What’s that Motley Fool “Potential 865X Growth” Microcap?

By Travis Johnson, Stock Gumshoe, January 25, 2021

The Motley Fool’s Market Pass service offered up a teaser pitch over the weekend about a new stock that is being recommended by Rich Greifner… here’s how the email got everyone excited:

“It’s less than 24 hours until the market opens, so I’ll get straight to the most exciting story I’ve ever shared in Investor Digest


What’s with this Market Pass service, you ask? It’s sort of a “best of” service, here’s how they describe it in the promo:

“Each year, the Market Pass team reviews all the picks in Stock Advisor and Rule Breakers

“Picks what they believe to be the very best stocks – both individually, and as part of a team…

“Sprinkles in a few ETFs as needed…

“And designs what we consider the ‘ultimate portfolio.’

“It’s meant to be THE one-stop shop for investors looking to take advantage of what Rich and the Market Pass team believe to be the VERY BEST stocks in Stock Advisor and Rule Breakers to build a potentially market-beating portfolio.”

So mostly it’s trying to winnow out some winners from among the Fool’s most popular newsletters, and throw in some other stuff — including the “best small caps for 2021” special report that they’re pitching here, including that “865X Microcap” they hint at… and, of course, it’s a pricey offering, $999 a year with no refunds (the Fool’s “entry level” letters are often sold at $49/yr and typically offer free trials and easy refunds, but, like most publishers, they design their marketing funnel primarily to feed subscribers into much more expensive services that do not offer refunds).

What hints do we get about this latest microcap? Not much, here are the clues…

“… hasn’t been recommended anywhere else at The Motley Fool…”

“This stock’s market cap is under $250 million….

“This company made $19.5 million last year…in a fast-growing online market management believes will grow to an estimated $16.9 billion by 2025. Potential 865x growth?”

And they make some claims about the very profitable business…

“800% ROI per client. That’s right – for every dollar this company spends acquiring new clients, on average they make $8. That’s a simply massive reinvestment opportunity for the company to rapidly scale up in the coming months. (And that’s with this company already being the lowest-cost competitor in its market. If they raise prices, could that ROI grow to 1,000%+ per client?)”

So which little company are we being teased with here?

No definitive answer today, but the closest match we have from the Thinkolator is IZEA (IZEA), which is a small company that has gradually rolled up a bunch of online influencer marketing agencies and providers and software tools over the past 15 years.

How do we match? Well, IZEA had total revenue 19.4 million a year as of the third quarter of 2019, so as of the last quarterly update that would have been “last year.” That was before COVID began to really depress results (though it’s down to $17.6 million as of the most recent four qu