Mitula Group Ltd [ASX:MUA] continues its downward spiral, with their shares dropping 14.55%.
Their shares have constantly been on the drop since mid-2017, and appear to be struggling on a consistent basis.
Their market cap sits at around $101 million and enterprise value at around $107 million. It seems that Mitula are going through a struggle, and may see trying times ahead.
Why the consistent drop?
Mitula’s stock dive has been present all throughout the second half of 2017 and going into the earlier stage of this year.
There doesn’t seem to be any definitive reason why Mitula is struggling, but it may have to do with its hard-hitting competitors.
Mitula acts as a search engine, similar to Google and Bing. Mitula generates revenue from site visits and how often people use its platform.
Most people have not heard of Mitula, as they constantly flock to Google to obtain the most relevant sources of information. Mitula’s platform may be accessible, but it’s vastly unknown.
As a result, they may be focused on building their brand, spending money on marketing and recognition amongst the public.
Mitula solely rely on monetised visits. It may be a possible that some of their sponsors made the decision to burn bridges with Mitula and took their business elsewhere.
What does the future hold for Mitula?
Despite their consistent drop in share price, research indicates that Mitula plan for an increase in revenue and have been gunning to do so since 2017.
Since their launch in 2009, they have been consistently expanding their platform across different sites, opening up new forms of searchability and prioritising amongst users.
They may be focusing on expanding, while further increasing their brands recognition across their online platform.
Dealing with Google won’t be easy, but with the right marketing techniques and proper funding, they could prove to be a worthy competitor to larger search engines.
According to research, Mitula wish to take care of their investors. Their high institutional ownership allows investors to avoid financial complications, creating a barrier of safety.
Overall, their business model has not really changed since their launch.
They seem to be sticking with their guns, and are persistent about expanding their brand.
For the most part it looks as if they are doing reasonably well, as they have stood the test of time and seem to still be growing, despite their drop in share value.
Publisher, Markets & Money
PS: Mitula could see themselves going through further struggles if a recession hits. Luckily, Greg from Markets & Money has written a free article titled ‘The Aussie Recession Survival Guide’, which will prepare you in the event of a sudden recession.