Deutsche Bank announced today that it has begun tracking the performance of mobile content provider Motricity. It started the company with a “Buy” rating – meaning Deutsche Bank thinks new investors should buy Motricity shares, and existing investors should by more shares.
What’s the story?
Motricity handles mobile content – it manages and delivers content through white label portals. It’s also very, very good at what it does, and has contracts with all the US Big Four: Verizon, ATT, T-Mobile and Sprint. And the US isn’t the only market Motricity works in – it has offices in the UK, the Netherlands, Indonesia and Singapore.
It had some bad news a month ago, when its Initial Public Offering didn’t do as well as hoped. The company hoped to raise over $100 million, and expected shares to price at $14 – $16. The final tally was around $50 million, and shares priced at $10. After that poor performance, share price dropped even further – rating at just over $8 on Nasdaq today.
So the decisions of Deutsche Bank have come at a good time for the company. Not only has Deutsche Bank given it the “Buy” rating, but it has also set its share price at $15.
What we think?
The reasons that Deutsche Bank started Motricity this way are the most interesting part of this story. Because Motricity has a strong presence in a growing market, it got a good rating. But it’s worth checking out what other sources are saying. Over on 24/7 Wall St., it’s reported that Goldman Sachs rates it as “neutral”.