In the midst of the pandemic, BlackBoxStocks has been seeing rapid growth and it hopes to use that to help propel it to the Nasdaq.
Already traded on the OTC Markets, the Dallas-based stock analytics and social media platform reported in Q2 growing its subscriber base by 207 percent since the beginning of the year and an increase in total revenue by nearly 220 percent. In all, the company has seen 260 percent year-to-date growth.
“[The pandemic] created a perfect storm for retail trading and we had the right product at the right time,” Eric Pharis, BlackBoxStocks founder, told NTX Inno.
While the company was on a growth trajectory prior to the current crisis, reporting a 61 percent increase in users and an 84% increase in total revenue in Q1, Pharis said it has been helped by lockdown orders and more people working from home.
CEO Gust Kepler said there are currently about 4,200 users on the platform. And he expects to have up to 20,000 within the next year or two. Already, BlackBoxStocks operates in 42 countries and has a team of about 20.
Launched in 2015, BlackBoxStocks has developed a stock and options scanning system that uses predictive AI to simplify the trading process. Kepler describes it as like “Bloomberg meets Twitch.” The software scans markets in real-time sending alerts and other analytical data based on the user.
“We got a big influx of people who didn’t know anything about stocks and so we had to pivot a little bit in our education to add additional education for people that were really new to the market, and that worked really great for us,” Pharis said. “It’s basically like teaching someone to fish. [They’re] skills that you will need to know the rest of your life… you need to understand a little bit about the market.”
Because BlackBoxStocks is designed to accommodate users from beginner to experienced, the platform also offers training courses, from the basics to advanced courses. And to further create a network on its platform, BlackBoxStocks has a social media aspect where vetted users and moderators can share their screens and give off tips on how they trade. Some of the companies BlackBoxStocks counts as its broker partners include TD Ameritrade, E*TRADE and tastyworks.
Kepler said because the system's algorithms are designed to scale with the user's knowledge, along with the social aspect of the platform separate it from others in the market – though he notes that companies like Robinhood have created a buzz among younger generations regarding investing – and have helped it attract users during the pandemic. Pharis said he sees that continuing, as millennials and younger generations move to more personalized forms of wealth management.
“We’ve kind of established ourselves as a very legit player in a very unfortunately shady industry. There’s a lot of really bad people that take advantage of peoples dreams to get rich trading. We’re the antithesis of that. We’re as real as it gets. We don’t make any promises. We teach people what they need to know,” Kepler said.
He also said that recently, BlackBoxStocks deployed its first significant marketing capital this year with the launch of an online ad campaign and online gear store, which Kepler said has also helped drive the company’s growth.
Since its launch, BlackBoxStocks has raised about $2.5 million over two friends and family rounds. Kepler said it is currently working on a new capital raise at a higher valuation than its previous $10 million valuation, which it hopes will allow it to up list from the OTC to the Nasdaq. To help with that, BlackBoxStocks is working on building out its platform to broaden its focus on day and swing traders to also include investment portfolio management systems.
“We’re just scratching the surface of the market that we could be in. We’re starting to really stand out amongst the noise in the market,” Kepler said. “We feel like we’ve got this thing tweaked to where it’s a very effective tool for people.”
