Society Pass (SOPA), with a bit of luck, could very well be the best performing idea we’ve had – over the next 2-3 years.*
Portfolio Spin-Off NusaTrip (NUTR) Gains 85% in the Past Month.
The Society Passes market valuation is currently under $8 million, which is in our opinion is absolutely insane. We are down slightly since adding it to the Watch List at $1.20 a month ago.
Here’s what we like about Society Pass in 3 (or four) simple paragraphs.
Reason #1. Society Pass (SOPA) is a Asian-Pacific* incubator looking to find promising start-ups, acquire stakes in these start-ups, and then incubate (grow, nurture) these start-ups, while under it’s umbrella. Society Pass has a market cap of just $7.2 million.
So to be clear, Society Pass and all the companies it has stakes in, is currently valued at just $7.2 million. The 14 million share stake they own in NusaTrip (NUTR) the day of IPO, is currently valued at $103.8 million.
How is this possible? We’ve owned companies selling below cash before, usually biotech – who we know will burn through their cash within a year. But we’ve never see a spread like this before. Yes, it’s true $103 million in a subsidiary, is not anywhere near the same as $103 million in cash – but still!
Some of the portfolio companies that Society Pass invested in may be kept, some may be shuttered, and some may be acquired by larger outside firms, as is normal with this VC stage type of investing.
In addition, some their holdings may be spun-off into their own publicly traded entity – with Society Pass retaining a large stake. We would call that outcome their ‘secret sauce.’
Reason #2. Two of the brightest companies in their current portfolio are NusaTrip (NUTR) and Thoughtful Media. The big-picture gameplan is to incubate (grow and nurture), and then have these and some of there other most promising portfolio holdings in the future, listed on a U.S. exchange, and further funded during an IPO.
This is what separates Society Pass from most other Incubators and Accelerators. In addition to incubation experts (software engineers, marketing, accounting and legal) they have a team of IPO experts who can introduce start-ups they’ve groomed, to their network of US based broker/dealers, to help take them public. This is invaluable.
And as we mentioned, they just did this with their NusaTrip (NUTR) portfolio holding, when it went public on August 15th.
The IPO helped NusaTrip raise $17,250,000 (including the overallotment) and today NusaTrip is valued at $143 million.
Society Pass retained 14 million of the shares in that deal. This raised eye-brows all across the Asian-Pacific tech community. SOPA itself was exchange listed in November 2021, as the first Vietnam-based firm to ever complete an IPO on the US stock exchange, raising $28 million.
What additionally separates Society Pass from the other Incubators is that their farm team is Asian based. As we all know Asia is the birthplace of names like Tencent (TECHY), Alibaba (BABA), NetEase (NTES), Trip.com (TCOM) and of course Tik-Tok, which is less then ten years old.
This is similar to the NY Yankees having a farm team based in the Caribbean, operating in Cuba (Yordan Álvarez), Dominican Republic (Pujols), Mexico (Fernando Valenzuela), Puerto Rico (Roberto Clemente) and Venezuela (Miguel Cabrera). Society Pass has its scouts where the talent is, and where the competition to fund and/or acquire tech start-ups is not. That is the business strategy.
LIVE QUOTE
To repeat, NusaTrip is valued at one hundred and forty three million dollars. Good job SOPA guys and gals, we never doubted you. And that’s not where this ends. NusaTrip is just one (their first) example. Their scouts are on a mission to find many more in the years ahead.
#3. Society Pass owned 77% of NusaTrip, on the day it went public. It’s an online travel agency serving the South East Asia market, similar to a mini-Expedia (EXPE), which is valued at $24 billion or China based Trip.com (TCOM) valued at $47 billion.
So let’s do the math. The stake Society Pass had in NusaTrip (the day of IPO) was 14 million shares. That’s 14 million shares x a current price of $7.42, or $103.8 million.
That’s one hundred and three million dollars.
And yet Society Pass has a market cap of $7.2 million dollars. That’s 6.1 million SOPA shares outstanding times $1.16 a share, or $7.2 million.
Just seven point two million dollars? Is that even mathematically possible?
How could the market cap be under $8 million when just one of their portfolio holdings is worth over $100 million? That also excludes another ‘seemingly’ hidden asset in their basement, which is their stake in the wildly popular Thoughtful Media (TMG) acquired in June 2022. TMG is a digital video influencer network (YouTube, Facebook and Tik-Tok) with 10,000 individual influencers reaching an audience of over 50 million.
Owning this stake in NusaTrip is like Society Pass buying a house for $500,000 and the finding $10 million hidden in the basement, using the same multiple. On a per share basis, the NusaTrip stake works out to $14.70 per share. That’s again excluding Thoughtful Media, which will hopefully go public and any of the other companies in their portfolio. Wait, what?
Not surprising, $15.00 is the price target from Ed Woo an analyst at Ascendiant Capital.
Founders and Management
Dennis Nguyen the founder, could have easily chosen to launch and take Society Pass public as a U.S. based incubator, which is a crowded and extremely competitive market. Raised in Southern CA, he graduated from the University of CA Irvine (serving on the Foundation Board of Trustees), the University of Chicago and John Hopkins University. His financial expertise and financial connections come from working as a mergers and acquisition banker at Citigroup, Credit Agricole Indosuez and Daiwa Securities (all Hong Based). He additionally founded a Shanghai based-venture capital boutique focused on investing in small to medium size Asian companies.
Dennis knows a good idea when he sees one, so he instead brilliantly chose to become, what we believe will some day be the top ranked incubator for start-ups, in the Asian Pacific. Pure genius.
Raynauld Liang the current CEO, is equally experienced and leads the team which identifies start-ups to acquire or invest in. Mr. Liang was previously with IBM Asia Pacific and Primeforth Capital Limited a Singapore-based boutique corporate advisory firm as an investment director to work on startup companies and pre-IPO fund raising activities. Well known in the SE Asian financial community, he later founded Connex Capital Limited in 2012, a corporate advisory firm with a focus on advising companies with IPOs in Singapore and Hong Kong.
They both know a good idea when they see one. As do we!
We really don’t have too much more to say, or feel the need to (plus they also have a plenty of cash in the bank). Less any debt of course, which is also listed in their SEC filing.
So one could say it’s like finding $31 million in the basement of a $500,000 house .. less debt.
Well actually we do have a lot more to say, which we will do in our upcoming report, which we promised over a month ago.
Problem was the report was 40 pages long (the more we dug, the more we dug), so we had to spend more time editing and reducing its size, then we even did writing it.! The first ten-pager will be out Monday or Tuesday.
The theme will be “Will Society Pass Become the Asia-Pacific based Version of Sam Altman’s Silicon Valley based Y-Combinator?”
Oh for the record our ‘best ever’ idea (that was a client) was Circle Group Holdings (CRGQ) back in 2003 (a market bottom) which went from $0.15 to $9.00, or up 60 fold. They had one portfolio company called Z-Trim, which took off when Nestle decided to use their product, a fat-free substitute. Good times. It later fizzled out. Or maybe flamed out would be a better description, when they lost the Nestle account. Oh well. Point is with incubators, it only takes one start-up for the ‘parent’ company to do extremely well.
2003, Circle Group Holdings (CRGQ) $0.47 Report.
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DISCLAIMER
Cautionary Note Concerning Forward-Looking Statements
This press release may include “forward-looking statements,” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact included in this press release are forward-looking statements. When used in this press release, words such as “anticipate”, “believe”, “estimate”, “expect”, “intend” and similar expressions, as they relate to us or our management team, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company’s management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in the Company’s filings with the SEC. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are qualified in their entirety by this paragraph. Forward-looking statements are subject to numerous conditions, many of which are beyond the control of the Company, including those set forth in the Risk Factors section of the Company’s registration statement and prospectus relating to the Company’s initial public offering filed with the SEC. Client, SOPA has retained Institutional Analyst Inc, (IAI) for ongoing news coverage and reporting with a combination of equity and cash totaling nine-thousand dollars per month. See upcoming report for full disclosure and disclaimer details. Neither IAI for the Company undertakes an obligation to update these statements for revisions or changes after the date of this release, except as required by law.
Media Contact:
Raynauld Liang
Chief Executive Officer
ray@thesocietypass.com
*While we quote the next 2-3 years, in reality its the next 10 years for maximum potential. The reason we say 2-3, is because of the current gross level of valuation.
*While we say ‘Asian-Pacific,’ its almost the same as saying ‘SE Asia’ where they really are to some. We just like the sound of Asian-Pacific better. Like America or the United States.
