Making the jump into the world’s most lucrative market for investment opportunities, financial commentary company Equity Story (ASX: EQS) has made the big leap into the United States market having secured SEC approval to operate its advice and investor education services.
International expansion has been facilitated by the United States Securities Exchange Commission (SEC) approving Equity Story USA as a registered Investment Advisor Firm. With this licensing, Equity Story will be able to provide subscription based equities trading general advice, research insights, and investor education services to US Residents. This will be very similar to the business established in Australia where Equity Story has been offering investment advice and education around investing on the ASX.
“SEC registration is an important milestone for the Company’s future progress, and the key regulatory approval required to enable Equity Story to offer our content, podcasts and training courses to Americans,” said Equity Story CEO, Trent McGraw.
“This also consolidates the Company’s long term strategy to build a fully-licensed financial content platform across a number of international markets. Equity Story is now better positioned to execute our growth initiatives.”
Unlike trading platforms that have been copping a beating lately due to a price war to the bottom on brokerage fees, Equity Story’s revenue stream comes from paid subscriptions for their investment recommendations while new investors can also purchase online education courses to learn how to commence their investment journey into the world of equities.
Such education courses sell for approximately $2,000 while their annual subscriptions start from $1,500 and include daily podcasts and trading ideas, as well as a weekly ‘Hot Stock’ selection.
The Company was first established in 2007 before publicly listing on the ASX in May 2022 when raising $4.5m at an Offer Price of $0.20 per share. According to the IPO Prospectus, the Company had 1,200 paying subscribers in January 2022 as well as a database of 40,000 interested investors on their database which are marketed as Equity Story investor services.
In addition to these services, the Company also operates its Equity Story Growth Fund which had $5 million in Funds Under Management at the time of listing.
Between all of these services, Equity Story reported $1.14m revenue in FY21 with a net loss of $420k.
Funds raised from their IPO will be applied towards their expansion into the United States where Equity Story will seek to operate a similar service as their Australian business, but with access to a much larger addressable market.
According to the ASX 2020 Australian Investor Study, it was estimated that 6.6 million Australians hold listed equity investments independent of their superannuation, approximately 27% of the population. In comparison, 58% of Americans reported that they own stock, based on Gallup’s April 2022 Economy and Personal Finance survey. This 2022 data was higher than the 56% measured in 2021 and 55% measured in 2020 where major improvements in technology have made share trading much more accessible and much cheaper to retail (mum and dad) investors.
The data translates into approximately 144 million Americans owning stocks which represents roughly 21 times the size of the Australian market.
Initially, Equity Story will launch its US operations out of its Sydney office with plans to commence its US-based services in early 2023.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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