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Microcap & Penny Stocks : Delsecur or Grandeur (GDER-OTCBB) DEL-ID for Ecommerce
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To: marcos who wrote (102)12/4/1998 12:25:00 PM
From: Rob S.   of 384
 
I don't agree on the chart TA interpretation. Volumes have been growing to the upside during the past several days and the stock has established a trading range in a classic "cup and handle formation" off the bottom trading range. Sure it can break down from here if the company disappoints with delays or upsets in its programs. But this pattern is often the stage for a rally if events bring in new investors.

What can upset investors, IMO, is that the company will tell them that it will take several months for revenues to build to the point where significant profits are realized. If investors are expecting instant profits or a flurry of agreements in the next week or two, then the stock could slump. But I think that most of the investors who were looking for a quick return after the company went public are now out of the stock. I think events can shape up quickly and production agreements are likely within the next 3-4 months but production royalty revenues will lag those agreements by a few months. Some of that depends on how the agreement spells out payment of royalties. Often they tie it to sales of the product rather than to production. So although production ramps the revenues may lag that. It is also common for there to be a significant up-front payment. My guess is that this could range from $250k to $1M per agreement, but that is just a guess based on past experience with other situations. It is also a possibility that delSecur's partners could acquire a portion of the company. This could be done primarily to support the company rather than as a strategic investment -Neither Alcatel, Hitachi, GMCC or others "need" tiny delSecur to that degree but they would have an interest in it remaining financially solvent.
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