Mogo rises as Fidelity, Wekerle pass 10% holdings mark

Vancouver-based Mogo’s (Mogo Stock Quote, Chart, News: TSX:MOGO) stock has been in recovery mode since October. Now investors are getting some clues as to who has been mopping up shares of the next-gen finance player.

According to a SEDAR reported issued today, Mike Wekerle, star of TV’s “Dragons Den” and chair of publicly traded merchant bank Difference Capital purchased 100,000 shares of Mogo on November 25 at a price of $2.05 a share.

Wekerle now owns 1,568,400 Shares directly and Difference Capital Financial holds 283,543 Shares directly for a total of 1,851,943 Shares, or 10.13 per cent of all of Mogo’s issued and outstanding shares.

Wekerle joins Fidelity in owning more than 10 per cent of Mogo. On August 2, the U.S.-based firm purchased 158,600 shares, pushing it to 1,952,590 common shares, or 10.68% of the outstanding shares.

Mogo’s nascent recovery has been helped out by improving numbers. Earlier this month, the company reported its first-ever EBITDA positive quarter, as its Q3 revenue rose to $12.6-million, nine per cent better than the same period last year.

“In the third quarter, the three key pillars of our strategy — platform, products, and brand — came together to drive a significant increase in new members and our first quarter of positive adjusted EBITDA since our [initial public offering],” said CEO David Feller. “We launched our new digital account and mobile app, which truly showcase the power of our technology to deliver a great digital experience. We also launched our new free monthly credit score monitoring product and harnessed the reach of our Postmedia partnership. The result was a record number of new members. The increase in our members grew by three times over the second quarter, and, last month, we surpassed 300,000 members, putting us on target to reach our goal of one million members in the next three years.”

M Partners analyst Steven Salz thinks there is still plenty of upside in Mogo. In a report earlier this month in which he maintained his “Buy” rating and one-year price target of $3.00 on the stock (implying a return of 59 per cent at the time of publication), Salz said the company’s shift in focus away from being a pure lender, and the broadening of its product base to include fee-based mortgage and pre-paid card products, was paying dividends.

“Steady top line growth, combined with ~$1M in marketing savings from the Postmedia partnership enabled Mogo to achieve its first EBITDA positive quarter in company history,” said Salz. “We note that this accomplishment is not significant for a traditional lender; however it marks a step towards becoming net income positive with the launch of the upcoming fee-based products, as well as in a downside case from shifting to a pure lender.”

At press time, shares of Mogo were up 4.5 per cent to $2.09.

Disclosure: Mogo is an annual sponsor of Cantech Letter.