This is going to be like trying to hold back the tide… but here goes.
IMO… the panic selling, and loss of faith in the company is uncalled for. Also, the bashing that ensued is causing even more panic selling. Its called a “self-fulfilling prophecy”…
“The self-fulfilling prophecy is, in the beginning, a false definition of the situation evoking a new behavior which makes the original false conception come 'true'. This specious validity of the self-fulfilling prophecy perpetuates a reign of error. For the prophet will cite the actual course of events as proof that he was right from the very beginning.”
I think the following facts are undisputable:
1) Revenues increased some 700%
2) Assets increased from 200k to over 3-million.
3) Revenue listed on the Q were just the very beginning returns of the very early first sales.
4) Before the release of the Q, shares were worth 7.5 million.
5) Early today the shares were worth 4.5 million.
6) $65,000. In panic selling stock sales took the stock down over 40%.
7) 1,065,373,481 shares issued and outstanding (divided by) 2,968,667 in assets = a book value of .003 (“Most companies trade around 10 to 20 times book value because there is good will and intrinsic value outside of the pure assets of a company.”)
Even at a conservative evaluation of 5 times book value, the stock should be selling at about .015.
There has been great concern for the increase of 2b shares authorized. IMO, this would only be a concern if the company was wasting funds. Although there was another 2b authorized, there has been no indications that all of this will be added to the float. Steve stated that the addition to the authorized will allow for better terms on financing. Think of it this way… your credit score is largely calculated by using your available credit limit to your available credit. i.e. if the credit limit on your credit card is 10,000. and you have spent 5,000., then you credit utilization is 50%. So… if you raise your credit limit to 20,000. (but don’t increase your balance), then you credit utilization is now 25%. The lower your credit utilization is, the better your FICO score is. Most lenders view low utilization as a sign you manage your money better.
Now… the company could decide to draw down on that 2b shares by selling some (or all, but keep in mind the reason for increasing it originally). If they draw down on it to invest in the company, i.e. expand and grow the company by acquiring assets with the proceeds of the share sales… this would be a good thing. Any growth in the company’s net worth could only help the PPS.
IMO… the only bad thing that could come out of increasing the A/S’s… is if the company squanders the company’s assets. Do you think that will happen ??? It could… but do you think it will? Based on everything you have seen to date… all the expansion of the company… the PUBLIC statements of the CEO… the initiatives currently being realized, and the initiatives in the works… the shows currently being broadcast… the availability of anyone with an internet connection to view the content… any one traveling in an airport to view the content… the revenue growing 700%... the asset growth this Q from 200k to 3mil… do you really think they will start squandering the money at this point???
There is a good post over on LieHub about share structure posted by Steve… its worth your review. (post #84778)
So… where do we go from here ? As I write this, the PPS is starting to come back a little. Will it continue to regain what it has lost… who knows. All I know is… the selloff was not due to logical thinking individuals. It was panic selling plain and simple. However, one must consider such mentality when investing… stocks (and their investors) don’t always act logically.
Me… I’m holding. What I believed about the company’s potential prior to yesterday’s Q release… I believe today. If the company does what they have been doing… i.e. their track record… I think this is still a great investment. Will I get rich tomorrow or next week, unlikely… but I think this company will return a respectable value on my investment in the weeks and months to come.
Remember… if everything were in place today, and they were making a ton of money, you couldn’t buy in at this level. If you’re looking for existing documented growth and security… by some Apple or Microsoft shares.
There is one thing I am very disappointed over… and that is the fact that Steve has yet to make an appearance on this board. However… I do give him great credit for going into the lion’s den and staying for hours and hours answering every reasonable question put to him… and there were some tough ones. I believe, any CEO hiding from investors (because he is stealing their money)… would never do what he did over on the other board. I still believe he is the real-deal as they say. Does that guarantee success, of course not, but I’ll invest in that dedication any day !
That’s my take on things.