The intraday trading market has become part of everyday life for many individual traders and investors; there are, in fact, more than 100 million self-directed investors in the U.S. today. Their online brokers provide them with a trading platform, and in most cases, their research tools. However, these tools often pale in comparison to those that professional traders and institutions have access to.
Not only do these new traders lack the tools and technology to compete with Wall St., but most of them have had little investor education, work in a vacuum, and do not receive guidance from other experienced traders. These individual traders and investors not only need better technology, but they also need education and guidance.
Blackboxstocks, Inc. is on a mission to provide day traders and swing traders everything they need, and they are succeeding. The company is leveraging its technical base to bridge the massive gap in the intraday trading market and is rapidly becoming one of the fastest-growing fintech companies in the U.S. – Blackboxstocks Inc (NASDAQ: BLBX) – and has headquarters in Dallas, Texas.
Company Overview
Blackboxstocks, Inc. (Blackbox) provides a hybrid platform that pairs financial technology and social media to provide real-time proprietary analytics and news for traders of all skill levels.
In the past five years, Blackbox has acquired users in 42 countries. The company witnessed a staggering 309% growth in their user base from 2019 to 2020 and reached the 6,000 active paid subscriber threshold per their recent press release. This number is expected to grow to more than double by 2022.
The user base is currently generating annual revenue of nearly $6 million. Its platform essentially caters to day traders and swing traders and intends to transform the trading experience from being a solitary activity, to a community experience. With its screen sharing and broadcasting features, Blackboxstocks aims to move retail traders beyond ancillary communication systems like Twitter (NASDAQ: TWTR) and Telegram to a specialized global community platform with a team environment where they can interact and exchange ideas.
The company’s dashboard and overall experience are highly interactive, through text and audiovisual media, going far beyond the offerings of commonly used services like Seeking Alpha or Tradingview. Most of the traders on its platform are options traders focused on directional trades, and these features are particularly relevant for them.
Since Blackbox is more of a trading community and knowledge-sharing ecosystem, they have the option to integrate its services with existing trading platforms to expand their user base. For example, the company integrates with TradeStation which is an extremely popular trading platform with more than 140,000 users that is touted to become the next Robinhood (NASDAQ: HOOD).
Product Technology
Blackbox’s technology allows it to analyze over 10,000 stocks and as many as 1,500,000 options contracts multiple times per second. Their web-based software is enhanced by its “predictive technology” that uses artificial intelligence to identify unusual market activity and volatility that can result in the price of a stock or option rapidly changing.
Their data is gleaned through continuous scanning of the NASDAQ, New York Stock Exchange, Chicago Board Options Exchange, and other options markets. Blackbox then relays those analytics to stock and options traders on its platform.
Blackbox provides its members with the standard market features found on the electronic trading platforms used by clients of most investment firms/brokerages:
- Real-Time NYSE / NASDAQ Market Data
- Real-Time OPRA Options Trade Data
- Streaming News Feed – Fly on the Wall
- Options News and Upgrades/Downgrades
- Institutional Grade Charts
- Earnings and Dividend Dates
- Daily Advancers / Decliners Scanner
However, Blackbox analytics dive much deeper by providing its members with these proprietary features:
- Volatility Indicator
- Real-Time Algorithm-Driven Stock Alerts
- Symbol Specific Alert Criteria
- Broadcast Enabled Social Media
- Option Push Alerts
- Options Flow Scanners / Heatmap
- Pre-configured Pre / Post Market Scanners
- Stock and Options Volume Ratio Scanner
- Members-Only Live Audio
Blackbox also offers a unique feature called the “Options Alert Log,” which issues specific alerts when its system identifies repetitive, aggressive buying in a particular contract.
Social Component
Blackbox is more than a fintech company. It has created a community of members that can:
- Watch experienced/successful traders on their live channels for trading ideas and strategies
- Use the fully integrated social media features that allow them to follow, direct message, or subscribe to other members
- Follow trending stocks and members within the community
- Post-trade confirmations and other content to engage with the community
A significant principle that drives Blackrock’s commitment to the community is its capability of being “more than just a trading tool.” Instead, the company strives to offer a culture and lifestyle in which stock and options traders can succeed.
Financial Performance & Valuation
For carrying out a peer valuation of Blackboxstocks, the closest peers are trading platforms. After the explosive democratization of trading and the rise of the retail investor, these trading platforms have become an interesting phenomenon. Robinhood’s stock price has continued its ascent, and the company is one of the most expensive fintech stocks today in terms of valuation multiples even though it is heavily loss-making and has weak financial fundamentals.
However, the same cannot be said for Blackbox, given its differentiated revenue model. The company’s fundamental strength is unquestionable given the fact that it has a gross margin as high as 70%. The recent quarterly result reported $1.47 million in revenues and a gross margin of $1 million and managed to reach the 6,000 active user threshold. It clearly has an excellent yield per dollar spent on marketing and advertising.
Key Takeaways
As we can see in the above chart, Blackbox is currently available at a reasonable valuation after the dip that came after its latest public issue. The company issued 2.4 million shares at $5 per share to raise $12 million to accelerate user growth and expand tie-ups. Blackbox also got uplisted to the NASDAQ, where it is getting better recognition from investors and improved trading volume.
Blackbox’s numbers are impressive, but just as remarkable is the commitment the company and its leadership have made to retail traders. Some of their members use trading as a source of diversified income, but many others have made trading their path to self-employment and financial independence. Both groups believe in Blackbox, as evidenced by the results they’ve garnered. The future looks bright for this up-and-coming fintech company.
“We are just getting started.”-
Chief Executive Officer Gust Kepler