No Revenue, No Blockchain, Agree with Culper Research

DatChat, Inc. (NASDAQ: DATS) claims to be a blockchain-based social media platform that allows users to control all of their communications with others. This includes preventing screenshots, deleting entire conversations, and controlling settings on the messages sent. However, upon further inspection, with the help of Culper Research presenting a short report on the company today, I am happy to further support the report and how DATS is far overvalued and does not provide any niche attractions to create growth for users and shareholders.  When reading the prospectus for the company a few days after the IPO, DATS reports misleading information on blockchain-based social media platform, noting that it is currently in development and the roadmap expects it by Q4 2021. There is no current blockchain based social media platform, misleading shareholders unless they read through the SEC Filing or Investor Presentation. Culper Research notes that there are major security flaws in the Android version of DatChat, claiming to allow hackers access to users information and implementing their own information at times.  DATS has no sources of revenue. The balance sheet breakdown is pitiful, lacking major R&D expenses as would be expected for a growth company and no source of revenue similar to a biopharmaceutical company. DATS has struggled to monetize their platform and is not specific in how they want to generate revenue. Culper continues further, saying that they have not generated revenue since inception in 2016. There are a minimal amount of users on the site, with under 100,000 MAUs (Monthly Active Users). For a social media platform, users is the key driver of growth, yet the company cannot attract them, not generating any advertisement expenses and having poor reach to the community. Culper has generously subsidized my research by reporting that the SEC forced DatChat to report their MAUs. The company reported them for the prospectus and has since stopped reporting when filing. After further inspection, an associate that brought DATS onto our radar mentioned the company after just IPO-ing. They then remained in our chat for less than a month. I have experienced a similar occasion on getting caught in a penny stock pump-and-dump with an associate mentioning and then leaving chat. DATS' days are numbered as there is no material backing for the company and no sources of revenue that could support them. Multiple 4/A Insider Trading Reports were filed at the end of September and this past week in October. Filers are preparing to most likely sell these shares when the lockup period ends as Culper notes in November.  Overall, this company is not worth the money and does not have signs of strength or a niche to profit from. I would be warry as investors are irrational and can pump meme stocks, adding DATS to that list and getting burned for shorting. However, in the long run, this company is inefficient and does not provide what they claim. Culper Research has expanded on these points mentioned and I am happy to agree with them after my own research on the company. **This is not endorsement of Culper Research or the information provided by them. I have personally read and analyzed the report and agree on multiple but not all aspects of the report. Culper Research contains claims that I do not make and are not related to my work here** https://culperresearch.com/research-1 

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No Revenue, No Blockchain, Agree with Culper Research

bearish

DatChat, Inc. (NASDAQ: DATS) claims to be a blockchain-based social media platform that allows users to control all of their communications with others. This includes preventing screenshots, deleting entire conversations, and controlling settings on the messages sent.

 

However, upon further inspection, with the help of Culper Research presenting a short report on the company today, I am happy to further support the report and how DATS is far overvalued and does not provide any niche attractions to create growth for users and shareholders. 

 

When reading the prospectus for the company a few days after the IPO, DATS reports misleading information on blockchain-based social media platform, noting that it is currently in development and the roadmap expects it by Q4 2021. There is no current blockchain based social media platform, misleading shareholders unless they read through the SEC Filing or Investor Presentation. Culper Research notes that there are major security flaws in the Android version of DatChat, claiming to allow hackers access to users information and implementing their own information at times. 

 

DATS has no sources of revenue. The balance sheet breakdown is pitiful, lacking major R&D expenses as would be expected for a growth company and no source of revenue similar to a biopharmaceutical company. DATS has struggled to monetize their platform and is not specific in how they want to generate revenue. Culper continues further, saying that they have not generated revenue since inception in 2016.

 

There are a minimal amount of users on the site, with under 100,000 MAUs (Monthly Active Users). For a social media platform, users is the key driver of growth, yet the company cannot attract them, not generating any advertisement expenses and having poor reach to the community. Culper has generously subsidized my research by reporting that the SEC forced DatChat to report their MAUs. The company reported them for the prospectus and has since stopped reporting when filing.

 

After further inspection, an associate that brought DATS onto our radar mentioned the company after just IPO-ing. They then remained in our chat for less than a month. I have experienced a similar occasion on getting caught in a penny stock pump-and-dump with an associate mentioning and then leaving chat. DATS' days are numbered as there is no material backing for the company and no sources of revenue that could support them.

 

Multiple 4/A Insider Trading Reports were filed at the end of September and this past week in October. Filers are preparing to most likely sell these shares when the lockup period ends as Culper notes in November. 

 

Overall, this company is not worth the money and does not have signs of strength or a niche to profit from. I would be warry as investors are irrational and can pump meme stocks, adding DATS to that list and getting burned for shorting. However, in the long run, this company is inefficient and does not provide what they claim. Culper Research has expanded on these points mentioned and I am happy to agree with them after my own research on the company.

 

 

**This is not endorsement of Culper Research or the information provided by them. I have personally read and analyzed the report and agree on multiple but not all aspects of the report. Culper Research contains claims that I do not make and are not related to my work here**

https://culperresearch.com/research-1 

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read-time
3 min

1.00

Target Price

10/ 10

Confidence

6-12 Months

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