Magic Wheels Corporation has come up with perhaps the slickest new idea in toys since the invention of the hula hoop. The recently founded company plans to develop, manufacture, and market the worldâ€™s first radio-controlled toy car that will climb vertical walls and even run on ceilings. How does it work? The company will only say so much, but they currently have a patent pending on the groundbreaking climbing device technology, and claim to already have a working prototype which they plan to turn into a full-fledged retail product.
The potential market power of such a device is hard to exaggerate. As any parent will tell you, kids rapidly get bored with even the most expensive radio controlled toy vehicles. After all, they go forward, backward, left, right, and thatâ€™s about it. Beyond tormenting the pet cat or dog, the combination of things to do runs thin very quickly. But providing a vertical component adds an entirely new dimension to the list of possibilities.
Magic Wheels holds exclusive sublicensing, marketing, and patent-pending rights for the technology, and, as such, holds a key to one of the most promising categories in the entire $67 billion global toy market. Toy vehicles account for 10% of all toy revenues in the U.S. and continue to experience one of the biggest growth rates. As a result, the companyâ€™s annual sales goal of $21 million within 5 years is no empty dream, and initial investment money has already begun to move in. To date, approximately $300,000 has been invested in connection with the product, and the company has recently completed an initial public offering of 2 million shares, which increases the total number of shares outstanding to 10 million.
Although it is expected to take a couple of years for revenue to overtake initial costs, the effect on share price of such a successful product introduction would be huge. Letâ€™s just say that if final product development and introduction go as expected, their little toy car wonâ€™t be the only thing that goes vertical.
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