Hi,
I don't have any money in this stock but am interested in following and possible putting some money into it. I have access to the daily business newswires for this company so I could let you know of any important news. A couple things I noticed is that as this stock has been hammered lately, the last couple of weeks or so the volume seems to be twice as large as normal (From the stockmaster stock chart on the web). I am not sure if this means renewed interest in the stock for a subsequent upturn or just a higher volume on continued selling.
What interests me about the company is if its business is viable for the future. Like many other stocks of emerging companies, if earnings develop and show a positive up trend, the stock price will readily reflect it. So the question is, is the business that OMG is engaged in great enough to develop strong earnings for the future?
Plus, the plant they just invested in to press CD's, do these machines also have the capability to press out the new DVD discs that will be out soon? I know DVD's are the same size as today's CD's but that they have a slightly different technology in them. I think this is important because while CD's will still be mainstream for quite some time, DVD represents the next greatest source of software revenues given its superior technology.
The 4CDs web site that they have developed has in my opinion a lot of great potential. But before it can take off in a big way, I think a couple things have to happen first. (1) The WWW has to be much faster with full motion video sound and animation so that consumers can see and preview CD's right from their web site. (Cable Modems?) (2) Consumers have to lose their fear of buying products online
Another issue is who is their competition? Do you know of any other web sites that sell CD software with a large selection?
All in all, I have a good gut feeling for this company. I think the CEO of OMG had good insight into a viable business of doing CD replication, and packaging all inhouse for software companies that don't have very big budgets. The truth is, that there are many software companies out there with very good creative products (in fact , many of the best most creative CD game and other titles come from the smallest companies) but that don't have the budget to get them to market and/or the dominance in the industry to claim good store shelf space. That's why the CEO's idea of this market is so brilliant. It gives lesser software companies the chance to capture some of the software market without going broke. And now that these software companies will also have a worldwide market on the WWW and not some tiny amount of shelf space in Electronics Boutique in some country mall, they have much greater potential for sales than they ever had before.
There is a great article in the "The Economist" about the economics of making and selling CD titles. After reading this article, you will understand why the CEO sees a viable business in OMG.
One other thing. OMG just announced that they will be launching their first national advertising campaign in trade journals and other places to make it known what kind of business OMG is engaged in. The CEO was very positive on this development. I could include a copy of the article in my next post if you like..
Well, having said all of the above, the stock is now at a new 52 week low around 2.5 or so with a high of about 12.5 . A return to 12.5 from 2.5 would represent about a 4 fold increase in wealth. Can OMG do it?
Tom |
