Fair questions cavalry. I will answer each as best I can.
First, why has the price fallen? I have asked Skinner this question myself which would probably answer this first question(not direct quotes): why go public when you do not even have a system to sell? The system's idea had been in its infancy for some time. The company did not wish to do the legwork(cash) themselves wholly, so going public allowed equity offerings for the cash. This sort of spread the risk around some. They found a suitable candidate and did the reverse merger to avoid all the paperwork and cost of going public through the IPO route. Once completed, the next point of attention was testing the product. That is what went on last fall(and the three private placements of 500,000 shares each helped), and TISS was impressed enough to want them then(hence the contract press release). It was still up to WINR to get the funding to complete the project with the now known GGLS, CMS, CLT, etc. Skinner has said himself that funding was delayed by at least one company's not following through on assisting with a private placement for the cash over the course of the first part of this year. They came upon CFG, and the PP was competed(hence May 6th announcement). Once the cash was raised the rest of the setup could be finished. I suspect there is more to it than this, but that is what I know. Perhaps Skinner was caught up in tax season with his business more than finishing the deal with CMS. Over the course of that time, the reverse merger price of about $4 or $5 slowly dwindled to where it should have been-almost $0 since there was no revenues stream yet. Rarely do stocks trade higher with just the notion of a product and no revenues.
They did not miss the start date of 7/1(it was not 8/1). In the conference call(notes), Skinner clearly indicated the first of July, which was repeated by CFG as July 1. So, we all thought it was July 1st, when it was actually the first PART of July. This was when operations were supposed to begin. It was clearly indicated in the CC that the debit card would not be available till October. In the meantime(from the first part of July), WINR would have been processing money by cashier's check in and cashier's check out. After completion of the deal with the CMS, WINR learned 2 things. One, the programming would not be ready by the first of July, but the debit card would be available much sooner than October-in fact, by the first part of August. So, as the story has been told, it was better for WINR to not offer anything in July, but wait for the programmers to finish the job while the final preparations were made for providing the debit cards. This supposedly saves WINR money in the long run and gives the product its final look which can be marketed now to potential customers. It has also been established that the CMS sees many more applications for the software which was alluded to in the CC-online stock trading, online shopping, etc.
I am less of a fan of the CFG because they have missed some critical points, and that at least one over there is hyping the stock a little too much. I think most have done a reasonable job, but certainly they screwed up the total shares outstanding picture good(which you read about). I try to spend much more time asking Skinner directly any questions I have now. Overall, they do a decent job-->C+ for a grade. In the longrun, I could care less about the CFG. My focus is WINR.
They can't file for anything the SEC would want to see since they have no revenues They do not have to and they shouldn't waste money on an accountant until they need one-this month would be a good time for auditor seeking activity to begin. This is one strong point against this company. No approved documentation necessary to be submitted for their activities. I believe I addressed the question of a dividend. Skinner sees none in the near future, but anything can change.
I am glad to see you read every post. I hope you found them informative. This is what I strive to accomplish while we wait for the system to be up and running. I will be the first to admit that we got in real early, but that is 20/20 hindsight. We could easily have spiked already to lofty valuations. I have seen those rare companies spike in price when there were no fundamentals, only an idea. WE could easily be in the teens right now if this company chose to hype even more than it is and promoted heavily. From the very beginning, this company has chosen not to do this. Their focus is getting together a solid foundation for business. That is definitely impacting this stock right now. Also, the fact that many do not understand why such a potentially great company is where WINR is, and the ignorance of blaming missed deadlines for it will hurt for some time. This is where I can help. I have been here for nearly 3 months now, and I love this company's potential more than ever. I know who the CMS is. I know who the CLT is, and most importantly, I know who the affiliated banks are. I know MUCH more about internet gaming, and I know much more about gaming in general. I know much more about who some players are in online e-commerce and online banking. I have tried to bring this to all, so that WE can be in the know when this thing actually opens for business.
I feel very good about the realness of this company. I have been in contact with Skinner many times, and I have checked with several secondary sources to confirm that WINR is for real and not a sham. I have contacted all three banks, and one returned a confirmation e-mail identifying WINR-->commerzbank. I have secondary recognition-that is very key to credibility.
All realize(even I) that the proof is in the pudding. This is a great opportunity for online gaming and online commerce in general. If/when the CMS continues to market this product-the only internet software to handle any currency that I know of so far-WINR will benefit not only from the gaming industry growth overseas, but also from the growth of online commerce. Their financial backing is argueably the best in the world.
I personally think we spike pretty good on the day operations are announced. There are many out there very skeptical of this, and I do not blame them. I liken it to the old cliche-it ain't over till the fat lady sings. In this case, there is no system until the system is up and running for all eyes to see. As of July 30th, the system was supposed to be testable for new clients to see. I do not know what this means as compared to just being available for use. Nevertheless, the system is being shown to businesses right now. I can't tell you that it is a 100% guarantee that the system will be up because I do not work for WINR and do not know what happens 24-hours, 7 days a week in the trenches. There are only two sure-fire, 100% guaranteed things in life, and WINR opening up for business isn't either of them. Based on what I know though, it will be open for business, IMHO.
It was mentioned that the debit cards would be available in the first part of August. The reason for the latter August date is to cover their butts. WINR does not want any close calls so they get pounded with calls again about delays of the product. Look for an opening by the end of the second week or the early part of the third(which technically would be latter August). In any event, worst case, we are open for business in about 4 weeks. I doubt we move much from this point(40 cents) until the actual day of announcing operations are up, barring any blockbuster contract deals(which I hear are heavy in the works).
I have waited this long and I am in the loss column from buys at about 11/16. That is only about 5/16ths from where we are now(unfortunately that is a much bigger % loss than it would be if the stock were higher). I do not know of many other microcap risky investments right now that would be better for my money. Small float, small outstanding, cheap price, internet-related, financial services-related, gaming-related, supported by argueably the best banking system in the world. Etc., etc., etc. Just have to be patient now.
I certainly wouldn't put my daughter's college fund in this one, but I would be willing to lose 10-20K for the potential return we are looking at. I would love to see another Cryptologic(CRYP) here and then some. In case you did not know, Cryptologic went from about 10 cents to $40 in less than one year from Jan 1997 to late 1997. They have settled back from their lofty valuations, but they have shown incredible profit margins(60-70%) that WINR will enjoy in the gaming industry and hopefully as high in the e-commerce industry.
I hope this helps. I am not trying to sell you, but trying to help. Make your own decisions(obviously), and keep asking the questions. Definitely ask Skinner. I think this company will be a real winner in the future-pun intended. WINR will probably become a subsidiary of this company. In other words, I think the company gets a name change since they will be heavily involved in general e-commerce as well.
JMHO.
Miller |
