Tongji Healthcare Group, Inc. (OTCMKTS:TONJ) isn’t a healthcare company. It is actually the ticker for a marketing and consumer brands company with a starting-point reach of over 70 million through its social media influencer vehicle, The Clubhouse.
The story is quite interesting. To our knowledge, it’s basically the only pure-play to focus on putting a massive social-media-based marketing infrastructure at the front of the ticket, with a strong foundation of influencers already established.
That opens up tremendous opportunities, so we thought it would be a good idea to take a closer look.
Turning the Page
After announcing the transition for TONJ in August following news that the company had signed a Share Exchange Agreement to acquire West of Hudson Group Inc, Tongji Healthcare Group, Inc. (OTCMKTS:TONJ) is now nearing its coming out party after announcing last week that the company has taken the initial steps toward changing the Company’s name from “Tongji Healthcare Group, Inc.” to “Clubhouse Media Group, Inc.” and changing the Company’s ticker symbol.
“We have taken the first steps toward effecting our corporate name and ticker symbol changes and are very excited to move forward,” commented Amir Ben-Yohanan, the Company’s CEO.
According to the release, on Aug. 12, 2020, the company announced the signing of a Share Exchange Agreement to acquire West of Hudson Group, Inc. (“WOHG”), the sole owner of “The Clubhouse,” a collection of branded content houses that house some of the most prominent social media influencers. Upon closing of the share exchange, the Company will acquire WOHG, with WOHG becoming a wholly owned subsidiary of the Company. The Company expects that the acquisition would move the Company’s business away from healthcare completely and entirely into social media.
The release also noted that, in addition to filing a certificate of amendment to the company’s articles of incorporation with the Nevada Secretary of State, the company also filed an Issuer company-related Action Notification Form with FINRA regarding the proposed corporate name change and ticker symbol change. The name change and symbol change are subject to review by FINRA and will not be effective until FINRA clears the actions. The company apparently expects that the name-change and symbol change will be effective on or about Nov. 20, 2020.
In other words, the superficial factors in this story are potentially about to be lined up with the explosive underlying story. At that time, we could see this stock catch some serious buzz, which is why we point it out here.
The Back Story
Tongji Healthcare Group, Inc. (OTCMKTS:TONJ), as noted above, is now WOHG, for all practical purposes. And WOHG, as alluded to above, is the sole and singular owner of the Clubhouse, a network of content creation mansions in Southern California housing a collection of some of the most widely followed and talented social media influencers on the planet. According to company materials, the Clubhouse provides residence to influencers who, in aggregate, boast a total base of over 70 million followers.
The real play here is that the Clubhouse also has an in-house talent agency, Doiyen, that effectively owns the rights to capitalize on those 70 million followers to ink lucrative branding and marketing deals with outside brands or to popularize in-house brands created by WOHG.
“The Clubhouse provides a picturesque living environment complete with inhouse photographers and videographers, so we can maximize the depth, breadth, and scale our influencers can build across popular social media platforms while having fun and just being themselves,” commented Ben Yohanan. “Cultivating a large and committed following and then pursuing the popularization of in-house brands has demonstrated stunning recent success as a model. We would point to Kylie Jenner’s Kylie Cosmetics, which was valued at nearly $1.2 billion when it sold a controlling stake to Coty, Inc. last November. That value was built by first cultivating a broad influencer following. With this acquisition, we will have that value to harness.”
The upside of putting the marketing arm ahead of the product specifics is important to appreciate given how the world works today. And the Kylie Jenner reference should be appreciated through that lens. When a company decides to launch a branded product line, the old path was to do market research and then decide on the product, manufacture it, and then invest in trying to market it to the end-market consumer – to tell people how great it is and that they should buy it.
The Clubhouse is a means of driving interest and then figuring out what to popularize after the fact. At this point, TONJ is a stock that contains the already-achieved success of the first piece in this equation, which is the hard part in the grand equation underlying this space.
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