Break down of the Bloomberg article...
Whiz Kid -- or Loose Cannon -- in Penny Stocks?: Susan Antilla
Whiz Kid -- or Loose Cannon -- in Penny Stocks?: Susan Antilla
New York, March 3 (Bloomberg) -- I don't have anything against 15-year-olds. There
is one in my house, in fact, who actually takes his plate out to the kitchen each night (He doesn't clean it every night!> <Just to start off with some comedy there...>
when dinner is over.
I listen to his opinions about movies, cars and bad trades by the New York Yankees. I
would not, however, even consider entertaining his recommendations on the stock
market, figuring that, at 15, his thoughts would be at best faddish, wide-eyed and
lacking in perspective. I think a different view in stocks is best
So why, I'm wondering with increasing alarm, are investors going nuts following the
advice of someone else's 15-year-old -- a very smart Teaneck, New Jersey, kid who is
the talk of investment message boards and whose own Web page is so popular that he
intends to start charging admission?
I learned of the influence of Dan Miller, a ninth-grader at The Frisch School in Paramus,
New Jersey, in trying to divine the reason for movement in shares of Filtered Souls
Entertainment Inc., a company that admits it has no significant sales or earnings and
whose stock had traded at 2 cents a share on a good day. Stock traded at 2¢ a share?! I am looking at the 52 week low here and I see 19/64... Also what does past thing have to do with present? MSFT traded under 1 if I remember? I guess they are junk... Also HEAL has traded at 150 in 93 that must mean that they are worth 150 now right? Main thing is that they never traded at 2¢ a share. Also I am a short term player so I dont care about that.
Shares of the Vancouver-based company, most recently involved with record
production, jumped 92 percent to 1 27/32 on Feb. 22 on unprecedented volume of
1.36 million shares. (Filtered Souls had traded 3,000 shares on the previous trading
day.) An analyst recommendation? Some great news about business prospects? The
signing of Mariah Carey?
It moved on the expectations of news coming which cameout the next day
High School Savvy
None of the above. The rally, as it turns out, came after the stock was touted by Miller,
the high school student who previously recommended penny stocks including MPTV
Inc., a time- share marketer, and WCTI, a provider of Web site search technology.
MPTV was a LONG time ago... why bring that up? How about AMIG...
Miller, not yet old enough to drive, good point touted touted is not the word... Recommended is more like it. Or else Merryl Lynch has been touting LU for years...Filtered Souls on the Internet and CNBC
made him the subject of a feature story. ''He's a young lad who apparently said
something on TV,'' Nothing on TV... But it is a quote so...says Ian D. Lambert, president of Filtered Souls. ''But I don't know
him, have never spoken to him and never saw him.''
Who needs to speak to the company when you speak to their promotors? TT Financials is being payed to give out information about the company. I did speak to him.
CNBC's story elicited so many inquiries that the network put directions to Miller's Web
page on its own Internet site. (CNBC could not immediately say whether anyone
mentioned Miller's stock picks on the air, although it did say that his stocks were not
mentioned in the feature story.)
Although Miller said in a telephone interview that he initially learned of Filtered Souls via
an anonymous e-mail, he took the initiative to call disc jockeys and find out what they
thought of the hip-hop records Filtered Souls was distributing. ''I got positive feedback
from them,'' he says.
Consider the Source Consider the source?! They know the music business better then anyone else. Are they trying to degrade disc jockeys as low lifes?
He moved on to read an ''article'' about the company on the Web page
aheadofthestreet.com, where ''the share information looked good,'' in Miller's view.
Business Financial Network, which produced the aheadofthestreet.com report,
predicted a runaway surge in the stock to between $8.73 and $14.25 over the next 12
months from less than 2 cents. It also suggested in an unwittingly hilarious disclaimer that
investors would be well advised to consult the company's annual report and quarterly
report -- documents that tiny companies like Filtered Souls aren't legally required to
produce. Key word there is legally. They can however give out financial information. Which is a goal of FSOL's. I don't have anything to say about the BizFn.com's thing about looking at past releases.
Miller says he's aware that Business Financial Network was paid a fee of $24,000 for
its rosy predictions, but that it was actually a press release, and not the report, that
''clinched'' Misquote, I don't think I have ever used the word clinch... his decision that Filtered Souls was ''an excellent stock pick.''
Yet the press release hardly had the stuff of great investment potential. Miller says he
was impressed that Filtered Souls mentioned ''big musicians'' including Bob Dylan and
Elton John in their press release, but it turns out those two artists have no affiliation with
Filtered Souls. (They did, however, once hire the public relations firm that Filtered Souls
has decided to hire.) That press release may have ''clinched'' his decision about Filtered
Souls, but it is curious to note that the release was dated Feb. 23 while Miller's
recommendation went out on Feb. 22. There was talk ''that news was coming,'' Miller
explains. 'Whiz Kid'
What?! The news was nothing?!. They single out the minor things in the news release. Lets go through the news release at biz.yahoo.com . Hardly anything minor. New vice president who is highly qualified for the job. A great new PR firm, Also a deal with one of the biggest companies in their industry?! Thats like saying if Microsoft made a deal with NETN that NETN is a bad stock... Thats not all. Also the company offering 300,000 shares to employees at 2.5, while the stock was at 2? I think that is saying something good about the company.
After news of his ''buy'' had hit the Web page Silicon Investor on Feb. 22, one early
posting on Silicon Investor at 10:01 noted that ''Daniel Miller, The
Whiz-Kid-Stock-Picker from CNBC,'' had done it again. A copy of an e-mail signed
''Dan Miller'' noted that volume began to pick up before he put out his recommendation
''because of the people who figured it out'' ahead of Miller's pronouncement. (Similarly,
Miller today told followers on his own Web page that he had intended to recommend
HealthWatch Inc., a software company, but that ''people found out yesterday.'' In early
trading today, HealthWatch rose 15/32 to 2 7/32, before falling back to a 3/16 gain.)
I give hints as we all know. That is called people figure it out...
On Feb. 22, Silicon Investor kept gushing. By 10:17, it posted an e-mail saying, ''Daniel
Miller is The Man. FSOL is soaring.'' At 10:36, someone calling himself Mr. Metals
said, ''This whiz kid is incredible. Looks like he has quite a following. Since he
announced FSOL at 9:45, it has shot up 150%.''
It closed at 2 31/32 on yesterday.
What Next?
Dan Miller's father, Leon Miller, says he's investigating his son's legal obligations now
that the boy is recommending stocks, buying shares of the companies he touts and
considering adding a fee for his followers. ''One of his friends made $8,000 last week,''
says father Leon. ''Not bad, huh?''
Son Miller, meanwhile, is all the rage at Frisch, having been pursued by print, broadcast
and cable reporters who are wowed by his investment prowess. ''People are saying
David Letterman is next,'' he wrote to ''Mr. Metals'' in a Feb. 23 e- mail posted on
Silicon Investor.
He may be popular. He may be bright. And his research may be a lot better than what
most investors do. But why didn't he get around to making that most important call of all
-- the call demanding that Filtered Souls management get on the phone and answer the
tough questions any analyst would ask? ''I've been at school,'' says Miller.
Talking with TT financials is the same as talking to the company. He is hired to give out information about the company. Same thing with Bizfn. I bet I do as much research on a penny stock than an anilyst could do.
But that
didn't stop him this morning. He released a recommendation of Canterbury Information
Technology Inc., using a school computer between 9:30 and 10 a.m. Eastern Standard
Time. By 10:30, the stock had more than doubled to 1 3/4, and Miller's Web page had
seen more than 1,000 additional hits.
Earnings are due on CITI. You don't need to call a company about that. The reason I picked them is because they are undervalued. Being undervalued is a good reason to buy a stock. Now they are even more undervalued with their positive earnings today.
The sudden spurt makes Stanton Pikus, Canterbury's chief executive, a little nervous.
''The less I know about this kid the better,'' he said. |
