Megachain: chart, fundamentals, and news:
The recent news release had no effect on MGCN's price, because it provided no new information. It simply confirmed what those following MGCN already knew - that the megachain program is on track to start generating income later this year.
For anyone that hasn't been following MGCN, check out
megachain.com
to see a revised, detailed description of how they'll operate, and look at Message 10246459
to see why its a great buy.
Why does MGCN's chart currently look bad? Well, a few months ago a rumor circulated that MGCN would be bought out by EBAY. This rumor never had any foundation in fact, and indeed never made much sense. What does multilevel marketing by email have to do with online auctions? Megachain's own investor relations office denied the rumor when I called them about it.
Despite this, the rumor (with encouragement by daytraders, and lack of sufficient DD by followers) quickly drove up MGCN's price to over $2. The decline since then is due primarily to selling off, first by daytraders and then by investors who had bought on the rumor and gradually realized that the rumor was not true.
So, when will the stock price start moving up again? It could be tomorrow, or next week, or it could even take a few months. MGCN will not rise dramatically until:
1. the company provides significant evidence of future success by releasing its initial set vendors, ISP's, and list brokers (which could happen at any time), or
2. the company starts generating significant revenues, which likely won't happen until the fourth quarter, or
3. investors realize Megachain's enormous potential to make money on its own (rather than hoping for a buyout) and jump on the bandwagon.
All three of the above conditions will happen, and MGCN's price will skyrocket as a result. The only question is when.
My strategy has been to keep buy more shares every time the price drops to almost a buck. Other's may prefer to wait for more evidence that the stock is taking off, such as increases in price, volume, or significant news releases, but I think the risk of missing the boat with that approach is too great. When MGCN does take off, it's likely to do so with a very big bang, and the fundamentals are all in place for it take off very soon. |
