STNX A case study of market behavior. STNX StarTronix was announced as a great pick of the week on a web site called inside wallstreet. There is a list of stocks there that sell between 1/4 and 10 - 15 per share. I thought that they were interesting enough and looked through the list. The stocks there had been picked out and each one had indeed risen a few pennys or points to set a high after it was selected for the list, but almost all of them had then settled back to a new low.
On the list was STNX StarTronix: A direct marketer of computer hardware with a three fold marketing advantage.
The product is good
They are targeting a group of salesman (as the primary buying group) with a point of sale computer/internet terminal (486dx2-w/28.8 bundled with internet software that's turn-key). Credit card reader and telephone handset (two phone lines) are built in to the unit, with an option for video conferencing. The thing is a telephone, a net phone, an internet terminal, a cash register and a catalogue all wrapped up and ready for all those Mary Kay eager beavers, Amway Go Getters, as well as any other outside salesperson doing business over power lunch. From the promo screen the thing looks small enough to fit in a briefcase.
The unit is for sale only through a direct marketing network. The attrition rate for Direct marketers is very high. Early the company reported that it needed 400 independant field partners. The companys' mid Oct press releases reported that it had received 4000 signed applications. And the receptionist at the front office in Irvine CA claimed 14000 signe ups. And investor relations claims that the stock could easily hit the NASDAQ big board by Christmas, based on the folowing three criteria.
1)The product targets the entry level person who does not wish to buy software or configure it and comes to the door completely hooked up completely configured and ready to drive for $59.95 per month.
No computer shopping, no software shopping, No service vendor shopping, and full tech support.
2)The Distributor signe up was far above what was deemed necessary for success.
3)First delivery of the product to the independent field partners is scheduled for October 25th.
4)A national infomercial is scheduled to be aired between Thanksgiving and Christmas.
Ahem,,,,
We've all heard company hype befor and we have all spoken with investor relations befor.
When the stock was picked by Inside Wall Street it was selling at 1/2
It had risen over a couple of days to .80 and I purchased a 1k lot there. The next day I purchased another lot at .90 and one more on the third day at 1.12. I put my sell order in the night befor the fourth day at an optimistic 1.45. The stock opened at 1.22 and hit one and a quarter befor the bottom fell out. It closed at 87 and has climbed back a few points since then to 95 or so on the day but slid back down again. Share volume was nearly 3 million shares these past few days. Today only 600k or so.
I have to say it feels like shit to get stomped like this. I noticed a large accumulation near end of day on the third day that may have been a danger signe but at this point I realy don't know. for the moment it seems like I'm just stuck with another dog that I have to sweat out because I refuse to sell low when I bought high on good news about a good company with a good product.
It's funny. You're betting on the players on the field but you win or lose on the roar of the crowd and whether or not just one of those beer drinking grabassing clowns shows up or not.
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