CardCash.com Pulls off Massive Turnaround in Ramp Up to RSTN Nasdaq Uplisting

For a little while now, RDE, Inc [OTC: RSTN] has been showing up hot on my radar. And it appears I’m not the only one who’s getting the signal.

Just last month, we caught wind of Todd Boehly’s big buy of RSTN stock to the tune of 2.7 million shares, nabbing him an 11.8% stake in the company.

And let’s not forget Kevin Harrington’s big-time RSTN endorsement just ahead of the Boehly news. And yes, it’s that Kevin Harrington — the original Shark Tank shark Kevin Harrington.

Now, I know what you’re thinking right about here — what’s got me, Todd, and Kevin so interested in RSTN?

If you asked me a couple of days ago, the answer to that would have come in two parts. But today, that answer now has a third component.

Let’s start from the beginning.

First, RSTN recently acquired the popular gift card exchange platform CardCash.com. This move got the wheels rolling on a massive M&A story that we predicted would have a big impact on shareholder value.

Second, RSTN is currently an OTC-listed company that’s gearing up for a potential Nasdaq Capital Markets uplisting. The application’s already in, so if all goes well, we expect to see that happen this year. And if history is any indication, this will give the stock a major bump in price.

And last, but definitely not least, that would be this week’s RDE, Inc. financial results. In a single, understated sentence, things are 100% headed in the right direction.

A Little Bit About CardCash.com and RDE, Inc [OTC: RSTN]

For those of you who are late to the party, RDE, Inc [OTC: RSTN] is the parent company behind the popular gift card and voucher brands CardCash.com and Restaurant.com. For more details about Restaurant.com, take a look at this overview of its hot new restaurant app. And as for CardCash.com, read on.

Now, as you might have picked up, CardCash.com is the most recent addition to its portfolio.

As for what CardCash.com is, the simplest explanation is that it’s a gift card exchange platform where people and businesses can buy and sell gift cards.

In its most basic incarnation, CardCash.com is a place where consumers can sell any unwanted gift cards in exchange for cold hard cash. The only catch is, consumers selling their cards won’t get full face value.

The upside to this, of course, is that the consumers buying those same gift cards through CardCash.com benefit from significant discounts to full face value.

In the middle of all this sits CardCash.com, which facilitates the whole exchange and takes a small cut in return.

Now, already, we have a pretty solid business. After all, unwanted gift cards are, quite literally, a multi-billion dollar blight on the American economy each and every year. And yes, you read that right — unwanted gift cards are a multi-billion dollar problem.

The secret life of gift cards: Here’s what happens to the billions that go unspent each year https://t.co/onpWIICZdP

— The Associated Press (@AP) December 31, 2023

But over the years, CardCash.com has evolved a lot. Notably, this has seen it expand its platform services into the B2B market. Now it’s able to offer everything from employee rewards programs to instant gift card exchanges that allow consumers to spend any gift card with any retailer that’s using the CardCash.com platform.

Of course, as solid as the business is, there is one downside. Acting as a gift card exchange is necessarily a low-margin business.

Now, this isn’t a real problem. Retail in general is low margin, and plenty of businesses make a lot of shareholders very happy despite this. Amazon.com [NASDAQ: AMZN], anyone?

However, making those shareholders happy does need a steady hand on the helm. Otherwise, thin margins soon turn into big losses.

This is exactly what happened with CardCash.com in 2022, when big operating expenses and an outsized cost of sales bill got out of hand, leaving the company with an $8.3 million net loss to swallow.

However, times change, and 2023 was a big year for CardCash.com in two ways.

First, 2023 was when RDE, Inc [OTC: RSTN] acquired the business. And second, 2023 was the year CardCash.com finally pretty much broke even.

Now, technically, CardCash.com didn’t break even in 2023. However, compared to its $8.3 million net loss in 2022, only coming up $125k short over the same period in 2023 is quite the turnaround.

And it’s basically nothing (well, 0.14% to be precise) when you compare it to the 86.6 million in sales CardCash.com delivered over this period.

And things are only looking up from here.

How CardCash.com Pulled Off Its Massive Turnaround

When it comes to boosting the bottom line in what is effectively a retail business, there are a couple of options.

The first is to go chasing additional sales. But this isn’t always the best path forward when you’re starting on the back foot. Additional sales often come with additional costs. Especially when that business deals in fungible commodities like gift cards. Either you up your marketing spend to get more people through your doors. Or you drop prices and deal with even tighter margins.

The other option, of course, is to focus on margins. Here, the most direct route is to get your cost of sales down. And that’s exactly what CardCash.com did.

The result of this was a solid boost in gross profit in 2023, hitting 12.05% for the full year compared with 10.8% in 2022.

This combined with a few other tweaks — including a $2.6 million cut in operating expenses — to deliver one of the turnaround stories of the year.

Here’s What’s Got Kevin Harrington, Todd Boehly and I Excited in 2024

Of course, 2023 is old news now. And as they say, past results are no guarantee of future results.  So why are Todd, Kevin, and I only just getting excited about this now?

Well, for starters, RDE, Inc [OTC: RSTN] remains a heavily undervalued company to this day. For reference, we estimated it to be worth around about $250 million last year. And, at the time, it had a market cap of about $40 million.

Today, things have changed a little. That market cap is now up to about $60 million. But the original valuation remains the same. So let me repeat it, RSTN is a $250 million company, giving it just a little over a 4x upside before it hits fair market value.

Now combine this with the RSTN Nasdaq uplisting news we mentioned earlier. This is big because it will bring a ton more eyes to the company, which is currently OTC listed. And, as the efficient market hypothesis would suggest, all those additional eyes will result in a sharp correction in RSTN’s stock price.

But going beyond this, RDE, Inc [OTC: RSTN] is, quite simply, a company that gives us a lot of reason to believe in it. Over the years, it’s grown its Restaurant.com platform into a really solid business. And when news came of its CardCash.com acquisition last year, things just made a whole lot of sense.

So much sense, in fact, that it’s one of the better M&A deals we’ve seen in a while. To cut a long story short, with RSTN now at the reins of CardCash.com, we expect to see two big things happen this year that will both act to turn CardCash.com into a seriously profitable concern:

• Increasingly streamlined operations as RSTN merges redundancies across its Restaurant.com and CardCash.com businesses. With both businesses operating very similar platforms, we expect to see a big impact on this front over the course of this year.
• A big boost in sales once cross-promotions across CardCash.com and Restaurant.com kick in. Again, these are similar businesses, meaning there’s a massive customer affinity from one brand to the next. When RSTN activates cross-promotional activity this year, expect to see a big incremental sales bump that will basically come for free (i.e., zero marketing spend).

There is, of course, a bit more to this story than those two bullet points above. (There’s a better run down of the RSTN CardCash.com acquisition here.)

However, it gives us enough to finally put a finger on exactly what’s got some seriously knowledgable investors so keen on RDE, Inc [OTC: RSTN]. To recap:

• RDE, Inc [OTC: RSTN] shares are currently massively undervalued.
• Nasdaq uplisting will prompt a sharp correction to this.
• Expected improvements in the CardCash.com business will boost its current fair market value even higher.

In short, either get in now or keep a very close eye on RDE, Inc [OTC: RSTN] in the months to come.

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(Featured image by Denise Chan via Unsplash)

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