Central Wireless Inc (OTCMKTS:CWIR) had charting upward this week and then hit a speed-bump this morning. The company sits now up 56% for the week. CWIR has been a company we have been interested in and we last wrote about their acquisition of American Trucking company, but let’s now take a complete look at their business model.
“So what exactly is our business model? We’re an acquisition holding company that will purchase private operating businesses with annual revenues of between $5 million to around $30 million,” the CEO said in a corporate letter in September. “These businesses will become wholly owned subsidiaries of CWIR, the parent company. I do believe this may be the first time that a microcap pink sheet listed company purchased a business many times its current market cap. We look for management teams that want to work together with us, as a team, to grow and expand the business. They will be able to focus on executing the business while we focus on investments, capital markets, investor relations and regulations. At some point in the future, be it two or three years, depending on the market environment, we’ll consider spinning subsidiary off. As a current shareholder during that time, you will also receive shares in that entity. If you ask me where we see ourselves in five years, I would say that we would like to have ten to fifteen subsidiaries under our umbrella at all times and spinning off or selling four or five each year.”
Central Wireless Inc (OTCMKTS:CWIR) formerly National Corporate Systems, Inc., is a development-stage company. The Company is seeking a business combination with a qualified candidate with greater than minimal or no assets. The Company is also seeking to acquire an ongoing business or asset that it can develop. The Company focuses on a business incubator model. The Company offers capital and business resources, such as office space, and access to services, such as accountants, lawyers, technical professionals and networking connections, through its staff and other entrepreneurs in its incubator program. The Company also offers mentorship and networking. The Company focuses on investing in various companies for prototypes or proof of concepts.
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Here is another useful quote from the same letter that offers some explanation about what types of acquisitions the company might be targeting in the future:
“We like the financial industry, Community banks, advisories, wealth management. Being able to accumulate assets under management will improve our ability to self-fund additional acquisitions. Back in 2006-2007 Ray and I were putting together an investment fund to roll up community banks when the purchase prices were at 1 times book value. Unfortunately, the market crashed and we put things on hold. Certain geographic regions of the entertainment industry have tremendous growth possibilities. For instance China’s middle class is growing at a staggering rate. China has been building cinema screens at a rate of over 10 a day for the past five years, rising to 27 a day this year. Production companies with emerging market focus are good fits with very high profit margins. This will also give us a nice platform for branding and public relations.”
Central Wireless Inc (OTCMKTS:CWIR) has a market cap of $18.96M and 1.95B shares out. This company is worth watching and should make some interesting moves before the year is out. We will be following up with an update soon. Sign-up for continuing coverage on shares of $CWIR stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: We hold no position in $CWIR, either long or short, and we have not been compensated for this article.