We are not sure why there isn't an "index" for OTC stocks, other than the facts that no one really cares and accurate data is tough to find.
UPDATE: There are no stocks that are really "representative" of the 3400~ issues. So the INDEX is going to be an aggregate of all issues, and their aggregate % change for the year, adjusted for reverse splits etc. If you have any suggestions for improving this "index" please comment. Once we have the data for a year, we will add the % aggregate change in the OTCBB for the previous years (and of course we will keep it current going forward).
Monday, December 14, 2009
Friday, December 4, 2009
OTCBB REFORM
IF you support reform in the OTC marketplace, click here and add your name
http://www.otcbb.ws/supporters.php
http://www.otcbb.ws/supporters.php
Tuesday, November 24, 2009
Things you must know about companies quoted on the OTCBB
1. There are no shareholder approval laws
2. Certain dilutive investment are not reported fully - like PIPES using regulation D exemptions
3. Proceeds from dilutive fund raising is reported as INCOME on the balance sheet
2. Certain dilutive investment are not reported fully - like PIPES using regulation D exemptions
3. Proceeds from dilutive fund raising is reported as INCOME on the balance sheet
Sunday, November 22, 2009
Change?
Yes we can!
1. Is it really possible to change the status quo of fraud and low expectations in the OTC marketplace?
2. Is it really necessary to change the status quo of fraud and caveat emptor, and "that's the way it is" in the OTC marketplace?
My answer is YES! and to all the people who say otherwise, or "why bother?" I say (or quote) the following...
*OVER THE COUNTER, ABOVE BOARD: Fraud, especially in a public market like the OTC capital market is not just an innocent, zero sum game of dumb suckers who "deserve" to lose their money to more sophisticated, smarter people who know the game.. what fraud really does in this case is supply start up capital inefficiently to reward chicanery more than innovation. And we are not talking small numbers either... I believe that countless new companies, solutions, jobs, etc are lost pointlessly and there is finally something that everyone can do to change this fact. I will prove it:)
* Hugh Macleod, How To Be Creative: 5, 08-22-04 Nobody can tell you if what you're doing is good, meaningful or worthwhile. The more compelling the path, the more lonely it is.
* UNKNOWN nothing worthwhile is easy
* UNKNOWN If you keep doing what you’ve always done, you’ll keep getting what you’ve always gotten
* -Confucius "the journey of a thousand miles starts with a single step"
* Walter Sobchak: Smokey, this is not 'Nam. This is bowling. There are rules.
* Walter Sobchak: [shouting] Has the whole world gone crazy? Am I the only one around here who gives a shit about the rules? Mark it zero!
* the starfish story There was once a wise old man who used to go to the ocean to do his writing. One day as he walked along
the shore, he looked down the beach and saw a human figure moving like a dancer. As he got closer, he saw
that it was a young man, and the young man wasn’t dancing, but instead was reaching down to the shore,
picking up starfish, and very gently throwing them into the ocean.
“Good morning! What are you doing?” asked the wise man. The young man paused, looked up, and replied,
“Throwing starfish into the ocean. The sun is rising, and the tide is out. And if I don’t throw them in, they’ll
die.”
“But, young man, don’t you realize that there are miles of beach and thousands of starfish all along it? You
can’t possibly make a difference!”
The young man, listening politely, bent down and picked up another starfish, throwing it into the sea past the
breaking waves. Turning to the old man, he modestly replied,
“It made a difference for that one.”
1. Is it really possible to change the status quo of fraud and low expectations in the OTC marketplace?
2. Is it really necessary to change the status quo of fraud and caveat emptor, and "that's the way it is" in the OTC marketplace?
My answer is YES! and to all the people who say otherwise, or "why bother?" I say (or quote) the following...
*OVER THE COUNTER, ABOVE BOARD: Fraud, especially in a public market like the OTC capital market is not just an innocent, zero sum game of dumb suckers who "deserve" to lose their money to more sophisticated, smarter people who know the game.. what fraud really does in this case is supply start up capital inefficiently to reward chicanery more than innovation. And we are not talking small numbers either... I believe that countless new companies, solutions, jobs, etc are lost pointlessly and there is finally something that everyone can do to change this fact. I will prove it:)
* Hugh Macleod, How To Be Creative: 5, 08-22-04 Nobody can tell you if what you're doing is good, meaningful or worthwhile. The more compelling the path, the more lonely it is.
* UNKNOWN nothing worthwhile is easy
* UNKNOWN If you keep doing what you’ve always done, you’ll keep getting what you’ve always gotten
* -Confucius "the journey of a thousand miles starts with a single step"
* Walter Sobchak: Smokey, this is not 'Nam. This is bowling. There are rules.
* Walter Sobchak: [shouting] Has the whole world gone crazy? Am I the only one around here who gives a shit about the rules? Mark it zero!
* the starfish story There was once a wise old man who used to go to the ocean to do his writing. One day as he walked along
the shore, he looked down the beach and saw a human figure moving like a dancer. As he got closer, he saw
that it was a young man, and the young man wasn’t dancing, but instead was reaching down to the shore,
picking up starfish, and very gently throwing them into the ocean.
“Good morning! What are you doing?” asked the wise man. The young man paused, looked up, and replied,
“Throwing starfish into the ocean. The sun is rising, and the tide is out. And if I don’t throw them in, they’ll
die.”
“But, young man, don’t you realize that there are miles of beach and thousands of starfish all along it? You
can’t possibly make a difference!”
The young man, listening politely, bent down and picked up another starfish, throwing it into the sea past the
breaking waves. Turning to the old man, he modestly replied,
“It made a difference for that one.”
Saturday, November 21, 2009
Who is to blame?
LIVE DRAFT
The same logic that The Big Lebowski used to figure out who kidnapped bunny, can be used to figure out who is benefitting from stock scams, pump and dumps, misleading or untrue press releases and basically anytihng else that causes investors to buy something they shouldn't.
"It's like what Lenin said... you look for the person who will benefit, and, uh, uh..."
So who benefits from these stock sales... is it the companies? the PR firms? the Lenders?
The same logic that The Big Lebowski used to figure out who kidnapped bunny, can be used to figure out who is benefitting from stock scams, pump and dumps, misleading or untrue press releases and basically anytihng else that causes investors to buy something they shouldn't.
"It's like what Lenin said... you look for the person who will benefit, and, uh, uh..."
So who benefits from these stock sales... is it the companies? the PR firms? the Lenders?
Friday, November 20, 2009
Is there a law against hedge funds loaning out shares of companies they lend money to?
Anyone know?
UPDATE 11/24
funds cannot short shares ahead of a pipe
And, the S.E.C. says, it is illegal to use the shares obtained from the PIPE to repay the shares borrowed, since that would amount to having sold the PIPE shares too early.
The investor is supposed to buy other shares to cover the short position, and then sell the PIPE shares separately. If the shares are illiquid, there is a risk that prices will move, leaving the trader with a loss.
In addition, the S.E.C. says, it is illegal insider trading to sell the shares short if the seller knows a PIPE deal is coming, but that fact has not been announced to the public.
but can they loan these shares for a profit so someone else can short?
UPDATE 11/24
funds cannot short shares ahead of a pipe
And, the S.E.C. says, it is illegal to use the shares obtained from the PIPE to repay the shares borrowed, since that would amount to having sold the PIPE shares too early.
The investor is supposed to buy other shares to cover the short position, and then sell the PIPE shares separately. If the shares are illiquid, there is a risk that prices will move, leaving the trader with a loss.
In addition, the S.E.C. says, it is illegal insider trading to sell the shares short if the seller knows a PIPE deal is coming, but that fact has not been announced to the public.
but can they loan these shares for a profit so someone else can short?
PIPE DREAMS and nightmares
DRAFT -- COMMENT PLEASE
Q: What is the difference between the Pink Sheets and the Otcbb?
A: The method of dumping on the OTCBB is way more veiled and sophisticated...
On the Pinksheets, the pumpers use 504 offerings, and distribute a bunch of free shares to their buddies and promoters and sell these shares directly to the public. On the bulletin board, it's a little more sophisticated and wholly accepted.
Most start up companies raise money from friends and family, then angels, then venture capital, then if they are lucky through the public capital markets.
Existing companies with revenues and profits can access growth capital by issing debt, selling to equity, issuing a secondary offering, etc.
Failing companies raise money with PIPES. The problem with PIPES is that the risk reward proposition is out of alignment. Companies that are controlled by a majority...
Q: What is the difference between the Pink Sheets and the Otcbb?
A: The method of dumping on the OTCBB is way more veiled and sophisticated...
On the Pinksheets, the pumpers use 504 offerings, and distribute a bunch of free shares to their buddies and promoters and sell these shares directly to the public. On the bulletin board, it's a little more sophisticated and wholly accepted.
Most start up companies raise money from friends and family, then angels, then venture capital, then if they are lucky through the public capital markets.
Existing companies with revenues and profits can access growth capital by issing debt, selling to equity, issuing a secondary offering, etc.
Failing companies raise money with PIPES. The problem with PIPES is that the risk reward proposition is out of alignment. Companies that are controlled by a majority...
Thursday, November 12, 2009
Too big to fail vs too small to matter
Previously published as "The long tail of stock fraud" UNDERGOING RE-WRITE
The long tail theory can be applied to fraud in the public stock markets. Instead of charting popularity to inventory on the x/y graph, as Chris Anderson does in his book,The Long Tail, the re-rederivation from the reference to the tail of a demand curve, is the relationship between losses (or the less quantifiable "attention") and the frequency of frauds.
There are about 3,000 stocks quoted on the OTCBB. These stocks are regulated by FINRA and the SEC and are required to file their reports. There are roughly 5,000 more quoted on the Pink Sheets These stocks DO NOT HAVE TO FILE with the SEC. Even the 3000 isues on the OTCBB that DO HAVE TO FILE financials with the SEC, can raise money under REGULATION D without having dto disclose the lender.
Pump and dumps on the pink sheets are unsophisticated and ... the shares are just issued to close groups pumped up and sold directly on the open market.
Pumps on the OTCBB are a bit more sophisticated Hedge funds invest via pipes and lend companies money, if the money is not paid back they are given stock or convertible stock istead and thne need a market to convert these shares back into their origial loan
The high amplitude segment of the chart is composed of well-known and highly publicized frauds: Enron, WorldComm, Michael Milken, Martha Stewart, and Ivan Boesky. (add MADOFF TO THE LIST- this article was written beforehand orignally) These cases are fodder for big law firms, the SEC, and the mainstream media. The "long tail" of this chart comprises the thousands of frauds, cons and general chicanery relating to small-public-companies, whose stock usually trades on less-regulated exchanges. In this tail, the total volume and frequency (and overall deleterious impact) is much higher, but the individual cases are relatively small. Novice investors1 are attracted to the potential for huge returns in these penny stocks; predators use schemes and mechanisms like fax spams, e-mail spams, chat room manipulation, misleading advertising and PR, pump and dump schemes, and 504 offerings2 to adulterate the markets and steal money. Fraudsters prey upon investors' psychology, flaws/loopholes in the law, and a system where those laws go unenforced. With relative ease they are able to create scams that go unchallenged, unpunished, and generally unnoticed. These affronts get little public attention, perhaps because they're just so prevalent in these markets. (Or perhaps are they so prevalent because they are unnoticed and unchallenged.) There is almost a baseline expectation of fraud in these markets. However, just because something is accepted does not necessarily mean that it is acceptable. This collective long tail of fraud is detrimental to a sense of fairness in society and to the integrity of the market on the whole. Confidence in the integrity of public markets is vital at any level and these frauds should not go unchecked because they are "too small". It is the small nature of the individual fraud, that makes it so effective, consequently creating the higher frequency and the long tail. The cycle then perpetuates itself leading to more frauds making each individual one all the more insignificant. It makes more sense for the bulk of investors burned in penny stocks to move on because, on an individual level, the stakes are too small to put up a BIG fight. But these are the very reasons why the creation of these schemes are so desirable for the criminals -- and that's also what feeds the tail.
The cases on the high amplitude side of the chart are the high profile shows. The Journalists and reporters want to write about them and cover them, the politicians want to regulate them, and the lawyers want to sue them. The media wants to cover the titillating tales of theft and scandal. Politicians want to legislate high profile cases. It makes economic sense for big law firms to start class action suits against the big frauds. Publicity can be garnered and fees generated. The small stories just don't make the cut: there are not enough pages in the paper, air-time is limited, resources are limited, and money is scarce. Most legislators could not be bothered with something so small and the SEC is overwhelmed and understaffed.3 It usually doesn't make sense for a lawyer or firm to make a case against these frauds and it makes even less sense for an individual to try and do so. The fallout of the long tail of the chart remains relatively quiet and is (unfortunately) greeted with a general complacency by almost everyone. These "islands" of crime and deception are kept intentionally small, to make a legal ordeal (or any crusade to "fight back") against the fraudulent companies uneconomical or undesirable. They fly under the radar because very few have the means to fight back, and the targets of the prospective lawsuits are often shell companies with few assets by the time the fraud is known. (The company has gone bankrupt, funds have been hidden offshore, etc.). It is not worth it for the law firm to spend $200k and 3 years to recover $20k in judgments or potentially collect nothing. People may not fight back on their own because they don't want to spend "good money after bad." Less understandably, they convince themselves that the lies and fraud are expected and just part of the market and that they could use the loss as tax write-off against gains. There are also intangible, psychological reasons why the people do not do anything about these scams. They do not want to admit to themselves, much less make a big deal to others that they fell for something so stupid. Not only are lawsuits costly and time consuming but there is a negative connotation about being litigious and looking to blame someone else for your losses. It makes more sense for the bulk of investors burned in penny stocks to move on because its just not "big" enough to fight. But these are the very reasons why the creation of these schemes are so desirable for the criminals -- and that's also what feeds the tail. It is the small nature of the fraud that causes/produces/leads the frequency to increase, thus producing the incredibly large tail. (we just need to create an index and show what the same value of stocks is worth year over year-- ) i can get data that shows the pipes invested and how these stocks go to zero repeatedly http://www.spamstocktracker.com/ http://www.nytimes.com/2006/03/15/business/15place.html?_r=2
For the most part, these small stock frauds were islands before the Internet. They were intentionally set up to be too small to matter (or too small to fight). They were impossibly small for each individual "mark". They were the "obscure books" that Anderson notes in The Long Tail. In the exact same way, the Internet provided "virtual shelf space" and cheaper search costs that has provided a way for users to "unite around a common symbol."
Unlike the retail long tail which is desirable, a long tail of fraud is not. The Internet can be a mechanism to shorten this tail or one used to perpetuate it. The Internet provides a cheaper and easier medium to create and disseminate each of these islands. It is also a place where the public can "meet at the symbol" in order to create economies of scale in defending and pro-actively protecting each other. The Internet can continue to serve as a medium to assist fraudsters in perpetrating their schemes, or it can be the antidote. One may make an argument that the antidote is just banning all of these small pennystocks and unregulated exchanges. But there is legitimate value for smaller companies to be able to access the capital markets. So it is not desirable to eliminate this facet of commerce altogether, nor is it realistic. The answer to allow it to continue but with a stronger focus on Internet transparency and vigilante regulation. Message boards, blogs, web-sites like Sharesleuth.com and search engine transparency can be used to create economies of scale, to make it easier, more realistic, and more productive for people to fight back after they have been scammed. More comforting still, those same tools can be used to educate and shine a light on things in a common arena to prevent fraud and to obviate the need to fight back in the first place.
The long tail theory can be applied to fraud in the public stock markets. Instead of charting popularity to inventory on the x/y graph, as Chris Anderson does in his book,The Long Tail, the re-rederivation from the reference to the tail of a demand curve, is the relationship between losses (or the less quantifiable "attention") and the frequency of frauds.
There are about 3,000 stocks quoted on the OTCBB. These stocks are regulated by FINRA and the SEC and are required to file their reports. There are roughly 5,000 more quoted on the Pink Sheets These stocks DO NOT HAVE TO FILE with the SEC. Even the 3000 isues on the OTCBB that DO HAVE TO FILE financials with the SEC, can raise money under REGULATION D without having dto disclose the lender.
Pump and dumps on the pink sheets are unsophisticated and ... the shares are just issued to close groups pumped up and sold directly on the open market.
Pumps on the OTCBB are a bit more sophisticated Hedge funds invest via pipes and lend companies money, if the money is not paid back they are given stock or convertible stock istead and thne need a market to convert these shares back into their origial loan
The high amplitude segment of the chart is composed of well-known and highly publicized frauds: Enron, WorldComm, Michael Milken, Martha Stewart, and Ivan Boesky. (add MADOFF TO THE LIST- this article was written beforehand orignally) These cases are fodder for big law firms, the SEC, and the mainstream media. The "long tail" of this chart comprises the thousands of frauds, cons and general chicanery relating to small-public-companies, whose stock usually trades on less-regulated exchanges. In this tail, the total volume and frequency (and overall deleterious impact) is much higher, but the individual cases are relatively small. Novice investors1 are attracted to the potential for huge returns in these penny stocks; predators use schemes and mechanisms like fax spams, e-mail spams, chat room manipulation, misleading advertising and PR, pump and dump schemes, and 504 offerings2 to adulterate the markets and steal money. Fraudsters prey upon investors' psychology, flaws/loopholes in the law, and a system where those laws go unenforced. With relative ease they are able to create scams that go unchallenged, unpunished, and generally unnoticed. These affronts get little public attention, perhaps because they're just so prevalent in these markets. (Or perhaps are they so prevalent because they are unnoticed and unchallenged.) There is almost a baseline expectation of fraud in these markets. However, just because something is accepted does not necessarily mean that it is acceptable. This collective long tail of fraud is detrimental to a sense of fairness in society and to the integrity of the market on the whole. Confidence in the integrity of public markets is vital at any level and these frauds should not go unchecked because they are "too small". It is the small nature of the individual fraud, that makes it so effective, consequently creating the higher frequency and the long tail. The cycle then perpetuates itself leading to more frauds making each individual one all the more insignificant. It makes more sense for the bulk of investors burned in penny stocks to move on because, on an individual level, the stakes are too small to put up a BIG fight. But these are the very reasons why the creation of these schemes are so desirable for the criminals -- and that's also what feeds the tail.
The cases on the high amplitude side of the chart are the high profile shows. The Journalists and reporters want to write about them and cover them, the politicians want to regulate them, and the lawyers want to sue them. The media wants to cover the titillating tales of theft and scandal. Politicians want to legislate high profile cases. It makes economic sense for big law firms to start class action suits against the big frauds. Publicity can be garnered and fees generated. The small stories just don't make the cut: there are not enough pages in the paper, air-time is limited, resources are limited, and money is scarce. Most legislators could not be bothered with something so small and the SEC is overwhelmed and understaffed.3 It usually doesn't make sense for a lawyer or firm to make a case against these frauds and it makes even less sense for an individual to try and do so. The fallout of the long tail of the chart remains relatively quiet and is (unfortunately) greeted with a general complacency by almost everyone. These "islands" of crime and deception are kept intentionally small, to make a legal ordeal (or any crusade to "fight back") against the fraudulent companies uneconomical or undesirable. They fly under the radar because very few have the means to fight back, and the targets of the prospective lawsuits are often shell companies with few assets by the time the fraud is known. (The company has gone bankrupt, funds have been hidden offshore, etc.). It is not worth it for the law firm to spend $200k and 3 years to recover $20k in judgments or potentially collect nothing. People may not fight back on their own because they don't want to spend "good money after bad." Less understandably, they convince themselves that the lies and fraud are expected and just part of the market and that they could use the loss as tax write-off against gains. There are also intangible, psychological reasons why the people do not do anything about these scams. They do not want to admit to themselves, much less make a big deal to others that they fell for something so stupid. Not only are lawsuits costly and time consuming but there is a negative connotation about being litigious and looking to blame someone else for your losses. It makes more sense for the bulk of investors burned in penny stocks to move on because its just not "big" enough to fight. But these are the very reasons why the creation of these schemes are so desirable for the criminals -- and that's also what feeds the tail. It is the small nature of the fraud that causes/produces/leads the frequency to increase, thus producing the incredibly large tail. (we just need to create an index and show what the same value of stocks is worth year over year-- ) i can get data that shows the pipes invested and how these stocks go to zero repeatedly http://www.spamstocktracker.com/ http://www.nytimes.com/2006/03/15/business/15place.html?_r=2
For the most part, these small stock frauds were islands before the Internet. They were intentionally set up to be too small to matter (or too small to fight). They were impossibly small for each individual "mark". They were the "obscure books" that Anderson notes in The Long Tail. In the exact same way, the Internet provided "virtual shelf space" and cheaper search costs that has provided a way for users to "unite around a common symbol."
Unlike the retail long tail which is desirable, a long tail of fraud is not. The Internet can be a mechanism to shorten this tail or one used to perpetuate it. The Internet provides a cheaper and easier medium to create and disseminate each of these islands. It is also a place where the public can "meet at the symbol" in order to create economies of scale in defending and pro-actively protecting each other. The Internet can continue to serve as a medium to assist fraudsters in perpetrating their schemes, or it can be the antidote. One may make an argument that the antidote is just banning all of these small pennystocks and unregulated exchanges. But there is legitimate value for smaller companies to be able to access the capital markets. So it is not desirable to eliminate this facet of commerce altogether, nor is it realistic. The answer to allow it to continue but with a stronger focus on Internet transparency and vigilante regulation. Message boards, blogs, web-sites like Sharesleuth.com and search engine transparency can be used to create economies of scale, to make it easier, more realistic, and more productive for people to fight back after they have been scammed. More comforting still, those same tools can be used to educate and shine a light on things in a common arena to prevent fraud and to obviate the need to fight back in the first place.
Wednesday, November 11, 2009
Short selling as a tool to prevent fraud in OTC markets.
As a corollary to the post on shorting in general, this post will discuss how short selling can and should be used as a way to help mitigate fraud in stocks traded over the counter via the OTCBB, Pinksheets, etc.
At present, Market Makers are legally allowed to naked short stocks since they are required to provide liquidity. I think hedge funds should be able to apply for and/or pay a bond for a license that allows them to do the same thing.
Thoughts...?
At present, Market Makers are legally allowed to naked short stocks since they are required to provide liquidity. I think hedge funds should be able to apply for and/or pay a bond for a license that allows them to do the same thing.
Thoughts...?
Pink Sheet Sucess Stories
This post/project will tie a few different objectives together. We are looking for companies that were once or continue to trade on the pink sheets (for any reason; started there, foreign, de-listed from NASDAQ, non-filing, etc) that either
* graduated to a national stock exchange and trades there now
* has had 8 consecutive quarters of net income
* was bought out
* graduated to a national stock exchange and trades there now
* has had 8 consecutive quarters of net income
* was bought out
Tuesday, November 10, 2009
Selling, Short selling, and naked short selling.
LIVE DRAFT
What's the difference, and what is the big deal. No one (sane and smart) will argue with your right to sell a stock in a free market (as long as you do not have inside information-- more on that in another post).
So if there is unequivocally no contention with the right to sell something you own outright, for any reason, why is there a bit of superciliousness associated with short selling. Why do some people think it's bad for markets (and why do we disagree).
Short selling is the act of borrowing shares for the purpose of selling something you don't own in an attempt to profit by buying the same shares back at a lower price, returning them to the owner; effectively placing a wager on the price of the shares going down rather than the conventional "long" play. Short selling is akin to playing the don't pass line at the craps table in Vegas.
Some arguments against shortselling include...
LIMITED DOWNSIDE (can't go any lower than zero, where long plays have no cap). This argument is purely theoretical.
FIGHTING A GENERAL TREND (this is true, stocks tend to go up, but this is a very general argument and does not apply to specific stocks).
Excellent blog post/discussion on shortselling and naked short selling
Sort of funny but kind of dumb daily show video on short selling
"Essentially they buy fire insurance on the company, and then they burn it down" -Patrick Byrne (he, hopefully, is just talking about NAKED short selling and was taken out of context. He is too smart to think that the mere act of selling is akin to burning the place down. Many short sellers lose a ton of money. The defense of his line would be, if you saw a building that was going to burn down anyway NO MATTER WHAT YOU DID, because it was not looked after properly, and you could buy insurance on it, would you. The answer, hopefully is yes, because not only could you stand to profit, but you might be able to warn some of the innocent people to get out of the building in time...)
What's the difference, and what is the big deal. No one (sane and smart) will argue with your right to sell a stock in a free market (as long as you do not have inside information-- more on that in another post).
So if there is unequivocally no contention with the right to sell something you own outright, for any reason, why is there a bit of superciliousness associated with short selling. Why do some people think it's bad for markets (and why do we disagree).
Short selling is the act of borrowing shares for the purpose of selling something you don't own in an attempt to profit by buying the same shares back at a lower price, returning them to the owner; effectively placing a wager on the price of the shares going down rather than the conventional "long" play. Short selling is akin to playing the don't pass line at the craps table in Vegas.
Some arguments against shortselling include...
LIMITED DOWNSIDE (can't go any lower than zero, where long plays have no cap). This argument is purely theoretical.
FIGHTING A GENERAL TREND (this is true, stocks tend to go up, but this is a very general argument and does not apply to specific stocks).
Excellent blog post/discussion on shortselling and naked short selling
Sort of funny but kind of dumb daily show video on short selling
"Essentially they buy fire insurance on the company, and then they burn it down" -Patrick Byrne (he, hopefully, is just talking about NAKED short selling and was taken out of context. He is too smart to think that the mere act of selling is akin to burning the place down. Many short sellers lose a ton of money. The defense of his line would be, if you saw a building that was going to burn down anyway NO MATTER WHAT YOU DID, because it was not looked after properly, and you could buy insurance on it, would you. The answer, hopefully is yes, because not only could you stand to profit, but you might be able to warn some of the innocent people to get out of the building in time...)
Wednesday, October 14, 2009
Market makers and naked short sellers.
Do market makers play games? In my opinion, they game they play is more like poker than the three card Monte some theorists believe. It’s funny to read the term big boys when it comes to OTCBB stocks. I am not sure if the term even refers to the MMs or the intuitions, but There ARE no big boys in BB stocks. Hedge funds and pension plans and mutual funds DO NOT BUY BB STOCKS. Pension plans and hedge funds do not buy them EVER, that is a fact. And not just because they are risky, illiquid, and too small to make a return on the scale needed – they are not allowed to invest in stocks less than 5 dollars. As for hedge funds, they will invest in anything worthwhile but they look for big returns, it’s nearly impossible to make more than a million dollars on a company valued at less than 25m especially when most of the shares outstanding are tied up with insiders. Now, back to the price of chickens… MM’s DO play poker style games. They can use low volumes around whole numbers where they know stop losses are set and they can just do little things that any expert in any industry knows to do better than the rookie or dilettante. HOWEVER. MM’s cannot keep the stock price down artificially for too long. If they put an offer below the market price, it will get taken and they HAVE TO SELL THOSE SHARES. You cannot “bluff” in this market simply with quotes. That would take extreme coordination with other mms and even then you actually have to sell the stock, not just quote that you “would” sell the stock. Actions speak way louder than words. They have to put their money where their mouths are… NOW. The coordination and conspiracy brings me to the next point, NAKED SHORT SELLING. Short lists and regulations have been updated in the past years, but as far as I know, the only way for a NAKED SHORT SELLER to really “win” is if they actually put the entire company out of business… otherwise they have to cover those shares eventually.
Do market makers play games? In my opinion, they game they play is more like poker than the three card Monte some theorists believe. It’s funny to read the term big boys when it comes to OTCBB stocks. I am not sure if the term even refers to the MMs or the intuitions, but There ARE no big boys in BB stocks. Hedge funds and pension plans and mutual funds DO NOT BUY BB STOCKS. Pension plans and hedge funds do not buy them EVER, that is a fact. And not just because they are risky, illiquid, and too small to make a return on the scale needed – they are not allowed to invest in stocks less than 5 dollars. As for hedge funds, they will invest in anything worthwhile but they look for big returns, it’s nearly impossible to make more than a million dollars on a company valued at less than 25m especially when most of the shares outstanding are tied up with insiders. Now, back to the price of chickens… MM’s DO play poker style games. They can use low volumes around whole numbers where they know stop losses are set and they can just do little things that any expert in any industry knows to do better than the rookie or dilettante. HOWEVER. MM’s cannot keep the stock price down artificially for too long. If they put an offer below the market price, it will get taken and they HAVE TO SELL THOSE SHARES. You cannot “bluff” in this market simply with quotes. That would take extreme coordination with other mms and even then you actually have to sell the stock, not just quote that you “would” sell the stock. Actions speak way louder than words. They have to put their money where their mouths are… NOW. The coordination and conspiracy brings me to the next point, NAKED SHORT SELLING. Short lists and regulations have been updated in the past years, but as far as I know, the only way for a NAKED SHORT SELLER to really “win” is if they actually put the entire company out of business… otherwise they have to cover those shares eventually.
Thursday, October 1, 2009
Flash Orders
Bullish on them or Bullshit on them? Obviously no short term/long term dynamic here, just B or BS and an explanation why.
Tuesday, September 15, 2009
CCTR
The first stock on which we are initiating "coverage" is CCTR. There is ostensible value here given the aggressive push that MGMT is making to have the stock price more reflective of the companies revenues and earnings. My current prediction to kick-start the blog would have to be B/NA. This means I think the stock price will be higher than .053 in a month, but I do not have a basis for a longer term opinion.
The positives remain in that this company is fully reporting and the revenues appear to be real. They have a IR representative willing to pick up the phone and discuss non-private information (half of life is just showing up, and I have found plenty of IR contacts listed that either do not make themselves available or become aggressive when questioned about basic information that they themselves are touting).
On the other hand, the cliche of actions speak louder than words is a key issue here. Simple supply and demand of shares is causing the price to remain lower than the target of 30 cents suggested fair value. Now it is true that OTCBB stocks trade at a discount and that the "good stocks" usually suffer from this systematic discount. However, at the end of the day, stock prices are driven by earnings and expectation of earnings. The only real explanation for the low stock price is that people do not believe the filings or that there is a catch to the numbers, that they do not trust management to not dilute existing shareholders or make other decisions that will affect decrease earnings per share, or that just not enough dollars "know about" the opportunity.
My experience tells me though that dollars don't need a GPS to find a genuine opportunity.
***UPDATE 9/22 CCTR PPS responded favorably today to news about revenue and a new partnership. This PPS movement is consistent with our short term projections of B (for BULLISH) released on 9/15. That being said, we reiterate our B rating and believe that the PPS for CCTR will remain HIGHER than .053 by OCTOBER 15th (an arbitrary date one month after the initial post). On the other hand, we still do not have enough information to make a long term rating and will rely on the crowd (when we have one:). Stock prices are merely results of a real time, constantly updated election, where people have as many votes as they have dollars. So in this case, if PPS remains strong, it means that MGMT's campaign to raise awareness of the deals they are doing and the revenue/profits they are making is working. The stock will retain the strong PPS, however, only if the profits and profit projections are real and realized, respectively.
As PR becomes increasingly transparent and ubiquitous, we invite IR to make a public statement here. Many IR departments are already embracing new media, social networking, and web 2.0 by creating facebook groups and creating websites for their stocks. Those who go on the record to disseminate facts and corroborate on the record that the information they are relaeasing is not only factual but sincere and not misleading are likely to benefit and not suffer from the blanket discount applied to OTC stocks.
******UPDATED AGAIN--- nothing posted previously is ever deleted, removed, or censored
CCTR
posted at Sep 14, 2009 2:51:38 PM
Tags:
Post coming soon.
Public Relations does pick up the phone and is happy to discuss all publicly known information. The disconnect between the stock price and the company announcements however could be cause for concern. Sometimes there are justifiable reasons for the disconnect, creating an opportunity... other times the market knows best.
CCTR
Sep 22, 2009 3:01:57 PM
Tags:
The first stock on which we are initiating "coverage" is CCTR. (cctr.ob) There is ostensible value here given the aggressive push that MGMT is making to have the stock price more reflective of the companies revenues and earnings. My current prediction to kick-start the blog would have to be B/NA. This means I think the stock price will be higher than .053 in a month, but I am unsure about 12 months.
Positives are that this company is fully reporting and the revenues appear to be real. They have a IR representative willing to pick up the phone and discuss non-private information.
On the other hand, the cliche of actions speak louder than words is a key issue here. Simple supply and demand of shares is causing the price to remain lower than the target of 30 cents suggested fair value. Now it is true that OTCBB stocks trade at a discount and that the "good stocks" usually suffer from this systematic discount. However, at the end of the day, stock prices are driven by earnings and expectation of earnings. The only real explanation for the low stock price is that people do not believe the filings or that there is a catch to the numbers, that they do not trust management to not dilute existing shareholders or make other decisions that will affect decrease earnings per share, or that just not enough dollars "know about" the opportunity.
My experience tells me though that dollars don't need a GPS to find a genuine opportunity.
***UPDATE 9/22 CCTR (cctr.ob) PPS responded favorably today to news about revenue and a new partnership. This PPS movement is consistent with our short term projections of B (for BULLISH) released on 9/15. That being said, we reiterate our B rating and believe that the PPS for CCTR (cctr.ob) will remain HIGHER than .053 by OCTOBER 15th (an arbitrary date one month after the initial post). On the other hand, we still do not have enough information to make a long term rating and will rely on the crowd (when we have one:). Stock prices are merely results of a real time, constantly updated election, where people have as many votes as they have dollars. So in this case, if PPS remains strong, it means that MGMT's campaign to raise awareness of the deals they are doing and the revenue/profits they are making is working. The stock will retain the strong PPS, however, only if the profits and profit projections are real and realized, respectively.
As PR becomes increasingly transparent and ubiquitous, we invite IR to make a public statement here. Many IR departments are already embracing new media, social networking, and web 2.0 by creating facebook groups and creating websites for their stocks. Those who go on the record to disseminate facts and corroborate on the record that the information they are releasing is not only factual but sincere and not misleading are likely to benefit and not suffer from the blanket discount applied to OTC stocks.
CCTR dilution?
Sep 28, 2009 12:40:01 AM
Tags:
Upon information and belief, if there are many more than 20m shares outstanding (and revenue/profits do not increase proportionally) reported in the next company filing, management could be in breach of certain duties of care, reasonably owed to shareholders. I hope they are not diluting the shares and do not believe that they would be during this aggressive campaign to tell the public about the fair value projections of their stock. Since this projection is PER SHARE and not just a total valuation of the company, I believe that a material increase in shares without the commensurate rise in revs and profits would absolutely violate the company's duty.
Re: CCTR dilution?
Sep 29, 2009 11:24:10 AM
Tags: cctr, cctr.ob, corporate buybacks, otcbb dilution
WEB-CAST REPORT CARD
* Acknowledgment of WSJ potentially misleading headline A+++
* Theoretical 100m share count acknowledged in the presentation (and reiteration of fair value accordingly A+
* Acknowledge the redundancy of press releases A+
* Justification of redundancy A -- big companies do advertise, it's true and there is nothing wrong with truthful redundancy to get in front of the new investors as long as it doesn't remove credibility with existing investors
* Justification of possible dilution B -- companies need to be careful about issuing more shares, especially when they feel they are undervalued - BUT as long as the filings are transparent about whom is receiving the new shares and what the terms are - it's true that companies need cash to grow and some dilution is expected at this level of business
* Lack addressing corporate buyback or at least MGMT open market purchases. D-I understand that cash flows and other factors limit the company's ability to purchase shares (especially considering that they may have to issue shares not only to preserve cash but to raise more)... HOWEVER, if this stock is 600% undervalued, I would like to see the management making some personal investment in the stock. AFAIK, it is perfectly legal as long as it is reported and the purchases are made during certain windows. I believe they just need to file a form 5 or something. This gesture does as much for public relations, investor moral and confidence as any PR could do- not to mention direct strength to the PPS with the purchase of the shares themselves.
Will post separately about the laws around management stock purchases and sales.
Upon information and belief, if there are many more than 20m shares outstanding (and revenue/profits do not increase proportionally) reported in the next company filing, management could be in breach of certain duties of care, reasonably owed to shareholders. I hope they are not diluting the shares and do not believe that they would be during this aggressive campaign to tell the public about the fair value projections of their stock. Since this projection is PER SHARE and not just a total valuation of the company, I believe that a material increase in shares without the commensurate rise in revs and profits would absolutely violate the company's duty.
NATIONAL EXCHANGE LISTING (post in progress- contributions welcome)
Oct 19, 2009 9:42:03 PM
Tags: cctr, cctr.ob, corporate buybacks, otcbb dilution, stock exchanges, OTCBB
China Crescent Enterprises, Inc. Set Sights on 2010 $100 Million Profitable Revenue Target and National Exchange Listing Strategy After Achieving $66 Million Milestone
Taken literally, the above headline when isolated for the national exchange listing, reads only that they have their siights set on a strategy not necessarily a listing. That being said, let's look at all the national stock exchanges in the United States and their listing requirements-- as CCTR has clearly planted a seed for investors to reasonably consider the POSSIBILITY of the company being in a position to meet, or come close to meeting these requirements within a reasonable time period. (list from WIKIPEDIA)
* NASDAQ OMX BX, Inc. (formerly the Boston Stock Exchange) INTERNATIONAL EXCHANGE
* Chicago Board Options Exchange (CBOE)
* Chicago Board of Trade (CBOT) - Owned and operated by CME Group Inc.
* Chicago Mercantile Exchange (CME) - Owned and operated by CME Group Inc.
* Chicago Stock Exchange (CHX)
* International Securities Exchange (ISE)
o ISE Options Exchange
o ISE Stock Exchange
* Miami Stock Exchange (MS4X)[2]
* NASDAQ Stock Market, The - Owned and operated by NASDAQ OMX Group, Inc. (formerly The Nasdaq Stock Market, Inc.).
o NASDAQ Market Tiers
+ NASDAQ Global Select Market
+ NASDAQ Global Market (formerly NASDAQ National Market) NASDAQ Stock Exchange: To be listed on the NASDAQ a company must have issued at least 1.25 million shares of stock worth at least $70 million and must have earned more than $11 million over the last three years.[4]
+ NASDAQ Capital Market (formerly NASDAQ Small Cap Market) $4 initial bid price 15m minimum market value of publicly held shares ,$1 continued bid price
o NASDAQ Subsidiaries
+ Nasdaq OMX PHLX - Formerly Philadelphia Stock Exchange, Inc. (Philadelphia Stock Exchange, (PHLX))
* National Stock Exchange (NSX)
* New York Stock Exchange (NYSE) - Owned and operated by NYSE Euronext.
o NYSE Alternext US - Organized as NYSE Alternext US LLC (formerly American Stock Exchange LLC (American Stock Exchange, AMEX)) New York Stock Exchange: To be listed on the New York Stock Exchange (NYSE) a company must have issued at least a million shares of stock worth $100 million and must have earned more than $10 million over the last three years.[5]
o NYSE Arca (formerly Pacific Exchange)
* BATS Exchange
CCTR earnings expectations
Oct 21, 2009 8:43:47 AM
Tags: cctr, cctr.ob, corporate buybacks, otcbb dilution, earnings
this coming quarter (to be released on or around Nov 15th) seem to matter only from a shares outstanding POV. The year end report, which we won't see until around late March, is more telling- here's what I think
If they already reported earnings of 1.1m for the first half of the year and continually say that the second half of the year is strongest and that they are going to have a record year, then I think it is safe to bet on 2.5m+ of profits for the year. Even with a share count of 100m that they seem to be bracing everyone for, that would be 2.5 cents per share. Now assuming that the revenues are sustainable and even scalable, and not coming from selling stock alone (which to me would be misleading investors given the campaign) that should garner at least a 5x multiple and the stock could still hit 10-15 cents on a report like that.
But like I said, that's not until April and it assumes that sharecount stays under 100m.
Re: CCTR earnings expectations
Oct 23, 2009 7:56:06 PM
Tags: cctr, cctr.ob, corporate buybacks, otcbb dilution, earnings, otcbb valuations
upon information and belief, the net income in 2008 was just
over $638K-- with net income for the first half of 2009 at 1.1m and second half being stronger than the first, I really think they have to report 2.5m for 2009 with less than 100m s/o and this stock SHOULD (not will) pop a little bit:) but again, we won't know the full year numbers for quite a while-- that said, if they 3q has at least 500k in net income and ~50m shares out or less, we could see 10 cents.... i think they need 3cents a share for a reasonable "fair value" 30 cent pps
this coming quarter (to be released on or around Nov 15th) seem to matter only from a shares outstanding POV. The year end report, which we won't see until around late March, is more telling- here's what I think
If they already reported earnings of 1.1m for the first half of the year and continually say that the second half of the year is strongest and that they are going to have a record year, then I think it is safe to bet on 2.5m+ of profits for the year. Even with a share count of 100m that they seem to be bracing everyone for, that would be 2.5 cents per share. Now assuming that the revenues are sustainable and even scalable, and not coming from selling stock alone (which to me would be misleading investors given the campaign) that should garner at least a 5x multiple and the stock could still hit 10-15 cents on a report like that.
But like I said, that's not until April and it assumes that share count stays under 100m.
Re: Re: CCTR earnings expectations
Oct 26, 2009 9:26:36 AM
Tags: cctr, cctr.ob, corporate buybacks, OTCBB dilution, earnings, otcbb valuations
net income last year was about 600k- net income for just the first half of this year was 1.1m... even if they don't earn another dollar this year, and shares out are less than 100m that would be 1 cent per share in earnings with 100% growth.. unless there is really something materially wrong with the earnings quality, or someone knows for a fact that the growth is going to hit a wall or stop altogether, i think the pps should start to reflect something in the 5-10x multiple range of pps (but mgmt will have to continue to earn its credibility)
upon information and belief, the net income in 2008 was just
over $638K-- with net income for the first half of 2009 at 1.1m and second half being stronger than the first, I really think they have to report 2.5m for 2009 with less than 100m s/o and this stock SHOULD (not will) pop a little bit:) but again, we won't know the full year numbers for quite a while-- that said, if they 3q has at least 500k in net income and ~50m shares out or less, we could see 10 cents.... i think they need 3cents a share for a reasonable "fair value" 30 cent pps
this coming quarter (to be released on or around Nov 15th) seem to matter only from a shares outstanding POV. The year end report, which we won't see until around late March, is more telling- here's what I think
If they already reported earnings of 1.1m for the first half of the year and continually say that the second half of the year is strongest and that they are going to have a record year, then I think it is safe to bet on 2.5m+ of profits for the year. Even with a share count of 100m that they seem to be bracing everyone for, that would be 2.5 cents per share. Now assuming that the revenues are sustainable and even scalable, and not coming from selling stock alone (which to me would be misleading investors given the campaign) that should garner at least a 5x multiple and the stock could still hit 10-15 cents on a report like that.
But like I said, that's not until April and it assumes that sharecount stays under 100m.
The positives remain in that this company is fully reporting and the revenues appear to be real. They have a IR representative willing to pick up the phone and discuss non-private information (half of life is just showing up, and I have found plenty of IR contacts listed that either do not make themselves available or become aggressive when questioned about basic information that they themselves are touting).
On the other hand, the cliche of actions speak louder than words is a key issue here. Simple supply and demand of shares is causing the price to remain lower than the target of 30 cents suggested fair value. Now it is true that OTCBB stocks trade at a discount and that the "good stocks" usually suffer from this systematic discount. However, at the end of the day, stock prices are driven by earnings and expectation of earnings. The only real explanation for the low stock price is that people do not believe the filings or that there is a catch to the numbers, that they do not trust management to not dilute existing shareholders or make other decisions that will affect decrease earnings per share, or that just not enough dollars "know about" the opportunity.
My experience tells me though that dollars don't need a GPS to find a genuine opportunity.
***UPDATE 9/22 CCTR PPS responded favorably today to news about revenue and a new partnership. This PPS movement is consistent with our short term projections of B (for BULLISH) released on 9/15. That being said, we reiterate our B rating and believe that the PPS for CCTR will remain HIGHER than .053 by OCTOBER 15th (an arbitrary date one month after the initial post). On the other hand, we still do not have enough information to make a long term rating and will rely on the crowd (when we have one:). Stock prices are merely results of a real time, constantly updated election, where people have as many votes as they have dollars. So in this case, if PPS remains strong, it means that MGMT's campaign to raise awareness of the deals they are doing and the revenue/profits they are making is working. The stock will retain the strong PPS, however, only if the profits and profit projections are real and realized, respectively.
As PR becomes increasingly transparent and ubiquitous, we invite IR to make a public statement here. Many IR departments are already embracing new media, social networking, and web 2.0 by creating facebook groups and creating websites for their stocks. Those who go on the record to disseminate facts and corroborate on the record that the information they are relaeasing is not only factual but sincere and not misleading are likely to benefit and not suffer from the blanket discount applied to OTC stocks.
******UPDATED AGAIN--- nothing posted previously is ever deleted, removed, or censored
CCTR
posted at Sep 14, 2009 2:51:38 PM
Tags:
Post coming soon.
Public Relations does pick up the phone and is happy to discuss all publicly known information. The disconnect between the stock price and the company announcements however could be cause for concern. Sometimes there are justifiable reasons for the disconnect, creating an opportunity... other times the market knows best.
CCTR
Sep 22, 2009 3:01:57 PM
Tags:
The first stock on which we are initiating "coverage" is CCTR. (cctr.ob) There is ostensible value here given the aggressive push that MGMT is making to have the stock price more reflective of the companies revenues and earnings. My current prediction to kick-start the blog would have to be B/NA. This means I think the stock price will be higher than .053 in a month, but I am unsure about 12 months.
Positives are that this company is fully reporting and the revenues appear to be real. They have a IR representative willing to pick up the phone and discuss non-private information.
On the other hand, the cliche of actions speak louder than words is a key issue here. Simple supply and demand of shares is causing the price to remain lower than the target of 30 cents suggested fair value. Now it is true that OTCBB stocks trade at a discount and that the "good stocks" usually suffer from this systematic discount. However, at the end of the day, stock prices are driven by earnings and expectation of earnings. The only real explanation for the low stock price is that people do not believe the filings or that there is a catch to the numbers, that they do not trust management to not dilute existing shareholders or make other decisions that will affect decrease earnings per share, or that just not enough dollars "know about" the opportunity.
My experience tells me though that dollars don't need a GPS to find a genuine opportunity.
***UPDATE 9/22 CCTR (cctr.ob) PPS responded favorably today to news about revenue and a new partnership. This PPS movement is consistent with our short term projections of B (for BULLISH) released on 9/15. That being said, we reiterate our B rating and believe that the PPS for CCTR (cctr.ob) will remain HIGHER than .053 by OCTOBER 15th (an arbitrary date one month after the initial post). On the other hand, we still do not have enough information to make a long term rating and will rely on the crowd (when we have one:). Stock prices are merely results of a real time, constantly updated election, where people have as many votes as they have dollars. So in this case, if PPS remains strong, it means that MGMT's campaign to raise awareness of the deals they are doing and the revenue/profits they are making is working. The stock will retain the strong PPS, however, only if the profits and profit projections are real and realized, respectively.
As PR becomes increasingly transparent and ubiquitous, we invite IR to make a public statement here. Many IR departments are already embracing new media, social networking, and web 2.0 by creating facebook groups and creating websites for their stocks. Those who go on the record to disseminate facts and corroborate on the record that the information they are releasing is not only factual but sincere and not misleading are likely to benefit and not suffer from the blanket discount applied to OTC stocks.
CCTR dilution?
Sep 28, 2009 12:40:01 AM
Tags:
Upon information and belief, if there are many more than 20m shares outstanding (and revenue/profits do not increase proportionally) reported in the next company filing, management could be in breach of certain duties of care, reasonably owed to shareholders. I hope they are not diluting the shares and do not believe that they would be during this aggressive campaign to tell the public about the fair value projections of their stock. Since this projection is PER SHARE and not just a total valuation of the company, I believe that a material increase in shares without the commensurate rise in revs and profits would absolutely violate the company's duty.
Re: CCTR dilution?
Sep 29, 2009 11:24:10 AM
Tags: cctr, cctr.ob, corporate buybacks, otcbb dilution
WEB-CAST REPORT CARD
* Acknowledgment of WSJ potentially misleading headline A+++
* Theoretical 100m share count acknowledged in the presentation (and reiteration of fair value accordingly A+
* Acknowledge the redundancy of press releases A+
* Justification of redundancy A -- big companies do advertise, it's true and there is nothing wrong with truthful redundancy to get in front of the new investors as long as it doesn't remove credibility with existing investors
* Justification of possible dilution B -- companies need to be careful about issuing more shares, especially when they feel they are undervalued - BUT as long as the filings are transparent about whom is receiving the new shares and what the terms are - it's true that companies need cash to grow and some dilution is expected at this level of business
* Lack addressing corporate buyback or at least MGMT open market purchases. D-I understand that cash flows and other factors limit the company's ability to purchase shares (especially considering that they may have to issue shares not only to preserve cash but to raise more)... HOWEVER, if this stock is 600% undervalued, I would like to see the management making some personal investment in the stock. AFAIK, it is perfectly legal as long as it is reported and the purchases are made during certain windows. I believe they just need to file a form 5 or something. This gesture does as much for public relations, investor moral and confidence as any PR could do- not to mention direct strength to the PPS with the purchase of the shares themselves.
Will post separately about the laws around management stock purchases and sales.
Upon information and belief, if there are many more than 20m shares outstanding (and revenue/profits do not increase proportionally) reported in the next company filing, management could be in breach of certain duties of care, reasonably owed to shareholders. I hope they are not diluting the shares and do not believe that they would be during this aggressive campaign to tell the public about the fair value projections of their stock. Since this projection is PER SHARE and not just a total valuation of the company, I believe that a material increase in shares without the commensurate rise in revs and profits would absolutely violate the company's duty.
NATIONAL EXCHANGE LISTING (post in progress- contributions welcome)
Oct 19, 2009 9:42:03 PM
Tags: cctr, cctr.ob, corporate buybacks, otcbb dilution, stock exchanges, OTCBB
China Crescent Enterprises, Inc. Set Sights on 2010 $100 Million Profitable Revenue Target and National Exchange Listing Strategy After Achieving $66 Million Milestone
Taken literally, the above headline when isolated for the national exchange listing, reads only that they have their siights set on a strategy not necessarily a listing. That being said, let's look at all the national stock exchanges in the United States and their listing requirements-- as CCTR has clearly planted a seed for investors to reasonably consider the POSSIBILITY of the company being in a position to meet, or come close to meeting these requirements within a reasonable time period. (list from WIKIPEDIA)
* NASDAQ OMX BX, Inc. (formerly the Boston Stock Exchange) INTERNATIONAL EXCHANGE
* Chicago Board Options Exchange (CBOE)
* Chicago Board of Trade (CBOT) - Owned and operated by CME Group Inc.
* Chicago Mercantile Exchange (CME) - Owned and operated by CME Group Inc.
* Chicago Stock Exchange (CHX)
* International Securities Exchange (ISE)
o ISE Options Exchange
o ISE Stock Exchange
* Miami Stock Exchange (MS4X)[2]
* NASDAQ Stock Market, The - Owned and operated by NASDAQ OMX Group, Inc. (formerly The Nasdaq Stock Market, Inc.).
o NASDAQ Market Tiers
+ NASDAQ Global Select Market
+ NASDAQ Global Market (formerly NASDAQ National Market) NASDAQ Stock Exchange: To be listed on the NASDAQ a company must have issued at least 1.25 million shares of stock worth at least $70 million and must have earned more than $11 million over the last three years.[4]
+ NASDAQ Capital Market (formerly NASDAQ Small Cap Market) $4 initial bid price 15m minimum market value of publicly held shares ,$1 continued bid price
o NASDAQ Subsidiaries
+ Nasdaq OMX PHLX - Formerly Philadelphia Stock Exchange, Inc. (Philadelphia Stock Exchange, (PHLX))
* National Stock Exchange (NSX)
* New York Stock Exchange (NYSE) - Owned and operated by NYSE Euronext.
o NYSE Alternext US - Organized as NYSE Alternext US LLC (formerly American Stock Exchange LLC (American Stock Exchange, AMEX)) New York Stock Exchange: To be listed on the New York Stock Exchange (NYSE) a company must have issued at least a million shares of stock worth $100 million and must have earned more than $10 million over the last three years.[5]
o NYSE Arca (formerly Pacific Exchange)
* BATS Exchange
CCTR earnings expectations
Oct 21, 2009 8:43:47 AM
Tags: cctr, cctr.ob, corporate buybacks, otcbb dilution, earnings
this coming quarter (to be released on or around Nov 15th) seem to matter only from a shares outstanding POV. The year end report, which we won't see until around late March, is more telling- here's what I think
If they already reported earnings of 1.1m for the first half of the year and continually say that the second half of the year is strongest and that they are going to have a record year, then I think it is safe to bet on 2.5m+ of profits for the year. Even with a share count of 100m that they seem to be bracing everyone for, that would be 2.5 cents per share. Now assuming that the revenues are sustainable and even scalable, and not coming from selling stock alone (which to me would be misleading investors given the campaign) that should garner at least a 5x multiple and the stock could still hit 10-15 cents on a report like that.
But like I said, that's not until April and it assumes that sharecount stays under 100m.
Re: CCTR earnings expectations
Oct 23, 2009 7:56:06 PM
Tags: cctr, cctr.ob, corporate buybacks, otcbb dilution, earnings, otcbb valuations
upon information and belief, the net income in 2008 was just
over $638K-- with net income for the first half of 2009 at 1.1m and second half being stronger than the first, I really think they have to report 2.5m for 2009 with less than 100m s/o and this stock SHOULD (not will) pop a little bit:) but again, we won't know the full year numbers for quite a while-- that said, if they 3q has at least 500k in net income and ~50m shares out or less, we could see 10 cents.... i think they need 3cents a share for a reasonable "fair value" 30 cent pps
this coming quarter (to be released on or around Nov 15th) seem to matter only from a shares outstanding POV. The year end report, which we won't see until around late March, is more telling- here's what I think
If they already reported earnings of 1.1m for the first half of the year and continually say that the second half of the year is strongest and that they are going to have a record year, then I think it is safe to bet on 2.5m+ of profits for the year. Even with a share count of 100m that they seem to be bracing everyone for, that would be 2.5 cents per share. Now assuming that the revenues are sustainable and even scalable, and not coming from selling stock alone (which to me would be misleading investors given the campaign) that should garner at least a 5x multiple and the stock could still hit 10-15 cents on a report like that.
But like I said, that's not until April and it assumes that share count stays under 100m.
Re: Re: CCTR earnings expectations
Oct 26, 2009 9:26:36 AM
Tags: cctr, cctr.ob, corporate buybacks, OTCBB dilution, earnings, otcbb valuations
net income last year was about 600k- net income for just the first half of this year was 1.1m... even if they don't earn another dollar this year, and shares out are less than 100m that would be 1 cent per share in earnings with 100% growth.. unless there is really something materially wrong with the earnings quality, or someone knows for a fact that the growth is going to hit a wall or stop altogether, i think the pps should start to reflect something in the 5-10x multiple range of pps (but mgmt will have to continue to earn its credibility)
upon information and belief, the net income in 2008 was just
over $638K-- with net income for the first half of 2009 at 1.1m and second half being stronger than the first, I really think they have to report 2.5m for 2009 with less than 100m s/o and this stock SHOULD (not will) pop a little bit:) but again, we won't know the full year numbers for quite a while-- that said, if they 3q has at least 500k in net income and ~50m shares out or less, we could see 10 cents.... i think they need 3cents a share for a reasonable "fair value" 30 cent pps
this coming quarter (to be released on or around Nov 15th) seem to matter only from a shares outstanding POV. The year end report, which we won't see until around late March, is more telling- here's what I think
If they already reported earnings of 1.1m for the first half of the year and continually say that the second half of the year is strongest and that they are going to have a record year, then I think it is safe to bet on 2.5m+ of profits for the year. Even with a share count of 100m that they seem to be bracing everyone for, that would be 2.5 cents per share. Now assuming that the revenues are sustainable and even scalable, and not coming from selling stock alone (which to me would be misleading investors given the campaign) that should garner at least a 5x multiple and the stock could still hit 10-15 cents on a report like that.
But like I said, that's not until April and it assumes that sharecount stays under 100m.
Subscribe to:
Posts (Atom)
