In this photo illustration, the stock market graphs of Clubhouse Media Group Inc are displayed on a smartphone with a Clubhouse Media Group logo in the background.
Igor Golovniov | LightRocket | Getty Images
It was a phrase uttered countless times during the era of Zoom meetings. But this time it accidentally sent an unknown stock to new heights: “Can you hear me?”
Elon Musk makes his debut on Clubhouse, the only audio app that has become popular in recent months, in part because of Musk’s participation in the room on the last day of January. Within seconds, the room reached its capacity of 5,000 people. Overflow chambers crowded to listen to the CEO of Tesla and SpaceX. In the words of the room’s host Sriram Krishnan, “You broke the clubhouse properly.”
Little did anyone know that Musk’s participation would also spark a huge interest in a completely unrelated company: the listed media and marketing firm Clubhouse Media Group, which is not affiliated with the private, Andreessen Horowitz-backed audio app . old.
At the end of the interview, Musk calls the experience ‘awesome’ and says he didn’t even know about the app a week before. This sparked interest in the clubhouse. Google searches for ‘clubhouse stock’ peaked on February 1, the day Musk spoke. But instead of buying shares in the app, retailers have found the influencer marketing and media industry that runs several influencer mansions. This did not stop many of them, who either bought it due to confusion or wanted to play the confusion.
Shares of Clubhouse Media, which is best known for producing content creator houses, have already risen at this point, with general interest in the app. At the close of Monday, the stock is higher 472% so far this year, at $ 13.90 apiece, bringing its market capitalization to $ 1.3 billion. At its peak, the stock traded at $ 28.43 a share on Feb. 16. Compare that to its $ 2.50 price on November 12 when the company completed its reverse merger.
From healthcare to influencer management
Clubhouse Media (formerly West of Hudson) was launched in March last year by Amir Ben-Yohanan, CEO, lawyer and company president Chris Young and Daisy Keech, a social media influencer with millions of followers who fit another high profile house left. The company wanted to start its own home, to which Keech would bring some friends. (Keech, meanwhile, has moved on to focus on her own brands.)
Creators’ homes usually house a handful of influencers at any given time, serving as a share agency and a partially extended range, so that they can make continuous, earnings with a lavish background. Instead of paying rent or fees for things like housekeeping, creators often provide advertising providers or the home itself.
By grouping a handful of influencers, they also help promote and expand their reach. The company said in January that one of its influencers had grown their Instagram followers to 5.2 million from 3.22 million in just four months, while their TikTok followers jumped to 3.2 million from 3.4 million .
Young said Clubhouse Media works with the creators on traditional brand offerings and pays a 20% fee. They also create intellectual property that they can license and earn. So, for example, creators would make YouTube videos. In one case, Young said one of their homes earned enough revenue from Google’s AdSense to pay rent.
The company also has a kind of enterprise incubator.
“The idea was to acquire or start companies, or to own shares in companies, after which we could use our marketing arm, which was our reach of influencers to drive the traffic from the best funnel,” he said. So far, the company has only dedicated to a handful of businesses, including nearly $ 400,000 to house the Lindsay Brewer racing career.
The company is also figuring out how to offer shares to its creators. At the moment, one creator has shares in Clubhouse Media, while more are on board, Young said.
The company’s journey to market was a bit unusual, especially since it was the first content house to do so. Instead of completing an IPO or SPAC, it was announced through a reverse merger. The already public Tongji Healthcare Group acquired the company in November, and the influence management business was left in charge.
Around the same time, the company applied to change its name to Clubhouse Media Group. It also changed its symbol for symptoms to ‘CMGR’ from ‘TONJ’. The change only came through on January 20, when the confusion over which company was well on its way.
‘When we [reverse takeover] when we bought that shell, the idea was to always name it after the original name of our house, which was Clubhouse, ‘Young said, referring to the company’s first creative house in Beverly Hills.
In this photo illustration, the Clubhouse logo is seen on a smartphone screen.
Ravfael Henrique | LightRocket | Getty Images
‘It’s a little frustrating’
The timing was particularly weak, as Clubhouse’s social media app opened to a wider audience and expanded from its once close-knit group of Silicon Valley investors and celebrities, such as Oprah Winfrey and Jared Leto. According to mobile data and analytics firm App Annie, it has been downloaded 12.7 million times since March 14.
“It’s a little frustrating,” Young told CNBC in a video call earlier this month. ‘It’s a strange situation this year because we were so used to being the clubhouse last year and nobody knew about the clubhouse app. This year, it’s kind of got everyone talking about the clubhouse app and there’s confusion. ‘
“Of course we have tried our best to avoid confusion. We have issued public statements, we want to make sure shareholders are not confused. We have no connection with them at all. We are a different company,” he said. added.
Young said Clubhouse Media still has enough media value and presence to continue with its clubhouse name despite the confusion. There is also the question of whether the app can survive the pandemic.
“I believe we were the first to be active all over the internet with a lot of printing, and honestly, I do not know where the Clubhouse app is going,” he said. “There’s going to be a lot of competition in space, there are going to be another 30 competitors in the sound space, whether they can survive or not.”
App spokespersons and Andreessen Horowitz did not respond to requests for comment on the mix.
What’s next for Clubhouse Media?
Creator houses are not a new concept, as the New York Times reported last January, although a new generation seems to be emerging rapidly, along with the rise of TikTok.
Still, Clubhouse Media will have to work to convince investors that influencing support is a viable business.
For the financial year ended December 31, 2020 and 2019, the company reported net losses of $ 2,565,409 and $ 74,764, respectively, and negative cash flows from operating activities of $ 1,955,239 and $ 30,488, respectively.
“There are serious doubts about Clubhouse Media’s ability to continue as a going concern due to its historically recurring losses and negative cash flow from operations, as well as their reliance on private equity and financing,” the company said in a statement. said on March 15 -K filing. The company expects to continue to report losses and negative cash flow in the foreseeable future, he added.
Young said earlier this month that the company will spend next year building a more robust and diverse revenue model. This can be, from acquiring companies in social media to software companies, such as digital agencies that run brand offerings, or software platforms that allow influencers to generate additional revenue.
Recently, Clubhouse Media acquired ‘The Tinder Blog’, a popular meme page with 4.2 million Instagram followers, for an undisclosed amount. In a press release announcing the deal, the company said that collection accounts such as the blog “provide an extremely sustainable and scalable business that complements our mission and portfolio.”
Clubhouse Media may also start expanding its range of content houses and said in a submission this month that it plans to add two to four houses each year. Young said the company is currently looking at Miami; Austin, Texas; Scottsdale, Arizona; and Nashville, Tennessee, though nothing lies in stone. It could also venture internationally to Dubai and Bali. The company currently operates five homes in California, Las Vegas and Europe, varying in population.
Eventually, Young said he wanted to move beyond the confusion and establish Clubhouse Media as his own successful business.
‘It’s important to know that we are a business that operates. We’re been running for a year now and we have big aspirations and I think a platform to really be one of the few companies that are traded in public. in a diverse portfolio in the social media space, ‘he said.
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