SunnComm Technologies, Inc. (OTC: STEH)
Near Term Target Price: $0.75 - $1.00
Shares Outstanding 198.7 million
Approx. Float 169.5 million
Near Term Price Proj. $0.75 - $1.00
A Few Reasons to Own STEH:
STEH’s Technology on a Compact Disc Allows Music Buyers to Make Personal Copies of their Favorite Music but Doesn’t Permit That Same Music to be Uploaded to File Sharing Networks Called P2P.
Wall Street Journal says that Whoever Protects the US First, Can Wind Up Protecting the World’s CDs. The US is the Biggest Market.
Wall Street Journal Declares STEH May be “Winning The Race” to Protect Music Worldwide.
JP Morgan Declares STEH is Ahead of Copy Protection Giant, Macrovision.
JP Morgan Predicts a Major Deal with BMG Soon. (JP Morgan Gets Info from the Record Company, itself).
STEH Co-Develops CD Protection Toolkit with Microsoft.
STEH Poised to Go NASDAQ or AMEX Following the Announcement of 2nd Major Label Revenue Deal.
About
STEH focused on the development of technology designed to limit the unauthorized copying of music compact discs.
STEH develops entertainment technology that guards the content ownership rights of publishers, artists, and record companies without getting in the way of the listening experience.
Investment Opportunity
The industry shift towards digital media renders content and copyright owners increasingly vulnerable to unauthorized use of their content. Consumers' ability to make unauthorized copies of video, audio and software content has increased due to the proliferation of inexpensive, easy-to-use devices, such as VCRs, CD and DVD recorders, audio CD recorders and personal video recorders that allow in-home copying of videocassettes, DVDs, digital PPV/VOD programs, CD-ROMs, desktop software, and audio CDs. As technological advances facilitate digital copying at declining prices, motion picture studios, music labels and software publishers have become more concerned with protecting their intellectual property. Independent software vendors ("ISVs") and systems vendors are similarly concerned about unauthorized or illicit use of their software, be it in the enterprise environment (where license parameters may be ignored) or at home (where PC software may be copied and redistributed).
Content Owners Lose Billions of Dollars Every Year to Casual Copying and Professional or Bootleg Piracy.
The music industry is at a digital crossroads. Music industry unit (CD) sales have been falling approximately 10% year-over-year for the past two years, according to the International Federation of Phonographic Industries ("IFPI"). The continued decline was attributed to the high penetration of personal computer-based CD-burners, proliferation of peer-to-peer file sharing services and the lack of commercially viable copy protection and DRM technologies.
Approximately 40% of recordings sold worldwide are reportedly illegal copies, resulting in an estimated $4.3 Billion of Lost Industry Sales in 2001 alone, according to IFPI's "Music Piracy Report 2002 and 2001." In addition, peer-to-peer file sharing of ripped music continues unabated in the "post-Napster" era. IFPI estimated that, in 2001, approximately 99% of music files available on the Internet were unauthorized. In May 2002, IFPI estimated there were approximately 3 million users and 500 million files available for copying at any one time on all of the peer-to-peer services worldwide. There are approximately 200,000 Web and FTP sites hosting or linking to some 100 million unauthorized recorded music files.
Consequently, the music industry is pursuing multiple initiatives to reverse the year over year sales declines, including CD copy protection and digital rights management technologies.
Since early 2000, music labels have expressed interest in technology that would prevent the copying of audio CDs to a PC or CD recordable device.
Valuation
WHY DO WE THINK STEH IS THE BEST NEAR TERM PROFILE SO FAR THIS YEAR?
Answer: In our opinion, it is one word “TIMING”!
We will get to the “TIMING” thing shortly, but by way of background STEH is the 2nd Pink Sheet Company that we have ever Advertised.
We have generally shunned Pink Sheet Company’s because of their lack of Public Information (SEC filings), lack of liquidity, lack of interest and generally the negative perception of a Pink Sheet Stock.
By the way, for those of you not familiar with the Pink Sheet Market, the Pink Sheet Market operates pretty much just like the other Exchanges. To enter an order to BUY or SELL Stock all you need to know is the Symbol, and in this case it is STEH.
Having said all this, what makes STEH different, in our opinion, is as follows:
Although STEH DOES NOT FILE ANNUAL AND QUARTERLY REPORTS WITH THE SEC legally they don’t have to, that is why STEH trades on the Pink Sheets.
THERE IS NO LACK OF LIQUIDITY WITH STEH JUDGING BY ITS 22 DAY AVERAGE DAILY TRADING VOLUME OF 4.25 Million Shares Per Day.
THERE IS NO LACK OF INTEREST IN STEH, JUDGING BY THE CHAT ROOMS, MAINLY RAGING BULL HAS ALMOST 50,000 MESSAGES POSTED.
The Story
The Recording Industry is a Multi Billion Dollar Industry, comprised of 5 Giant Record Companies: BMG/Arista (which is owned by Bertelsmann), EMI, Warner, Sony and Universal of which over 1 Billion CD’s are sold annually.
Here’s the Story in a Nutshell, the Record Labels, as well as the Artists are Losing Revenue because people are downloading their music over the Internet Illegally for free (remember Napster).
What the Record Labels and the Artists are trying to do is to find a solution to their dilemma without pissing off you the consumer or buyer, so they can sell their music and make more money instead of people stealing it.
This is where STEH comes into the picture. STEH is in a race with other software developers trying to find the solution to the dilemma.
STEH’s main competition is a company called Macrovision, which happens to trade on the Nasdaq National Market (MVSN). MVSN, today has a Market Cap of about $1 Billion Dollars, on a little more than $100 Million Dollars in Revenues and Earns Money. MVSN has a research following by many analysts on Wall Street and they are well capitalized. MVSN has $140 Million Dollars in Cash and 283 employees. MVSN in its recent past traded as high $100 Dollars per share with a Market Cap of almost $5 Billion Dollars.
Get the Picture on MVSN, STEH’s Main Competitor is a REAL GOLLIATH!
Now enter STEH, trades on the Lowly Pink Sheets, according to their Website STEH had $250 Thousand Dollars of Cash on Hand as of May 9, 2003, and currently employs 24 People. In fact STEH’s CEO has stated that MVSN has more Lawyers than STEH has employees. A REAL DAVID!
So you may be asking why are we even bothering with STEH?
Here’s where the TIMING thing is starting to come into play.
Both companies have been working with several of the Major Record Labels in regards to testing their respective solutions.
The PROBLEM with MVSN’s Solution is what the Record Labels call “Playability” or the ability to play a protected CD on as many devices as possible. This has been the number one hurdle for MVSN, as the labels benchmark is a playability rate is in the high-90% range.
So, on March 28th, 2003 Analyst Sterling Auty from the Venerable Investment Banking Firm of J.P. Morgan proceeded to DOWNGRADE MVSN to a SELL, and was quoted as saying:
"We believe the news that Arista Records is moving forward with a competitive solution will serve a blow to investor sentiment and the stock could see a 20 to 30 percent pull back over the near-term,"
Auty indicated that Arista, part of the BMG Music business, is protecting all of its promotional and advance CDs with technology from STEH, Macrovision's primary competitor in the audio copy protection market.
As the PR continues: “He(being the analyst) expects Arista will move forward with a commercial release of CDs using the SunComm solution in the U.S. in May or June.”
THE TIMING THING
Here is the TIMING THING, if you have read all the recent PR as well as the message boards regarding this Contract With Arista, You should notice one thing:
TO DATE ARISTA HAS NOT ISSUED A CONTRACT TO ANYONE REGARDING CD PROTECTION SOFTWARE!
All the PR and Chat, and by the way, there is a lot of chat that points to STEH and BMG jointly making a formal PR sometime in June. The last time we checked the Month of June is still not over.
So we think there is time, not much, but still some time.
Why do we believe that this MAJOR PR WILL BE RELEASED ON OR BEFORE JUNE30th?
Well, several weeks ago STEH CALLED FOR THEIR ANNUAL STOCKHOLDERS MEETING ON JULY, 1st, WETHINK this was not done by coincidence because, in our opinion, the last thing that STEH would probably want to deal with is all the WHAT Ifs at the shareholder meeting.
THE BOTTOM LINE
The Old Adage on Wall Street is to “Buy on the Rumor and Sell on the News”!
With the run up of STEH from the beginning of the year to the present, one might believe that the stock will sell off on the news. Not necessarily so because we look at STEH as an investor would look at a Bio-Tech Company.
As you know, Biotech Company's start off in stages, first identifying a disease, the market for it and developing the cure. Whenever these small Biotech Company's gain an FDA approval for their product, the stock, if publicly traded generally ROCKETS in price.
STEH, in our opinion, is just like a Bio-Tech Company. STEH has researched and developed their product, and now it is being tested by several of the Major Record Labels.
In comparison to a Bio-Tech Stock, STEH has gone through the 3 FDA Phases and is now waiting to see if they get approved or not.
STEH getting an order from a MAJOR RECORD LABEL, in our opinion, is the equivalent of a Bio-Tech Stock Gaining an FDA APPROVAL.
For a Bio-Tech Company they generally get a heads up as to WHEN the FDA will meet to give them a Yes or NO.
The Stock Market generally anticipates this by the ACTION IN THE STOCK. Depending upon the potential market size for a drug, usually dictate’s the price movement in the stock.
The Bigger Potential Drug, The Bigger the Movement in the stock after the announcement.
Why may you ask? Answer: BECAUSE NOW THE BIO-TECH COMPANY IS REAL!
So, WE BELIEVE THE DAY OF RECKONING FOR STEH SHOULD BE ANYTIME FROM NOW UNTIL THIS MONDAY JUNE 30th, FROM THE LOGIC THAT WE STATED ABOVE.
If WE ARE Right, in our opinion this event should not only be a Major Milestone to STEH, BUT TO THE RECORDING INDUSTRY TOO. With this Should come A LOT OF FREE PR and PR IS ALWAYS GOOD!
Almost Everyday This Topic is spoken about on Television or in the Newspapers.
What is the Potential Near-Term Stock Value?
To us our logic is as follows: Just go back to Goliath or MVSN, on March 28th when the JP Morgan analyst downgraded MVSN to a SELL, on that day MVSN LOST $125 Million Dollars of Market Value because the analyst said STEH WILL PROBABLY GET THE FIRST CONTRACT.
So MVSN got Slaughtered Because of STEH, But judging from the action on STEH on March 28th, it appears to us that none of that $125 Million Dollars went to STEH’s Stock.
WE MAKE THE ARGUMENT THAT IF MVSN LOST $125 MILLION DOLLARS OF MARKET VALUE IN ONE DAY BECAUSE OF STEH, THIS WOULD MEAN TO US THAT IF STEH WOULD GET A CONTRACT FROM A MAJOR RECORD LABEL, STEH SHOULD BE WORTH AT LEAST $150 MILLION DOLLARS IN ONE DAY OR $0.75 CENTS PER SHARE ON AN ANNOUNCEMENT FOR BEING FIRST TO MARKET AND THEN MOVE HIGHER FROM THERE. JUST LIKE A BIO-TECH STOCK!
So in other words if STEH was a NASDAQ Traded Stock and in the mainstream like MVSN, we feel that investors that Sold MVSN would have Bought STEH.
Obviously this did not happen, but with potential PR Forthcoming Virtually Any Minute;
ONE NEVER KNOWS WHAT MAY HAPPEN, SO KEEP A REALLY CLOSE EYE ON THIS POTENTIAL DOUBLE OVERNIGHT, AND WATCH THIS STOCK TRADE.
Conclusion
In our opinion, those looking for a Great Near Term Speculative Idea to Watch, STEH is probably as Good as it Gets!
As stated Best by STEH’s CEO, “I can’t promise all good news, but I can promise that traveling on the SunnComm rocket ship won’t be boring.”
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******* Important Notice and Disclaimer: Please Read *******
The purpose of this advertisement is to provide publicity for the advertised company, its products or services. This advertisement is not a solicitation or recommendation to buy, sell or hold securities and does not provide an analysis of the financial position of the company. Investor Insights, and affiliates (II), publishes reports providing information on selected companies that II believes has investment potential. II is not a registered investment advisor or broker-dealer. This report is provided as an information service only, and the statements and opinions in this report should not be construed as an offer or solicitation to buy or sell any security. The above report is the opinion of II and is not a guarantee that the target price for the stock will be met or that predicted business results for the company will occur. II accepts no liability for any loss arising from an investor's reliance on or use of this report. An investment in STEH is considered to be highly speculative and should not be considered unless a person can afford a complete loss of investment. An affiliate of II has been hired by a third party (TFL), and has received fifty thousand dollars and two hundred and fifty thousand option’s to purchase two hundred and fifty thousand free trading shares of STEH at twenty five cents per share for sixty days, of which the option has been exercised in full, for the publication and circulation of this report. Subsequently II may buy or sell shares of STEH stock in the open market. Since an affiliate of II has been compensated there is an inherent conflict of interest. This report contains forward-looking statements, which involve risks, and uncertainties that may cause actual results to differ materially from those set forth in the forward-looking statements. For further details concerning these risks and uncertainties, see the SEC filings of STEH including the company's most recent annual and quarterly reports.
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For a 1st time visitor to STEH’s Website, this is what you would be prompted with:
Important Notice to SunnComm Shareholders and Prospective Shareholders SunnComm Technologies, Inc. is a Phoenix, AZ company whose stock is publicly traded in the Over-the-Counter (OTC) market under symbol STEH. Our 3-year old company is currently in the development stage of its life cycle and, to date, has earned only insignificant revenue from sales of its products. It is the intention of management to remain a non-reporting company listed on the "The Pink Sheets" until such time as the company reports significant sales of its technology. It is within the corporation's legal rights to elect this option. However, this means that you, the investor or interest-holder, will not be afforded public access to regular company audits and therefore you must solely rely on the company's press releases, news stories, or other publicly available information. Not having access to audit detail or other significant reporting dynamics can put SunnComm shareholders or interest-holders, at a significant disadvantage from a risk standpoint. Due to SunnComm's current, legal, non-disclosure status, your investment in SunnComm may carry with it an even higher degree of risk than that of other publicly traded companies which are currently fully reporting. Because of our non-reporting status, SunnComm's management feels you need to understand these very important facts prior to making a decision to invest in the company's shares, and you should also be totally aware that you run the risk of losing your entire investment should you make the decision to purchase shares in SunnComm. If you have additional questions regarding this notice or anything you may read on SunnComm's website, we urge you to contact company directly. Thank you for giving me this moment of your time. Please click the button below to acknowledge reading the above and to access The SunnComm Website. Thanks for stopping by, |
