower for H1 FY16, compared to the prior corresponding period (pcp). Revenue is now expected to be $1.9 million versus $2.2 million in the pcp, with net profit expected to be just $0.1 million versus $0.6 million in the pcp. The company blamed increased competition in part for the declines and I expect the stock will remain under selling pressure.

Ten Network Holdings Limited (ASX: TEN) shares dropped 3% to 16.5 cents as the broadcaster continues to battle multiple headwinds as new technologies mean more competition and pressure on advertising revenues. The group recently conducted a capital raising at 15 cents and one of its flagship shows currently is the 'Big Bash' cricket that features a diet of heavy advertising by fried chicken merchants KFC. Ten is a stock best watched from the sidelines.

Capitol Health Ltd (ASX: CAJ) is a diagnostic imaging healthcare business that has come under heavy selling pressure after the government announced proposed cutbacks to diagnostic imaging spending at a fiscal review. The shares are down 3.5% to 28 cents today and down 65% over the last six months.

Slater & Gordon Limited (ASX: SGH) will be scrubbing rival law firm Maurice Blackburn off its Christmas card list after it announced it was looking into a class action against Slater and Gordon for breaching its duties under the financial services laws. Slater & Gordon shares were down 6.6% today to 91.5 cents, with the potential for a class action being brought against Slater & Gordon itself completing the management team's humiliation in 2015.

The post Why these 4 ASX shares crashed today appeared first on The Motley Fool Australia.

The profit and revenues are up 46% and 19% over the prior year respectively, with a final dividend of 1.3 cents per share declared, compared to 1.1 cents per share last year.

Report card

Its technology solutions are sold to schools across Australia and New Zealand to help electronically monitor attendance and communicate with parents and teachers on a timely basis.

One of the company's technology solutions allows roll calls to be recorded in the cloud for example, which helps a school save time and money on administration costs.

The full year revenue growth reflected the increase in contracted schools and the cross and up selling of new products, while cash flows were also strong at $1.69 million for the year, compared to $1.05 million in the prior year.

The main dent in the bottom line was an approximate quadrupling of amortisation costs to $638,356. This was attributed to additional charges associated with development expenditure capitalised in 2015.

The group also flagged a $150,000 provision for doubtful debts, but cash generation generally remains strong and the balance sheet healthy with net cash of $1.34 million after borrowings of $150,000.

Outlook

The business appears to have plenty of potential to fund growth and the outlook is for further spending on research to develop products that win customer acceptance and hopefully add shareholder value.

The business has posted an A- year, although management hardly inspired by stating 2016 will be a year of "consolidation and transition to the next phase of the company's development".

MGM Wireless sells for $1.44 today and with earnings per share of 12 cents a moderately accomplished maths student could therefore place it on a reasonable 12x trailing earnings. In my opinion it remains an attractive micro-cap given its outlook, cloud-based technology and reasonable valuation.

Another business far more advanced in selling cloud-based time and money-saving solutions to public and private sector clients is My Net Fone Limited (ASX: MNF), which recently announced it is to make a dividend reinvestment plan available to retail shareholders like MGM Wireless currently does.

The post MGM Wireless Limited top of the class on soaring profits appeared first on The Motley Fool Australia.

Some stocks can seem expensive on traditional valuation metrics but the potential of the underlying business to grow at a rapid rate is what should make them appealing to investors.

If growth businesses are able to deliver on their potential then the stock will seem cheap in hindsight as the strength of the underlying business translates into earnings and share price growth.

I know of three stocks that look expensive on traditional valuation metrics, although all three have some common qualities that may mean they represent good value at current prices.

Company 1: Corporate Travel Management Ltd (ASX: CTD) A medium risk investment and a business that sells travel management solutions to business clients around the world.

Common qualities: The company's travel management solutions helps clients save time and money by influencing booking behaviour and promoting cost efficiencies.

These kinds of solutions are relatively easy to sell to decision makers at corporate clients because they are easy to understand and should improve operational efficiencies at clients' businesses. Corporate Travel Management is growing rapidly due to strong new client wins and has a large global market to grow into.

Company 2: Nearmap Ltd (ASX: NEA) A high risk investment and a business that sells access to aerial mapping imagery to mainly industrial clients in the construction, solar power and local government sectors in particular. The business is already successful in Australia and is now starting to expand into the large US market.

Common qualities: The aerial mapping imagery helps clients save time and money by saving on travel costs and promoting cost-saving efficiencies.

These kinds of solutions are relatively easy to sell to decision makers responsible for signing off costs as they are easy to understand and should improve the productivity of a business. Nearmap has made its first sales in the US market and its high profit margins make it an attractive business if able to generate top-line growth as planned.

Company 3: MGM Wireless Limited (ASX: MWR) is a speculative investment and a business that sells cloud-based technology to schools to help them improve day-to-day administration. For example its solutions allow schools to record roll calls in the cloud or digitally communicate with parents on a timely basis.

Common qualities: The technology helps save schools time and money by reducing administration and improving productivity.

These kinds of solutions are relatively easy to sell to decision makers responsible for signing off costs at as the benefits are easy to understand and likely to help the perception of administrative efficiency at a school. MGM Wireless currently has 1,156 schools signed up to its digital technology and is a micro-cap that looks to have potential.

Advantages

The mutually beneficial nature of the solutions these companies sell is what is allowing them to post such strong growth, although risks remain for all three.

Risks to consider

None of them have much of a moat in defending their market share, although Corporate Travel Management arguably now has the scale to give it certain competitive advantages. Given its growth rates it looks an attractive buy when selling for $11 a share.

However, Nearmap and MGM Wireless remain vulnerable to competition and disruption although these are risks common to every small-cap business and if anyone does know of a rapidly growing small-cap without any competitive threats please do let me know.

Overall, I think Nearmap is an attractive buy at current prices, while MGM Wireless is probably fully valued for now.

There's one more business The Motley Fool has identified that is using the internet to build some competitive advantages and a high-margin money-spinning business model that should interest growth investors everywhere….

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The post 3 top growth stocks to buy for financial year 2016 appeared first on The Motley Fool Australia.

MGM Wireless is in the business of selling communication technology solutions to schools to help them manage daily administrative tasks and monitor key deliverables like student attendance, safety and parent engagement.

For example its technology allows a school to record its roll calls in the cloud and instantaneously message all or an individual number of parents with important information related to the school or their children.

These easy to sell solutions save schools time and money and unsurprisingly sales have been on fire as schools are prepared to pay up to enjoy the benefits of MGM Wireless's futuristic services.

Today's announcement suggests MGM is branching out from helping schools monitor pupils to helping families monitor their own members. MGM Wireless's app used in conjunction with the Apple watch alerts wearers if a child or elderly relative for example does not arrive at a pre-set destination.

The Apple Watch is due to be released April 24 2015 and is likely to be a big seller given the huge market and publicity.

MGM Wireless's family locator app will sell through the Apple App store for $4.99, although whether it proves as compelling as the Apple Watch remains to be seen.

However, MGM Wireless remains a profitable, fast-growing business with potential to grow in multiples above its tiny market value.

Larger tech start-up businesses showing the way in how to profit from the rise of cloud-based communication solutions include My Net Fone Limited (ASX: MNF) and BigAir Group Limited (ASX: BGL).

The post MGM Wireless Limited hits 52-week high on Apple app news appeared first on The Motley Fool Australia.

Growing strongly

Today the business upgraded its half-year revenue and profit expectations significantly from previous guidance that was only issued on December 16, 2014. This suggests the business is seeing exponentially growing sales momentum.

For the six months ending December 31 2014 the business is now forecasting a net profit of $640,000 on revenue of approximately $2.2 million. On the prior corresponding period net profit now looks set to more than quadruple, while revenue is up more than 36%.

In early trade today the stock lifted nearly 20% to $1.34 in response.

What's driving the growth?

The company sells SMS school communication technology solutions that empower schools in their daily administrative functions helping to improve and monitor key deliverables like student attendance, safety and parent engagement.

Once the company signs-up a school on any level it then has the opportunity to upsell higher value products, while it is also investing in developing new products to sell.

Easy to understand and sell functions offered are school roll calls recorded in the cloud, which bring the obvious benefits of speed and functional electronic records.

Clearly the company's sales pitch is working in attracting the attention of those who control the purse strings at schools nationwide. The pitch likely effective in demonstrating the benefits for schools in savings on costs and time, while bringing their communication methods in alignment with the digital future.

MGM Wireless now has a total of 1,143 contracted schools and early learning centres, with potential for far more.

Should you buy?

MGM Wireless is still a tiny company with a market value of around $11 million, which means it is coming off a small base and still offers potential for significant returns. In my opinion it looks one of the best speculative investments on the ASX, but remains a high-risk type investment.

Investors looking for an example of just how successful a business selling cloud-based communication solutions can be should look at My Net Fone Limited (ASX: MNF), which now has a market value around $181 million on the back of ballooning sales.

However, the best way to get rich is to forget the small end of the market and identify rock-solid businesses with consistent track records of growing earnings, competitive advantages, international opportunities and attractive valuations.

The post Here's why MGM Wireless Limited is soaring higher today appeared first on The Motley Fool Australia.

Today, global networking giant Cisco has released its annual Global Mobile Data Traffic Forecast for 2014 to 2019 report. In it, the company says, "the ongoing adoption of more powerful mobile devices and machine-to-machine (M2M) connections combined with broader access to faster cellular networks are key contributors to significant mobile traffic growth."

Cisco also notes that the worldwide shift from basic feature phones to smartphones, growing usage of tablets and expanding M2M applications means more 'smart' traffic. Total mobile traffic is expected to rise 10-fold from 2014 to 2019, or at a compound rate of 57% each year.

Mobile traffic is forecast to reach 292 exabytes by 2019 – the equivalent of 6 trillion video clips, 65 trillion images and 292 times more traffic than all fixed and mobile data generated in the whole of 2000.

By 2019, there will be 5.2 billion people using mobile phones – more than 69% of the world's total population. The number of wearable devices, such as watches and cameras, will grow from 109 million last year to more than 578 million in 2019. These wearable devices already generate 6 times more traffic than a basic mobile phone.

The Asia Pacific region is expected to generate the most mobile data traffic – more than double North America and nearly four times that of Europe.

Those are some amazing statistics – and if correct – clearly a massive tailwind for the five tech stocks we mentioned and a couple more that weren't on the list.

It's hard to go past Telstra Corporation Ltd (ASX: TLS) for its dominance in Australia, not just of mobile communications, but its fixed broadband network, infrastructure, and desire to expand into Asia.

MGM Wireless Limited (ASX: MWR) – a company that provides schools with the technology to message both parents and students via SMS. MGM now has more than 1,000 schools using its technology. While only tiny, MGM has seen its shares surge more than 20% today, after upgrading its net profit forecast for the first half of 2015 financial year.

Speedcast International Ltd (ASX: SDA) – which provides satellite communications to remote locations such as deep-sea oil rigs, ocean going vessels and mining camps in the middle of nowhere. With the demand for data expected to rise, Speedcast should see steady demand for its products and services. You can find out more about Speedcast here.

The post Are you missing out on this mega-trend? appeared first on The Motley Fool Australia.

Vocation Ltd (ASX: VET) is top of the class today as the private education provider added 5 cents or around 20% this morning as some believe the worst is over for a business that has seen its shares fall in value more than 80% from peaks hit as recently as September.

Vocation has lost the confidence of big-hitting institutional investors after a series of profit warnings and allegations of misleading conduct. This has resulted in court claims against it from numerous investors, which the company will still have to hurdle before it can confidently look to the future. The down-and-out price is likely leading to smaller investors speculating on its turnaround potential.

MGM Wireless Ltd (ASX: MWR) is another education-related business that today upgraded its profit forecast for the six months ending December 31, 2014. Revenue is now expected to exceed the first half of 2014 by 22% to 28%, and surpass $2 million.

The company's technology-enabled products let schools deliver communications to parents usually via personal mobile devices. With MGM's products the days of school newsletters blowing around the sports pitches look long gone and its growth ambitions spell potential trouble for misbehaving school children everywhere.

The company is clearly having success at selling its products to schools, with daily tasks like roll calls now even able to be hosted in the cloud. It has new products planned and certainly looks one to watch, with the stock closing at $1.15 today.

Fertoz Ltd (ASX: FTZ) has rocketed almost 35% today after announcing it has signed a marketing and distribution agreement to expand its rock phosphate distribution network. Phosphate is an essential compound of fertiliser which facilitates crop yields for agricultural businesses worldwide and Fertoz is exploring for the commodity primarily in Canada and the US.

The Canada deal is an important milestone for the company after the share price collapsed in half over the prior six-month period. Much of the company's outlook would appear to rest on how quickly it can produce and sell fertilisers for the giant North American markets. The stock lifted to 29 cents on the back of the news from Canada.

The post Here's why these 3 stocks are soaring higher today appeared first on The Motley Fool Australia.

1) Thinking that the more know you about a company, the less risky it is to invest in; and,
2) Failing to adequately consider the possible downside, or investing too much in any single company.

Some lucky people will invest heavily in the right risky stock, but others will choose the wrong one. You can avoid that worry by diversifying your portfolio. I aim to own 10 – 25 different stocks for the rest of my career, but anything less than eight is usually quite risky.

Some time ago I mentioned I'd bought Azure Healthcare Ltd (ASX: AZV) at 27.5c, and that risky investment has turned out well, with the company's share price up over 70% on the back of strong profit growth.

Motley Fool contributor Peter Andersen has opined that he thinks there is plenty of value left, even at above 45c. I'm extremely hesitant to disagree with Peter because following his recommendations has made me good money. We even disagreed about David Jones Limited (ASX: DJS), and I turned out to be wrong! However, I tend to agree with those who think Azure is a hold, rather than a buy, at the current price of 48 cents.

Interestingly, key personnel (including the CEO) have been selling down over the last few months, at prices ranging from around 25c to 45c today. In any event, there's no doubt the company – which sells monitoring and administrative systems to hospitals – is sure to benefit from healthy tailwinds for many years to come.

Another little company growing profits for shareholders is MGM Wireless Limited (ASX: MWR), which provides nifty roll-marking systems and apps that can track students' whereabouts.

The core business is a system whereby schools and daycare centres can send mass-SMS messages to parents should the need arise. Although the company is somewhat vulnerable to its wholesale telecommunications providers, I really like the fact that it has an existing commercial relationship with so many schools, its business is scalable and the services are sticky.

The company has just gone into a trading halt "pending release of an announcement regarding the award of a contract by a state education department." Cross your fingers for me – I hold shares in this one too, bought at around the current price of $1.20.

I have also previously mentioned medical device maker Nanosonics Limited (ASX: NAN), which despite earning plenty of revenue, is yet to record a full year net profit. Although gross profit is following a pleasing trajectory. 

Furthermore, I've probably been a bit too slow to appreciate the fact that at a certain point, hospitals will likely rush to buy the company's Trophon EPR product, which offers a superior way to sterilise ultrasound probes. Infection arising from inadequately sterilised probes literally kills people, and given the litigious culture in the USA, it seems likely hospitals will move to minimise the chances of being sued. 

The post These 3 stocks could shoot the lights out appeared first on The Motley Fool Australia.