I post this with permission of the sender. Good info!
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investorexpo.com stockcult.com
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TABLE OF CONTENTS:
I. VIP Update on Big Picture Technologies
Note: The following may be reposted publicly but please include the links above.
I. - BIG PICTURE TECHNOLOGIES (BPI:CDNX $1.89)
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Coverage Initiated: Dec 17/99 $2.17 Website: bigpic.com
VIP COMMENTARY
Quite often you see the entire market rally and you see your stocks lag
behind and begin scratching your head. This happens more so in Canadian
small cap stocks and more especially those that trade on the infamous
Vancouver stock exchange (CDNX). This happened today and for the past 3
weeks on the BPI Big Picture technologies. Here is an insight as to what is
happening with the stock and not necessarily the company.
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BPI-3 WEEK STEEP DESCENT
The stock has been in steady decent since it reached $4.95 (26th April
2000). The first phase of the drop was a natural market correction when all
the tech stocks corrected so the selling was justified. However, the markets
somehow settled down in a range (nasdaq) and the good stocks held their
range while the overpriced non profitable ones continued their slide to new
lows. More especially hit were the dot coms and continue to be.
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HOW IT UNFOLDED.(SHORT SYNDICATE)
Before i start explaining what has happened with BPI stock , it is
imperative that one understands that there is a SHORT SYNDICATE at work on
this stock which would like the company NOT to succeed. I have seen this too
often and in the end the company ends up getting raped by issuing more and
more shares for financing at lower levels and in almost all the case to the
brokers that short the stock in the open market until the liquidity totally
dries out and then they approach the company to finance them at a much
cheaper price so they could cover their short positions and make a handsome
profit.
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SHARE DILUTION
I have seen some Canada's best technology companies get raped by such houses
in Canada just because they are listed on the CDNX. Examples are UBS-V,
SYD.U-V, etc etc... Each one has so many shares outstanding that it will
make you gag. No company would like to dilute their shareholder base by
issuing more stock but most of them have no choice because they have a
business to run and a running business needs money especially a growing
one....
It is really hard to attract institutional money simply because most of them
are not allowed to participate on the CDNX exchange. Those select few
companies that DO manage to get institutional money, than it is because of
superior management and world class technology. Examples on the CDNX are
EWD-V, SYD.U, and also BPI.
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INSTITUTIONAL INVOLVEMENT
Quite often the good ones escape the wrath of the short syndicates because
of the management's deeper connections to the institutional big money from
day one which is needed for financing. AN example of such a stock is EWD-V
Edispatch which saw a rise from under a $1.00 to $30.00 during the bull
rally and still trading at $9.00 which is remarkable for a CDNX stock.
The reason I have liked BPI from day one is because it also has attracted
Institutional money from day one as well, however during this institutional
placement some retail brokers backdoored themselves into the early cheap
financing paper and therefore we are seeing the remnants of that in the open
market. Some of the retail brokers that were involved were also caught in
the downdraft in the market and were caught in margin calls from such stocks
as UBS-V and therefore were forced into selling BPI in the open market
relentlessly to cover their margins losses.
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THE COMPANY
Quite often one begins to make judgements about the company by looking at
the share price. They equate the share price to the performance of the
company. This would hold true if the company had severe institutional
involvement on a day to day basis and also if it is traded on a reputable
exchange like NASDAQ , New York or Toronto. This is not the case with BPI.
Most of the institutions that got the cheap paper on BPI pretty much sold
out the bulk of their positions, so there is lack of it at this point.
However, realize that in this process, the company is very well financed and
will not need money from the market for quite a while. In that time frame
the company will obviously not be sitting on the sidelines but approaching
other financing houses much more reputable and stronger than those that were
brought to the table initially for the upcoming NASDAQ LISTING in September
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STRONG CASH POSITION
The company has a VERY strong cash position right now with around $5.7
million in current assets and $3.4 million in cash as of Dec 31 1999.
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STRONG BUSINESS DEALS
Rumors that STRONG BUSINESS DEALS could be forthcoming in the very near
future with this company. Companies usually announce big deals when their
stock reaches a bottom. SO we could see an announcement any day now coupled
with institutional buying.
Secondly, realize that the company has recently closed a deal with IBM as a
channel partner. This is along with other like DELL, GIGABUYS, AMAZON,
COMPUSA, BEST BUY and STAPLES!
The fruits of these channel partners are already being reflected in their
revenues. BPI's revenues increased 5 fold to over $2 million last year and
the company recorded a record quarter last month of $1.3 million !
A lot of people are saying that BPI could easily surpass $12 million in
sales this year alone and also to break even in the 3rd quarter. The market
cannot ignore such numbers indefinitely and soon enough the piper will get
paid and fairly quickly....Institutions like to see revenues and numbers !
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WHERE IS THE CEO?
Michael Anthony is presently in Toronto meeting several large reputable
institutions NOT for financing but for a merchant banking deal. I am under
the understanding that due diligence is being completed on the BPI. Today,
BPI had several strong BIDS to the tune of 10,000 each buying up and looking
for stock. I would suspect institutions have started loading up realizing
the oversold nature of the stock and the terrific bargain it is sitting at.
On the other hand, some investors were selling out like there was no
tomorrow and the shorts were seen kiting their stock around from one house
to another.
The CEO was on Report on Business TV yesterday and investors can go there
and check out the interview at robtv.com
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SHORT POSITION
The street estimates a short position of over 300,000 shares which will
precipitate upwards as the institutions will probably continue buying up the
stock from here onwards....On any decent buying, the stock should rapidly
rise because of the oversold nature and because of the big short position. A
lot of players will look to buy back their position as well so if you are
looking to pick a position to average down then keep your eye on the ticker
and the volume in the next few days. It will give a clear indication of
where it is headed.
LIKE IN ALL CASES, THE ENTRY DOOR IS ONLY SO SMALL WHEN A STOCK GETS
OVERSOLD ESPECIALLY FOR THE GOOD DEALS .......... !!
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