SeaChange International (NASDAQ: SEAC) caught investor’s attention with rumors about a reverse merger with TikTok rival – Triller. Speculation has led to a 127% increase in SEAC stock price over the past week as a result, which is good news for SEAC – a leading streaming service and video delivery provider. SEAC is focusing its efforts on capturing a larger share of the market, scaling, and creating value for its consumers. Although the Triller merger has not been confirmed, SEAC has a lot to gain if it proves true – as do SEAC’s shareholders.
At the moment, rumors of a reverse merger with the $1.25 billion company – Triller – are flying. As a social-video AI powered platform, Triller is largely seen as TikTok’s rival because it allows users to create videos using filters and music. With more than 250 million downloads, the platform has many famous users including former US President Donald J. Trump, Justin Bieber, and Alicia Keys.
So far, both companies have refused to comment on these rumors, however if the rumors were a hoax many believe they would have denied them immediately. Instead, SEAC’s CEO – Peter Aquino – said he would “not be addressing any rumors related to any SEAC transaction that is circulating in the news”. During the company’s Q3 Earnings call he added that “it’s not appropriate for us to provide any commentary today” which may be because the SEC must approve any merger before it being finalized.
While Triller has explored the possibility of going public in the past, a merger with SEAC could be a major catalyst for the company. With its latest quarterly report showing over $17 million cash on hand, the company seems more than capable of achieving its strategic long-term goals. However, SEAC offers a portfolio of primarily three products: a cable video delivery platform, an advertising platform, and StreamVid – a cloud-based OTT video platform .
Although, SEAC’s cable video delivery platform is essentially a video management system aimed to provide long-term value to global cable companies – the service may experience dwindling usefulness given streaming services’ growing share of the market.
Which may be why SEAC is focusing on its streaming platform – Streamvid – which helps content owners and operators release their content and monetize it while establishing a direct relationship with their subscribers. This ties into its “Advanced Advertising Platform” because “ad selection and customization in the streaming world can maximize channel real estate and provide real-time data” for SEAC’s customers to monetize.
On this note, SEAC has decided to renew its contract with one of the largest multiple-system-operators in the country. The multi-million-dollar renewal contract is expected to add to the company’s high margin revenue for the next two years. According to SEAC’s CEO – Peter Aquino – this contract was secured because the company’s “superior software solutions go hand-in-hand with our proven customer engagement model”.
It appears that SEAC has big plans for 2022, as the company seeks to grow “organically or by considering strategic initiatives” and believes that it “can accelerate our ability to capture future growth opportunities with others through scale.” With this in mind, SEAC will likely continue to build on its newest product –Xstream – which is being repurposed and aimed at the smart TV industry as well as its Streamvid service. Whether, Triller has a role to play in the company’s future remains to be seen, but SEAC stock certainly has benefited from the possibility.
Looks like SEAC’s run might not be through and investors like @greatstockpicks is taking advantage of the dip in preparation.
Following a 127% increase over the past week, SEAC stock is currently trading at its support near $1.78 with a new resistance at $2.20 and a primary support around $1.47. It also shows a stronger support at $0.67. RSI is at 51 while accumulation remains strong. The MACD is bearish at the moment but the fact that SEAC has maintained its increased PPS is a bullish sign for investors looking to benefit from these rumors. On the other hand, if the merger is confirmed then SEAC stock price could return to its pre-pandemic price of $3.50 or more in the rush.
Should you Buy?
SEAC has proven itself to be a reliable software development company for over 25 years and its possible merger with a $1.25 billion company has given SEAC considerable momentum which is reflected in its 127% increase over the past week. Although this could be a risky investment depending on whether the merger rumor proves true, the potential upside if correct makes SEAC a tempting trade.
But, traders could make considerable gains as long as the momentum behind this rumor is maintained. Still, if SEAC or Triller’s management denies the merger there could be a steep sell off which presents considerable risk.
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