If you don’t want to cut your hand and have to make a trip to the hospital to get stitched up, do not grab the falling knife that is Matterport (NASDAQ:MTTR) and MTTR stock.
Based on how badly the stock is performing, if my name is called to write about the spatial data platform company in March, it might be at $0 by then.
I continue to wonder what is wrong with investors at the moment. Matterport’s innovative digital twinning technology gets it a ride all the way to single digits while Donald Trump’s piece of dung trades above $80.
Wonders never cease.
But seriously, long-time holders of MTTR stock have got to be wondering how much longer the death spiral continues.
Is Matterport ready for the scrap heap? I don’t think so.
MTTR Stock Keeps Falling
The first time I wrote about Matterport was on Dec. 13, 2021. It closed at $22.86. The second time was two days later. Despite the good news about its early warrant redemption, it closed at $22.33 on Dec. 15.
The third time I wrote about Matterport was on Jan. 13. MTTR stock closed at $14.12. Today is my fourth column about the company. Its stock is trading down 6% on the day at $8.23.
I must be bad luck because since I’ve started covering Matterport, it’s lost 64% of its value. As I said, it’s a falling knife if I ever saw one.
I have no idea what it will take to lift its share price at this point. Unfortunately, two recent news pieces have done little to persuade investors to hop back on the bandwagon.
These Two Pieces of News Couldn’t Hurt
On Jan. 31, Matterport announced it hired Tom Klein as its new Chief Marketing Officer (CMO). CMO’s are vital to growing businesses. Klein did some solid work increasing Mailchimp’s sales, resulting in Intuit (NASDAQ:INTU) paying $12 billion to acquire it in 2021.
“As we continue our rapid pace of innovation and expansion of our global platform, it’s essential that our customers remain the focal point,” said RJ Pittman, Chief Executive Officer of Matterport. “Tom’s tremendous experience scaling brands and driving global adoption to reach the billion-dollar run rate will be instrumental to the massive opportunity in front of us.”
No reaction from the markets.
A few days later, on Feb. 2, Matterport announced that Orangetheory Fitness — it operates more than 1,250 fitness studios in the U.S. alone — would use Matterport Capture Services to digitally twin all of its U.S. studios.
If ever there was a case study for proving its concept to retail investors, this would be it. I’m sure plenty of Orangetheory customers also invests in the markets. So you would think that this news would pique their interest.
“With Matterport digital twins, we become equipped with accurate, reliable data that allows us to improve our studios and better serve our members. Throughout the process, the efficiency and ease of Capture Services saves us thousands of dollars in travel and labor costs,” stated Mike Mettler, Chief Development Officer of Orangetheory Fitness.
That last sentence completely resonates with me.
For years, my wife was a district manager for several well-known retailers. She managed large numbers of stores across Canada and the U.S. East Coast. The amount of flying and driving she did was monumental—all to do way too frequent store walkthroughs.
The fact that Orangetheory recognizes the old way of doing business is dead is a testament to their management. The old command-and-control style doesn’t work. The pandemic proved this.
The Bottom Line
So, first, we see that Matterport hired someone adept at large-scale brand-building, and then it locked in a large consumer fitness brand that wants to do things the new way to better the customer experience.
What am I missing here?
Matterport is doing what it must do to grow its business. Yet investors are giving it a failing grade. Meanwhile, Digital World Acquisition Corp (NASDAQ:DWAC) can do no wrong despite the possibility its main asset — Donald Trump — could face civil fraud charges for inflating and deflating the value of his assets.
My InvestorPlace colleague, Larry Ramer, believes that DWAC and Trump Media are the greatest things since sliced bread. So it doesn’t matter that Trump Media’s Truth Social social media platform brings nothing innovative to the table and will likely lose money for some time.
Ramer sees Truth Social launching — with the help of cash from Digital World and institutional investors — by the end of March. However, a mid-January article by The Washington Post says otherwise. And even when it does get up and running, it will bleed red ink for several years.
But I digress.
Meanwhile, Matterport has an annualized revenue run-rate of $110 million, brings onboard customers such as Orangetheory, and adds thousands of subscribers every month. Yet it trades at one-tenth DWAC’s share price.
Is Matterport ready for the scrap heap? No, it’s not. It’s got a real business, unlike The Donald.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.