Access1Financial also recommended Ziasun;
By: PanchoJones
Reply To: None Tuesday, 18 Jul 2000 at 6:45 PM EDT
Post # of 24007
Access1Financial also recommended Ziasun;
Title: Access1Financial Announces Investment Opinion; Access1Financial Issues Research Report on Iceberg Corp. of America
Summary: SANTA MONICA, Calif., Nov 10, 1999 (BUSINESS WIRE) -- Iceberg Corp. of America (OTCBB:ICBG) announced today that Access1Financial, an investor relations company, issued a research report detailing the company's detailing the company's business model and pro forma consolidated financial statements.
Suspicious: SBI Communications
By Bob Davis
Tuesday, July 18, 2000 10:06:00 AM
After its return to the OTC Bulletin Board in early April, SBI Communications (OTCBB: SBID) lay quietly for months around the $0.10 mark, trading sporadically. It stirred occasionally during the last half of June, but soon dropped back again.
But then SBID put out a press release on Wednesday, July 12, announcing "the signing of an exclusive marketing agreement with Iceberg Industries Corporation to market its Iceberg water products for protected territories within the United States."
Hailing the agreement as the "dawn of a new Ice Age," the press release said, "In the making for 100,000 years, Iceberg water is the purest natural source of water on earth and is produced exclusively from harvested Canadian Icebergs. Prehistoric, pollution-free ice from the Polar Icecap."
And with that, the stock was off to the proverbial races, quickly moving up from about $0.40 on Wednesday to close the week at the $0.80 mark. And the upward charge continued on Monday, July 17, with the stock jumping to $1.63.
What's the "Story"?
However, unlike many recent situations, the driving force behind this move was not one or more I-net newsletters, but instead seems to have been a well-timed series of press releases and one vocal stock picker with a following on the I-net forums. As a result, there is no "story" to recount -just the claims made in a rapid-fire series of press releases and a tip to "watch SBID!"
The press release announcing the marketing agreement with Iceberg Industries went on to claim that "the first year of sales will exceed 300,000 cases minimum with an expected growth rate of over 100% during second year."
A day later, on July 13, SBID issued a second press release to announce that it "is considering several scenarios in response to shareholder concerns relating to liquidity of the company's common stock, including but not limited to, a forward split of the company's stock. SBI, which currently has approximately 6 million shares of common stock outstanding, has approximately 1,500,000 shares in the public float and approximately 750,000 that are traded." At this point, the stock's price had risen to $0.80 per share.
A third press release hit on Monday, July 17, just before the market opened to announce an upcoming Board of Directors meeting to discuss a "forward split of the company common stock" and "the possible acquisition and or consolidation of a larger company."
What's Wrong with the "Story"?
It is the "usual story," actually. SBI Communications has not generated any revenues in recent years, and its most significant asset seems to be a bingo hall in Piedmont, Alabama, which has reportedly been sold but apparently without generating significant funds to invest in new projects.
The company's published business plans do not sound very promising, either. According to its most recent 10-Q Report to the SEC, SBID "plans to provide interactive satellite delivered bingo games, game shows and other similar telecommunication gaming products or services to television viewers throughout the United States." In addition, "The company established a secure web site allowing individuals to become members in "A Shopping Club" with membership fees of $19.95 per month. The shopping club will provide a variety of products, services, bingo game sweepstakes related events and items, travels and consumer goods."
A review of SBID's SEC filings does not reveal that the company currently has any capability to distribute bottled water, either to retailers or directly to consumers. As a result, it is not clear how, if at all, the company could meet its year one unit sales projections or its 100 percent annual projected growth rate.
And even if SBID were able to meet these projections, it appears that its reported partner, Iceberg Corporation of America (OTCBB: ICBG) might have trouble keeping up with this demand. ICBG is also a fully-reporting company, which of course means that its financial reports are available via the EDGAR system.
A quick review of ICBG's most recent 10-K Report indicates that this company definitely is an operating business with some prospects for success in the future. However, it appears that it is currently facing a variety of problems that limit its ability to ramp up its production quickly, thus raising the question of whether it could produce SBID's announced sales targets.
The 10-K Report also lists a number of previously-existing distributorship agreements for Iceberg's "Borealis-brand iceberg water." These distributorships have clearly been active for some time, as its latest 10-Q Report states that "Additional costs were incurred in shipping and warehousing as the Company started to ship products into the United States market."
It appears that ICBG does not find this new relationship with SBID to be particularly significant. ICBG also issued a press release on July 12, but not to report the signing of an agreement with SBID. Instead, the ICBG press release announced only that its stock would soon be listed on two German stock exchanges.
The forward split issue is probably meaningless, as it is unlikely that SBID will continue to defy the laws of gravity until such a split can be implemented. As a result, it appears that there is less here than meets the eye.
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Bob Davis is the editor and founder of The Napeague Letter, has 15 years' experience as Chief Financial Officer of two different Nasdaq companies and a Harvard MBA. He does not own stock in, has not been compensated by and has no affiliation with any of the companies he analyzes or their agents or affiliates.
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