What do maps and cannabis have in common?

This company almost seems made up.

WM Holding Company (MAPS) combines four things:

  • Cloud SAAS
  • Cannabis
  • SPAC
  • Maps

You heard me right.

The interest in this unknown company recently surged….6,000%!

Technically it went from 0 to 6,000 searches, which created a division error, but hey, math is for nerds.

This stock checks the box for nearly every popular trend from 2021.

So, what’s the story?

It’s a SPAC man

The short version is this.

WM Hodling Company LLC (WMH) provides tech and software infrastructure to the cannabis industry.

Silver Spike Acquisition Corp, a SPAC, combined with the company to form the new symbol MAPS.

Hence why volume surged – the ticker didn’t exist before.

Shares began trading under the new symbol on Wednesday.

WMH operates Weedmaps, the Amazon of marijuana, with Google Maps added in the mix.

Their flagship online marketplace connects consumers with cannabis-based businesses. 

WMH provides a suite of SaaS and data solutions for those same businesses,  including point of sale, logistics, wholesale, and ordering solutions.

The financials

From 2014 to 2020, revenues grew at a compounded annual rate of 35% as gross margins expanded from 92%-95%.

However, topline growth from 2019 to 2020 was only 12.1% compared to 42.2% the prior year.

In 2020, the company generated $162 million in sales with $39 million in net income and adjusted EBITDA of $43 million.

With 147 million shares outstanding, that translates to earnings per share (EPS) of around $0.25, giving the company a price-to-earnings ratio (P/E) ratio of just below 80x.

That’s not exactly cheap. But considering most of SPACs and IPOs don’t turn a profit for years, it’s not too shabby.

Our hot take

Their business is pretty straightforward and easy to understand.

We just don’t have clear information about their growth strategy.

Without that, it’s tough to value the company properly.

However, it’s an interesting speculative play that’s certainly worth keeping an eye on when they next report out.

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