Mark -- I don't know about the MMPT connection, but it does seem to fit into the scheme of things, doesn't it?
Also, IMHO, somewhere around this $9 level on GMGC represents an excellent opportunity to buy and/or add to positions, especially given the recent profit-taking pullback. I'm not a chartist and I can't always gauge the near-term psychology surrounding a stock. But as I've delved further into this situation recently, I'm more convinced than ever that the fundamental outlook for GMGC is increasingly compelling.
Over the past two days, I've spoken with several auto analysts at major Wall Street brokerage firms regarding their early assessment of OnStar's prospects and the implication - as they perceive it - for GMGC. Each analyst was extremely positive about OnStar's recurring revenue stream potential for GM, as well as for GMGC. In attempting to quantify the revenue potential for GMGC over a multi-year period based on their assessment of future OnStar users and the revenue-sharing arrangements (which are not yet known and hence can only be guessed at right now), the analysts are coming up with numbers that are far in excess of my expectations/hopes.
If the only thing GMGC had going for it was OnStar, I repeat, if Onstar was GMGC's ONLY venture, I would be buying the stock right now (which I am) even if it was trading at twice its current level. And when you add the potential of their other projects into the equation, you've got a lot of icing-on-the-cake opportunities in this stock. Then there's the possibility that GMGC, via its ongoing association with GM's management, technicians, R&D personnel, etc., will come up with additional business opportunities in the months/quarters/years ahead that none of us has yet envisioned.
I obviously can't discuss the specifics of our conversations or the firms involved for confidentiality/ethical reasons, which I'm sure others on this thread will understand and appreciate. I'm not trying to be cute, coy or cryptic here, just presenting my point of view based on what I know about the OnStar developments at GMGC (which admittedly are a bit sketchy at this time) in hopes that it will provide some basis for helping to evaluate the merits of current/prospective holdings of GMGC stock. And of course, the analysts could be too optimistic in their own assessment of OnStar's consumer acceptance and growth prospects (although they feel very comfortable with their projections at this time).
And then there's the much hashed and rehashed concerns surrounding GMGC (unkempt web site, employee turnover, lack of PR, lack of current revenues, cash burn rate, future of Portico, etc., etc.) But to me, all of these issues pale in comparison to the potentially positive impact of OnStar on GMGC's future.
And by the time all of these uncertainties are cleared up and GMGC's outlook is perfectly clear (probably a year or two from now), the stock isn't gonna be in single digits anymore, assuming the OnStar business model develops anywhere near the current (admittedly preliminary) projections of these analysts. Whether or not management says anything of substance on the conference call, I'll remain very bullish on the stock, because eventually the OnStar numbers will become identifiable and/or made public. Sometimes in the investment business, the answers aren't always clear until it's too late (to buy the stock cheaply), and so you just gotta go with your gut feeling. After weighing the positives and negatives, my gut says buy more, which is what I'm doing today. Sure, there's still risk in this situation, but the reward potential appears to be well worth it.
FWIW, my own list of potential risks in owning GMGC is now narrowed to only three:
1) The company fails, for whatever reasons, to fully execute and deliver on their contractual commitments to GM. (If GM backed out of the deal, the stock would likely drop back to the low single-digits territory.) Probability: 5% or less.
2) The Nasdaq undergoes a sharp sell-off (30%+), taking no prisoners. (GMGC's stock could probably withstand any correction less than that and could even move higher, since company-specific developments, rather than the macro stock-market environment, will likely be the primary driver for the stock.) Near-term probability: 10%.
3) The company is bought out, thus nullifying a potentially great long-term story/stock. Probability: 30%.
We've all made (recouped) a lot of money on paper over the past 4 months given the rise from the $1-$2 level, and there's a great temptation to lock it in, especially given the high level of frustration we've felt over the past several years. I sympathize totally, and there's nothing wrong with taking a profit. On the other hand, I'm a patient long-term investor and I'm in this stock for the duration given what now looks to me to be dramatic revenue/earnings prospects down the road from OnStar alone. But, of course, I've been wrong before. Best of luck to everyone.
ea |
