Is DatChat Stock Right For You?
DatChat is a social networking company that has a great deal of potential but is still a ways away from generating meaningful revenue. Its operating expenses increased by 486.3% year-over-year to $1.85 million in the third quarter, and the company has yet to generate any meaningful revenue. While this may seem like a negative, investors should consider buying the stock if they are interested in making money.
DatChat’s operating expenses increased 486.3% year-over-year to $1.85 million
Although DatChat operating expenses rose 486.3% year-over-year, the company reported that its total sales were up 61.4%. Its growth was driven by its subscription product, which is expected to generate the bulk of its revenue. In fact, management expects to charge each business $600 per year, which would lead to a revenue run rate of $1.2 million to $3.85 million.
Company’s market valuation
The company’s market valuation jumped 60% on March 28, primarily because of its announcement about its new VenVuu platform, which will allow brands and metaverse landowners to connect. The company’s corporate website and LinkedIn page do not mention VenVuu, but it has garnered retail investor interest. Moreover, its service has been widely discussed on social media platforms, including Facebook, Twitter, and Reddit.
However, DatChat’s privacy features are available in other messaging apps. While most mobile users use SMS and messaging apps to communicate with their friends, DatChat offers end-to-end encrypted messages and a host of extra features. While it is not as popular as other messaging apps, it is far more secure than many of its competitors. Its privacy features make it stand out from competitors, which is a key factor in attracting users.
It has yet to produce meaningful revenue
Although DatChat Inc. is a prominent player in the Metaverse messaging, e-commerce, and advertising space, the company has yet to produce meaningful revenue. Further, the company is highly dependent on the smartphone industry, which is subject to rapid technological development. As a result, it’s best to avoid investing in Dats stock at this time. In the meantime, investors may want to look at SAP SE ADS, Open Text Corporation, and National Instruments Corporation.
It is recouping losses from its IPO
A day later, DatChat’s IPO has ended with the stock at $3.42, recovering losses of 13.4% from Friday’s launch. Regardless of its IPO price, investors are reminded that buying new issues at their introductory prices is not always a good idea. While missing out on early bird pricing opportunities may be frustrating, the flexibility of picking and choosing new offerings more than makes up for it.
Its IPO raised $25.4 million in cash, but it has suffered corrections since. The company still has a theoretical valuation of $5.73, which means that a minimum drop of 54.5% is expected before it makes a profit. Ultimately, the company is well-positioned to survive a market correction. While the company is currently down about 8%, it remains a promising investment for investors.
It is a good time to buy
If you’re looking for an investment opportunity, now is the time to purchase DATS stock. The company has been generating significant investor interest since it was first listed on the stock market in 2021. It also recently sent a letter of intent to acquire Avila Security. DatChat is a promising startup, but it’s early days yet. Here are the key factors to keep in mind:
For starters, the company’s growth will depend on the modularity of its communication stream. DatChat’s Privacy Platform and Private Encrypted Social Network will enable users to communicate with one another and delete messages that they no longer want. This feature could change the game for DATS stock. Digital etiquette experts warn investors to read emails before sending them. Once sent, they are often irrecoverable.