Imagine Ominto (OMNT) was a private company looking to raise money on the TV series Shark Tank. Now imagine the CEO going into the room and saying:

“Hi Sharks, our business is in the online cash back industry. For the past four years, we have miniscule to no growth, average about $20 million per year in revenues, and lose about $10 million per year. We also acquired 40% of an animation company that has not produced anything notable. We’d like $10 million for a 5% stake in our company.”

Upon hearing this, Mark Cuban would immediately fall back in his chair and say: “Are you crazy? I’m out! I’m so out!”

If Ominto was a private company, we believe it would at best be worth $10M-$20M, or below $2 per share.

Ominto (OMNT) is an online cash back company. It provides online cash back shopping deals through ominto.com and dubli.com, which have the same content. Cash back companies are a dime a dozen and it’s a tough business due to high competition and need for constant marketing to entice more customers. Ominto has had low revenues and continual losses every quarter for the past four years. We’ve found that Ominto isn’t even among the top 20 cash back companies. The company hasn’t said it publicly, but it appears from a recent strange merger with no synergies, that it’s transitioning into the animated film business.

Ominto is a former OTC exchange traded stock that just recently got uplisted to the Nasdaq on March 20th. The stock is up over 150% within the last three months due to the excitement and new investor exposure from being on the NASDAQ. The company has liberally distributed its stock to insiders and partners, and some are just now able to sell their shares. In one case, April 5th will be the sixth month mark which allows the private placement investors to sell who bought one million shares at $4 apiece on October 6, 2016.

Additionally, in December, Ominto engaged in a non-arm’s length merger that has no apparent synergies and the Company didn’t report it to be non-arm’s length. It’s with an animation company called Lani Pixels. Most of Ominto’s executives are based in Europe, with the CEO and COO living in Dubai, and Lani Pixels is based in Denmark.

Note, we tried to contact Ominto’s investor relations with questions and they replied:

“In accordance with Regulation FD, we are unable to provide you with any more details than what is in our filings with the SEC.”

We asked them why do they have an investor relations department? They didn’t reply to that question.

In our experience, companies that don’t talk to inquiring investors are often bearish about their future. They don’t want to give anything negative away. Companies that are bullish about their future are usually eager to speak to investors and explain their plans for the future.

If Ominto Was A Private Company – What Would It Be Worth?

Ominto is a struggling company that’s flailing in the wind, with a history of paying employees in stock because they keep running out of cash. The cash back industry requires constant marketing expense to keep up revenues, which is why Ominto has had a $1M+ loss every quarter since 2013. The proof is in the pudding. The following are Ominto’s quarterly revenues, losses and marketing spend since 2013: