Through the Intertainment Media Looking-Glass (INT)

Intertainment Media is a very peculiar company which currently trades on the TSX Venture Exchange.  In their own words, they are “a Rich Media Applications leader, focused on delivering leading edge technology and marketing solutions enabling clients to power enhanced branding, loyalty initiatives and consumer engagement.”  Their principal product is Ortsbo.com, a web service which “enables real-time conversational translation in over 50 languages and seamlessly integrates with today’s most popular social media platforms.”  Yes, these descriptions certainly sound like jabberwocky to me, but I think they can be excused as being fairly typical of marketing copy.  Intertainment Media, however, is far from typical in their self-promotion and marketing.

It was the company’s self-promotion, in fact, that made me aware of their existence.   Starting last September, the company began what is best described as an aggressive press release campaign to promote the company to investors.  The last four months in particular have been a veritable onslaught of meaningless, but sensationally written, updates on the business, with an astounding 50 press releases in just the last four months.  That’s approximately three press releases every week!  And, for the company’s purposes, the self-promotion seems to have worked: Intertainment Media’s share price has risen sharply from around $0.10 at the time to over $1.20 today.

These press releases are so incredibly promotional – unprecedentedly so, I would argue — that they tell an astute investor a lot about the company and its management.  You could read just about any of them to see what I mean, but take a look at this one from exactly four months ago, for example, outrageously headlined “Intertainment’s Ortsbo Outpaces Facebook Growth in Its First 6 Months.”

Yes, that Facebook.  This isn’t even a comparison that we have to research to reject, it is truly prima facie absurd.  As the company claims, Ortsbo.com had 2.1 M active monthly “users” after only six months of operations, versus Facebook’s rather quaint 1 M.  Of course, the two companies define their users completely differently.  Facebook’s 1 M users registered for an account, created a profile, and actively engaged with the site.  Nielsen stats showed last year that Facebook users are so engaged that they log an average of 421 minutes of use per month.  By comparison, Ortsbo’s 2.1 M “users” merely visited the Ortsbo.com web page and spent an average of less than 4 minutes there.  It isn’t even clear that those “users” even used the product and engaged in a conversation — a tall order considering that the chat application can take a minute or two just to load and sign in.  Furthermore, Facebook actually restricted their use at the time to college and university students.  And, most importantly, Facebook did not meaningfully advertise the website, which runs in stark contrast to Ortsbo.  One could easily get 2.1 M unique page views — or in Intertainment Media parlance, acquire 2.1 M “users” — through inexpensive banner advertising.  The company humorously went so far as to even create a chart that depicts Ortsbo’s incredible superiority over Facebook and included it with the press release.

As you can see from the above, when you look at the world through the Intertainment Media looking-glass, things are not as they seem.  The world is a bit distorted, fanciful, and often borders on pure fantasy.  There is certainly much more to be said about the company, but unfortunately this is not a story that can be told in one sitting.  And in many ways it is a story that is still being written.

Down the rabbit hole we go.

Disclosure: Short INT.