Interest in DatChat Inc. (NASDAQ:DATS) has been skyrocketing over the past few weeks as the software company develops its privacy-oriented messaging app. Since its IPO – with an initial offering of $4.15 PPS – the stock has almost quadrupled in price and is now trading at $15.05. As one of today’s leading social media stocks, DATS has been receiving a lot of attention among investors as it increased 82% since October 8th – running up from $8.85 to today’s pre-market price of $16.16.
DATS went public recently in order to accumulate the capital it needs to proceed with its business plan which includes a blockchain-enabled messaging service as a subscription service for enterprise users. Additional features will also be made available to users through in-app purchases.
While there are big competitors in the market of privacy-oriented messaging apps such as Snapchat and Telegram which have 100s of millions of users, DATS has been gaining attention for its orientation towards blockchain. This separates DATS from other social media stocks and shows its potential to become a major player once the platform is hosted on blockchain.
DATS is currently a favorite among investors interested in blockchain and crypto but attention spiked after @realwillmeade tweeted shared that DATS is a potential short squeeze candidate with a short interest of 49.79%.
But DATS is more than just hype, the company’s messaging app provides users with a number of security features such as an anti-screenshot mechanism and automatically deleted messages. It even integrates with existing platforms such as Apple’s iMessage, which dramatically increases its number of potential users. While its features are appealing in a world of security breaches and data privacy issues, the company only has 22,572 monthly active users and DATS has yet to monetize its users to generate a revenue.
However, the company awarded a $1 million managed services contract to IZEA Worldwide, Inc. (NASDAQ: IZEA) which will execute a celebrity influencer campaign for DatChat Messenger. DATS has also finalized an agreement with Barstool Sports, a digital media company that produces content focused on sports and pop-culture. According to the agreement, Barstool Sports will launch a multi-channel, national marketing campaign for DatChat Messenger across its brand and select franchises. If successful, these two campaigns could take DATS to the next level and grow its user base significantly.
Despite no official statements from either company, there is speculation among investors that DATS could be a potential buyout candidate for Microsoft. Facebook’s failed attempt to acquire Discord earlier this year is likely driving this speculation but if these rumors come to fruition, some are predicting a $50 PPS. Social media stocks are major players and the potential for DATS to develop itself and become acquired is a possibility although one that will likely take some time.
@MrZackMorris and many others are bullish on DATS future after securing its media campaign so DATS a good sign.
Trading at $16.04, DATS has a resistance point at 17.71 and a primary support at 13.62 and a secondary support near 11.96. The stock is currently testing a resistance point near 16.08. Accumulation has been witnessing a steep increase lately and the MACD had a bullish crossover almost a week ago but continues trending upward. The RSI is at 77.88 and is significantly overbought, therefore DATS will likely dip before possibly rebounding.
Should You Buy?
Investors are either bullish or bearish on DATS but everyone seems to have an opinion. Bearish investors argue that the market cap is too high for a company of this size and with only a few users. But bullish investors see DATS potential especially after its agreements with IZEA and Barstool Sports. With two nation-wide campaigns on the way and new features to be monetized, DATS could start generating revenue soon. But social media stocks and social media startups are often volatile, but given the significant momentum around DATS, investors could make a short term play if the stock continues its run up to its $17.71 resistance point. Bullish investors who believe in DATS potential could hold it long-term on the chance it hits it big with a social media powerhouse.
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