I picked up some of this stock just before it went ballistic and
came down again. In hindsight, I should have sold after seeing it
go up 50% in a couple of days. But I think the stock will do it
again.
Much of the trading was coming off the Island. (Island is an ECN
that many SOES traders use to execute their orders through firms like
Datek.) In other words, a lot of the buying was probably based on the
chart pattern found in IBD's daily charts. It pointed to this stock as being a potential breakout after it came off its (base around 5)
and went to 10 (forming another base between 8 and 9).
The fundamentals look good with this company. Growth Q over Q and
a business plan that breaks from the competition by recycling used
CD's (a business that has some margin).
Like some of you on this thread, I was interested in seeing a store.
I called the company and asked for addresses of two local stores.
The moron that answered the phone wasn't "authorized" to give me
that information. I asked if the location of retail outlets was
some sort of company secret.. and if so, how did they expect customers
to find them? She acted like I was asking for the formula for Coke.
Sheesh.
I found the store address in the phone book. Went over. It wasn't
impressive. While it isn't fair to judge all stores by one retail
outlet, this one was a little hole in the wall, in half of what used
to be a 7-11.
They had a fair selection of titles and appeared to have some traffic
coming in and out of the place. I talked to a few people there.
Explained that I had bought some stock in this company and was
considering buying more. I asked if I could ask them a few general
questions to get a (unscientific) feel for what they (the customers)
thought of the place. In general they said they came there when they had a CD they didn't want any more. But they did't tend to come to
the store for "new" merchandise. They liked the "no-skip" guarantee (which gives you 30 days to return a title and get your money back).
There is another store in our area, but it is about an hour from
where I live (in Utah). I'll try to get to it in the next while
and report what I find here.
At this juncture, I remain bullish on the stock. It appears to have
the wherewithall to make things happen. I am somewhat concerned that
they may not have all that much control over what their franchisees
are doing (location and set up, etc.). There were a dozen things
that could have been improved about the location that I visited.
I am not entirely concerned about the comments that many of the people
who went there didn't buy "new" titles there (since new titles don't
have much mark-up in them).
If they are able to continue their growth rate and see that translate
to the bottomline, things should play well on this stock.
Internet trade would be great, but they are clearly a long way from
getting that done.
Art
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