Just a note to tell you that you are not alone. I've posted to this
thread before, but haven't had anything to say since. However I check and follow this thread every day. I am long the stock and don't anticipate changing that.
Looking at NFLI's 3ed quarter report filed with the SEC (via EDGAR), I note that they added about 10,000 new distributers in the 1st Q, about 11,000 in the 2nd Q, and only about 1,000 in the 3ed Q. They also had $700,000+ special charges relating to the consent decrees and the Kevin business in the 3ed Q. Nonetheless, they made $.30 per share fully dilluted in the 3ed Q. This implies (to me) that about .30/Q may be a reasonable low end steady state earning capability (i.e., even with few new distributers and significant charges for legal items). That leads to about $1.00 to $1.20 pre year and implies fairly low downside risk from current values. Having said that, the stock may go to 0; nonetheless, all you can do is run the numbers and make a judgement
On Friday, even new bad news, the lawsuit, only produced about 31,000 shares volume and a 3/4 drop in the bid price. Considering that on the OTC market that means only about 15,500 shares were actually traded (i.e., shares that transfered between individual buyers and sellers -- 15,500 shares bought by market makers and 15,500 shares sold by market makers assuming no market makers changed their inventory), that isn't much of a reaction.
I have to admit that, considering the limited downside potential that I see, I have a hard time understanding why there remains a very, very large short position in the stock. Admittedly, there hasn't been any real volume to let them out, and even new bad news hasn't produced much volume. Also, looking at the chart, I'd guess that most of the shorts are in between 15 and 25, implying that they don't have a large profit position yet. Still I wish I knew just why so many have stayed short. |
