In this photo illustration, Clubhouse Media Group Inc’s stock market charts are displayed on a smartphone with a Clubhouse Media Group logo in the background.
Igor Golovniov | LightRocket | Getty Images
It was a phrase that was uttered countless times in the era of the Zoom meetings. But this time it accidentally sent an unknown inventory to new heights: “Can you hear me?”
Elon Musk made his debut in Clubhouse, the audio-only app that has been growing in popularity in recent months, also because Musk had attended this room on the last day of January. Within seconds, the room reached its capacity of 5,000 people. Overflow rooms crowded in to listen to the CEO of Tesla and SpaceX. In the words of the host of the room, Sriram Krishnan, “You pretty much ruined the clubhouse.”
Little did anyone know that Musk’s participation would also spark massive interest in a completely independent company: listed influencer media and marketing firm Clubhouse Media Group, which is not affiliated with the private Andreessen Horowitz-powered audio app that about a year old is old.
At the end of the interview, Musk called the experience “great” and said he didn’t even know about the app a week earlier. It set the interest in Clubhouse ablaze. Google searches for “clubhouse stock” peaked on February 1, the day after Musk spoke. But instead of buying into stocks of the app, retailers found the influencer marketing and media company that operates several influencer mansions. That didn’t stop many of them who bought it because of confusion or who wanted to play the confusion.
Best known for running content creator houses, the shares of Clubhouse Media were already on the rise by this point and were rising due to general app interest. At the close of trading on Monday, the share rose Year to date 472%, trading at $ 13.90 apiece for a market cap of $ 1.3 billion. The stock was highest on February 16 at $ 28.43 per share. Compare that to the $ 2.50 price on Nov. 12 when the company completed its reverse merger for IPO.
From healthcare to influencer management
Clubhouse Media, previously called West of Hudson, was founded last March by CEO Amir Ben-Yohanan, attorney and company president Chris Young and Daisy Keech, a social media influencer with millions of followers who had just left another high profile house brought to life. The company wanted to open its own house that Keech would bring some friends to. Keech has since moved out to focus on their own brands.
A handful of influencers are usually housed in creator villas at all times, serving as a partial agency and partial development, so that they can create ongoing, monetizable content with an opulent background. Instead of paying rent or fees for things like housekeeping, creators often provide promotional content for advertisers or the house itself.
Grouping a handful of influencers also helps them promote and expand their reach. The company said in a January announcement that one of its influencers had increased its Instagram followers from 3.22 million to 5.2 million in just four months, while its TikTok followers from 3.4 million to 6.2 million have risen.
According to Young, Clubhouse Media works with the creators on traditional branded stores and charges a 20% fee. They also create intellectual property that they could license and monetize. For example, creators would create YouTube videos. In one case, Young said that one of their homes was getting enough revenue from Google’s AdSense to pay the rent.
The company also has a kind of venture incubator.
“The idea was either to acquire or start companies or to hold stakes in companies that we could then use to drive top-of-funnel traffic with the help of our marketing arm, which was accessible to influencers,” he said. To date, the company has only committed to a handful of endeavors, including nearly $ 400,000 to begin Lindsay Brewer’s racing career.
The company is also considering how to offer shares to its creators. One developer currently has shares in Clubhouse Media while others are on board, Young said.
The company’s journey to the market was a bit unusual, especially since it was the first content house to do it. Instead of completing an IPO or SPAC, it went public through a reverse merger. The already publicly traded Tongji Healthcare Group took over the company in November, and the Influencer Management Company was in control.
At around the same time, the company requested that its name be changed to Clubhouse Media Group. In addition, the ticker symbol has been changed from “TONJ” to “CMGR”. That change wasn’t made until January 20th when the confusion about which company was which was on the way.
“When we did that [reverse takeover] When we bought this shell, the idea was to always name it after the original name of our house, which was Clubhouse, “said Young, referring to the company’s first creator house in Beverly Hills.
In this photo illustration, the clubhouse logo is displayed on a smartphone screen.
Ravfael Henrique | LightRocket | Getty Images
“It’s a little frustrating”
Timing was particularly bad as the clubhouse social media app opened up to a wider audience and expanded from its once-knit group of Silicon Valley investors and celebrities like Oprah Winfrey and Jared Leto. It was downloaded 12.7 million times on March 14, according to App Annie, a mobile data and analytics company.
“It’s a little frustrating,” Young told CNBC in a video call earlier this month. “It’s a strange situation this year because last year we were so used to being the clubhouse and nobody knew anything about the clubhouse app. This year everyone was talking about the clubhouse app, and there is confusion. “
“We have obviously tried our best to avoid confusion. We have made public statements. We want to make sure shareholders are not confused: we are not affiliated with them at all. We are a different company,” he added.
Young said Clubhouse Media still has enough media value and exposure to continue its clubhouse name despite the confusion. The question also arises of whether the app can survive after the pandemic.
“I think we were the first to be publicly active all over the internet with a lot of press and honestly I don’t know where the Clubhouse app is going,” he said. “There will be a lot of competition in the room. There will be 30 other competitors in the audio room; they can survive, they can’t.”
The app spokesperson and Andreessen Horowitz did not respond to requests for comments on confusion.
What’s next for Clubhouse Media?
Creator houses are not a new concept, as the New York Times reported last January, although it does seem like a new generation is rapidly emerging alongside the rise of TikTok.
Still, Clubhouse Media needs to work to convince investors that helping influencers is a viable business.
For the years ended December 31, 2020 and December 31, 2019, the company reported net losses of $ 2,565,409 and $ 74,764, and negative cash flow from operations of $ 1,955,239 and $ 30,488, respectively.
“There are significant doubts about Clubhouse Media’s ability to continue as a company due to its historical recurring losses and negative cash flows from operations, as well as its reliance on private equity and financing,” the company said in a March 15, 2010 report Submission. The company continues to expect losses and negative cash flow for the foreseeable future.
Young said earlier this month that over the next year the company will focus on building a more robust and diverse revenue model. This could mean acquiring companies from social media to software companies like digital agencies that handle branded businesses or software platforms that influencers can use to generate additional income.
Most recently, Clubhouse Media acquired The Tinder Blog, a popular meme site with 4.2 million Instagram followers, for an undisclosed amount. In a press release announcing the deal, the company said aggregator accounts like the blog “make for highly sustainable and scalable companies that complement our mission and portfolio.”
Clubhouse Media could also begin expanding its reach of content houses, announcing in a filing this month that it intends to add two to four houses each year. Young said the company is currently looking to Miami. Austin, Texas; Scottsdale, Arizona; and Nashville, Tennessee, though nothing is set in stone. It could also venture internationally to Dubai and Bali. The company now operates a total of five homes in California, Las Vegas, and Europe with a large number of residents.
Ultimately, said Young, he wants to break the confusion and establish Clubhouse Media as a successful company in its own right.
“It is important to know that we are a company that has been up and running for a year and has big ambitions. I think a platform to really be one of the few publicly traded companies that invests.” in a diverse portfolio in social media, “he said.
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