TO RAVEN AND ALL:
About a year ago, when many of you know I started a newsletter with the help of someone I met online here, it was my intent to prove that there were indeed great companies worth investing on the pinksheets (OTC:BB) ... penny stock boards.. for some reason I actually saw the penny stock companies as being better values over the boring IBM's and MSFT's of the world... I was determined that people working together could easily find out which companies were worth investing into and which ones weren't... so that we all could benefit from our combined efforts, knowledges, and experiences...
unfortunately those who know the story, or most of it, realize that things didn't turn out the way I planned... and as a result, my wife and I had to file CH7 bankruptcy at court friday... it's done now.. very devastating for us... I felt I knew the market and that investing would be easy... at 23 years old (now 24)... I felt I'd be retired by the time I was 27 or 28...
I surveyed all kinds of stocks looking for signs of life, of an interesting product line or story, a savvy group of investors posting on the respective threads.. I had no clue as to what to really look for in determining a smart investment... I was nieve.
One of the earliest stocks I came across was TSIG... I talked with the company, read all that I could and decided that this company had a chance to compete with the likes of AMZN, KTEL, CDNW and NTKI... why I thought this?? I'm not sure... Compact Connection (which wasin the process of being acquired on paper by TSIG) certainly wasn't established and wasn't well known for selling its music.. there was controversy surrounding prior arrangements with distributorships and the mgmt of CCI... I talked at length with Rob Gordon one day and his PR rep... and took a detailed recording of what I could and even posted it here on the thread somewhere... (I think the link is on POISONTASTER's webpage)... I found the story intriguing and Rob Gordon to be a man of great insight and determination... however, time would show that what you hear from the company and what you actually see in writing and in the numbers can greatly contradict themselves... believing solely in the company mgmt and ignoring the numbers is NEVER a good idea... NEVER
I remember how Rob Gordon talked at lengths about huge business deals that he was working on (though he wouldn't disclose specifics).. and that he truly felt as though the company was on track for great success and that it wouldn't be too much longer before they could turn profitable... I remember him telling me that "by Q1 of 1999 we will be debt free"... and he expected significant revenue growth by Q2 of 1999... if not sooner...
Many of you remember that TSIG had made some very expensive purchases of teleservices equipment (though done improperly which cost the company thousands of dollars)... that was to be used for the ramping up of their teleservices (call center) department/division... Rob Gordon envisioned his staff growing in this area by several dozen to meet the needs of future projects pending... it was even his goal to "rent" this "state of the art" machinery to other companies and boast a profit that way as well as providing the normal operations designed within that call center...
I believe the stock initialy started around 25 cents and SHOT UP to 70cents or so at the beginning of me coming aboard (in which I didn't sell on the rise)... and then began to acquire all this DD as the price started to retreat.. I also think this was around the time that the first website was being developed for Compact Connection... Anyway, as time went by we began to learn more about what the significance was with THE CARD... a marketing tool designed to bring in new buyers of their music CD's/tapes and build consumer loyalty and exposure while keeping the cost of adertising down. In fact, THE CARD would in essence, pay for itself with every purchase. The company would actually post a profit on each sale of THE CARD before
a single music item was ever sold. I remember asking myself why no one else had thought of such an idea.
Well, they had. There are DISCOUNT BOOKS all over the place... one of the more famous ones.. who's name I can't place right now, my family buys every year. It's a big think book with coupons in it for discounts on anything from movies to music to dining to amusement parks to bowling to shopping. It has a membership card that you take with you wherever you go and many, many places accept it and many of the discounts require coupons be clipped from the book as well. However, the books are expensive to make and thus limit profitability, but regardless that company has no doubt made a hefty profit.
The fact of the matter was that TSIG seemed to be the only company that had thought of applying a discount card (THE CARD) to the internet and its vast consortium of products. Combine that with the ease of use of the NET today and the growing security on the NET and the fact that TSIG had a call center to handle 24 hour customer service for orders and questions to accomodate these new customers that THE CARD would attact... it seemed like a winning gameplan.
So I became a long term shareholder (in the penny market that means longer than a week) and have followed this company ever since. I haven't always held shares due to financial troubles as explained above.
I have been less vocal about my investing because of my poor decisions and because I've chosen NOT to let
investing online consume me like it once did. WIth penny stocks there is that ever growing uncertainty that haunts you each day and each tick that maybe the very moment you turn your back , the stock will crash to zero or will be haulted for a reverse split or an announcement will be made that the company is running a prostitute ring out of its corporate office. I assume that if ANY of you wanted reasonable, sustained gains for your investments that you'd be in no load mutual funds, working with fixed income... checking into calls and options and the like and hoping for a 20 to 30% return during this BULL market... but that's not good enough for us...
We look around and see penny stocks everywhere falling 80% in one day a rising 300% the next. The thought of taking $5,000 to $40,000 in a few short days or weeks (ugh.. Heaven forbig it takes 6 weeks to get 5000% returns)... is so addictive and enticing that we jump in head first without really accepting the risks. Subconsciously maybe we think that the less we know, the easier it will be to justify losing our money. We can say "I didn't know"... or "No one ever told me"... when the stock crashes.... it doesn't help our cause to promote the negatives, because that might scare off investors... this is why so many people literally PANIC when someone comes in and suggests some problems (red flags) with a company.
People know that with penny stocks the stock can be easily moved up or down with the slightest blow of the wind... and no one wants their leaves blown off the financial tree... so they are quick to hush down the
whistleblower... they are so involved in believing that the company they've invested into is going "to the moon" that they won't tolerate ANYONE saying ANYTHING that makes sense to the contrary of their
decision. No one wants to be shown they were wrong and certainly NOT when money is involved. Hard earned money at that. One thing that I've come to acknowledge is that a financially solid, resourceful and well managed company will NOT be affected by any person posting a few negative comments about their company, their product, their stock or their people. If the accusations are false, that will be proved in time and any effect those false rumors had will quickly disappear.... it won't affect the bottom line of the company. IF the rumors or accusations are true, then that too will show itself in the end.
Nothing I could say online about IBM or MSFT would cause the stock or the company to be financially devastated. I could slander/libel the company and it would go on ticking and I'd probably end up in jail or with a big lawsuit on my hands. The "dollar" drives the stock, not those who "hollar".
Not with "SOLID" companies anyway.
But then, how many solid companies are listed in these penny stock arena? More scams here than you can shake a stick at. And the best and the brightest con artists, know just how to get our money from us.
Invent fantastic stories, give excuses for why verifiable facts can't be found and put your best used car
salesman on the phone to do public relations. Before anyone knows whats happened, the next WD40 turns out to be nothing but hot air and someone has made off with hundreds if not thousands of people's
retirement money, college tuitions, and worse, money that was needed to simply put food on the table.
Money in the penny stock market can come and go like a Texas rainstorm.
IBM nor MSFT will not drop 80% tomorrow. You won't wake up tomorrow to find that MSFT was all a big scam and that monitors across the nation were injected with a blue dye and then magnetized to give you the illusion that there is actually a difference between Windows 95 and Windows 98... (hmmmm that's an
idea for another story sometime) ... nonetheless you get my point...
So even those who say they are "long" on a stock do worry from time to time about their investment. I don't truly believe that anyone who has been invested in penny stocks for awhile and who has seen how volatile these stocks are would truly purchase shares and then just let them sit without checking up on the progress of the company rather frequently unless that person has nothing to lose by seeing his stock value drop to the ground one day should it ever happen. I believe the majority of us can't let that happen.
But we do let it happen, because we are here. And with that we have made the decision to risk every last dime that we've invested with the hopes that by some chance we will strike the penny stock oil and find ourselves on a speeding train to new heights for our investment. 100%, 200%, 500%, 1000%??? What will it take for us to jump ship and walk away with bags and bags of new found weatlh?? Constantly we hear people saying how they "won't sell a dime until the stock reaches $10 a share"... yet the stock trades at 30cents... so a 2000% gain wouldn't be nearly enough to satisfy them. INCREDIBLE. I think comments like these are either made out of EXTREME greed or nievity. More likely greed as they hope to lead people into believing that the stock is so undervalued that only a "fool" would pass up on such a great buying opportunity... amazing... isn't it?! Why are we here?
Maybe we're hear because we want these small, unknown companies to have the funding/capital they need to even have a shot at being successful. Maybe we are here because we have a need to help those who want to embrace the American dream and run their own company. Most likely we are here because we're so tired of working day in and day out..... fighting for the scraps that Corporate America throws us in the back alleys of Wallstreet and we're not going to take it anymore. So we scrounge up what we have left and throw it all onto the roulette table called the Penny Stock Market and cross our fingers, close our ears, and hope for the best.
That's what I've been doing since early last year when I bought into TSIG. I must say that regarding the company I have been extremelly impressed right up until today. The management, though not in the timeframe that I would have liked to have seen, has accomplished the goals it set forth to its shareholders
who bothered to call and research and give its support. They have done even moreso than I ever imagined by brining in high officials very very well known companies like Cohesive. They broke off their engagement with an outdated, disorganized system called Compact Connection and evolved THE CARD into MYCARD and have since broadened the scope of their products to a wide variety of things from music to video's to
photo development to just about anything. Many of which can only be assumed by the domain names that have been locked up by TSIG, but nonetheless they are there and we have every reason to believe that
MYCARD will be offering consumers a great opportunity to save money on all types of household items and services. And of course, we can't forget the teleservices division which has been rather quiet as of late, but has had announcements of Spanish speaking representatives who will offer their expertise to that side of the marketplace and I'm sure they'll no doubt open up to other avenues as well.
Belief in the company and the products and the services and the people is only a part of it when dealing with penny stocks. You all want to make money right? To do so should mean that the company has to make money right?? Yes and No. If Microsoft (NASD:MSFT) posts record earnings and revenue growth the stock goes up. If people continue to believe MSFT will do so, the stock goes up. But what about with penny stocks? Does the stock go up if the company is expected to make money? What if it does make money? Does it go up automatically then? Can a penny stock go up and lose money or never have made money at all? Does this happen on Walstreet?
In most cases, Walstreet mainstream stocks will only go up if the perception is that the company will eventually turn a tidy profit, and is posting strong revenues. We've seen NET stocks like AMZN, YHOO, etc actually lose money and yet the stocks are trading at enourmously inflated PEs... this is because of strong revenues, HUGE exposure and belief that someday they will turn in the numbers.
Penny stocks are different. Penny stocks go up and down for no reason at all. Not good ones anyway.
They dont follow the market, they dont go down when the US enters into way. They dont go up when interest rates fall. Penny stocks go up on the slightest hint of a rumor that could add credibility that the company actually exists, or a well known stock promoter with deep pockets is buying into it, or there is a low flow and the market makers are willing to let the stock run to new heights so they can cash in with those lucky enough to know the signs of a pump/dump. Penny stocks by their very nature go down not up.
Walstreet stocks by their nature go up for the most part during bullish times. This is evident as you hear that "more stocks were up than down today as the DOW continues it's climb to x,xxxx.xx" and so on.
Yes, I'm simplfying the market factors greatly but I hope you see my points. The only way the penny stock moves up is with constant and continued buying fed by continued positive news from the company that good things are happening to legitamize investors reasons for buying that stock. If for some reason, a penny moves up for no reason, it will likely fall back for no reason as well. If the penny stock falls for no reason, it will likely stay there. That's the way it is. So how do you find a good penny stock??? Well, quite frankly you don't. But before everyone jumps into thier cards and heads down to the nearest courthouse to try and find my home address or some way of hunting me down, I should say that there is always a chance that a penny stock can make a person money over the long haul -- rare as it might be.
So far one year in TSIG has rewarded me with a loss but countless hours of reading and chatting and has become almost my substitute for television. In November of 1998, my wife and I started to realize that we were nearing the point of filing bankruptcy and I pulled my money out of TSIG and did some research and found a copmany with good exposure, solid revenue growth, good profits, a little unknown, and a reasonable float. The company as mentioned here before was trading under the symbol SNMM... I purchased my shares well under $1.00 per share and prayed that this stock could save us from filing bankruptcy. It wasn't long after that I began to get messages asking where'd I gone since I wasn't posting as
often on the TSIG threads. I stated what I had done and was beraded with reminders about how great TSIG was going to be and I found myself too believing once again in the reasons for why I got involved with TSIG in the first place. Did I really want to turn my back on a company with such a strong business model for one that was already producing results?? As crazy as that sounds, I actually sold my holdings in the company that WAS producing (SNMM) for around $1.00 per share and bought back into TSIG for about the same price I had exited. Just 3 months later SNMM went to $17.00 per share and could have saved my bankruptcy (had I actually been greedy enough to allow those shares to have sat there til the stock passed
$10/share)... but alas, I have even less money now..(although I didn't have very much invested in penny stocks by now because what little I did have left, someone on Silicon Investor convinced me to seek out some books on investment strategies and I learned that the penny stock market was not where I was going to grow my retirement funds)... but anyway, as it stands now I have no illusions that TSIG is going to make me wealthy someday. TSIG will not turn a few hundred dollars into $10,000 anytime soon.
Which brings me to commenting on TSIG's stock price and how I see it now... for months we've seen "sustained" (key word here)... news releases from TSIG and yet the price has yet to climb to anywhere near that many of the more savvy investors or more vocal investors here have thought it would.
Certainly as I mentioned above, no one here invested into TSIG with the hopes that someday it would hit 50cents a share. Again, penny stock investors dont seem to settle for anything less than 50,000% returns...
so the minimal gain from the 20 cent range to the 40cents range hasn't been well receieved...
Everytime good news comes out which would lead one to believe that this company is on track for great success in the future by way of partnerships, contracts, alliances with the likes of Cohesive, National Music Foundation, Babe Ruth League, Kodak, etc... the stock is met with a barrage of selling.
I have begun to and have been wondering for some time now why those parties involved in such deals would
join forces with a company listed on the lowly penny stock OTC boards?? Don't they do their homework?
Don't they know about all the scams that find themsevles trading here? Do they want to be associated with
con artists and thieves? The answer is evident: of course not. So unlike most other penny stock companies,
TSIG has enough references to convince me that this is no scam and that the management is at least capable
of presenting itself as a viable partner or provider.
I began then to ask myself if this penny stock company was going to be creating these multi hundred dollar revenue projects, then why aren't those "in the know" telling their friends and families and partners and brokers and garbage collectors to buy this stock? Why is there not more buying pressure than what we have
seen? Surely these people have deep pockets and want to collect as many shares as possible on the open
market? But then it hit me. Why buy on the open market if you can buy at a discount? Preferred shares and the like. REG S, floorless debentures... whatever. But what some of them may not have realized, because even though they are knowledgeable in their workplaces, they could not possibly understand the complexities involved in getting a penny stock price to continue appreciating over long periods of time.
Some of them may very well know what they're doing and quite possibly are shorting against any shares that were given to them and by driving the price down they can convert at much, much lower prices and win twice... once by selling shares high that they didn't own.. the other by converting at extremely low prices thus giving them that many more shares (if they believe that someday the company will in fact make it to Walstreet)... if they don't think it'll make it, then they have 100% interest in shorting the stock to zero..
once a stock is delisted they wont have to cover at all... and they keep all the money they had.. plus in alot
of cases they dont have to honor their contract with the company for the shares they got (there are stipulations to this I'm sure)... but I think I've shared the basics on this thought...
So that is a concern for me. What is being done with the shares? Who has been selling? Why isn't the good
word of what this company has been predicting and publicizing spreading further than just Silicon Investor.
Some would say because of the PR firm. Okay, let's see what they can do. They are going to have to really
bring in some buyers with extremely big pockets to counter any shorting that might be going against
the box. And with the maximum number of shares near its limit, one has to wonder if a reverse split is in the near future. I actually would be FOR a reverse split as long as the company announced it ahead of time and
stated in detail why they felt it necessary. Investors don't like surprises as was evident today in trading.
I'm getting tired so I will finish this rather abruptly and I apologize for that, but I will say that I think TSIG has a great business model and very credible alliances formed and will continue to prosper and I expect them to turn a tidy profit by year's end. But I dont think that TSIG yet fully understand how to work within the
confinements of the penny stock world, nor do I think that they have done everything within their power
to maximize shareholder returns for us. I think that the damage that has been done as of late will haunt this
company for some time, but will eventually be shadowed by growing revenues and profits but it's going to take time. It can take months and months if not years to recoup from floorless debentures or any sort of debenture/stock swap that is done hastily in order to keep the company afloat. Some will say that they did
what they felt they had to to stay alive. Okay, that is fair. But that doesn't mean that we as shareholders
are going to be rewarded any time soon. The question now is whether we feel the company can do anything to move the stock price up, and up so high that we'll be happy selling. If you haven't set a target price for
what you're willing to sell this stock at then why are you here? Will you not sell at $1.00, $5.00, $100? per share? Secondly, you need to then ask whether or not this company is capable of seeing it's stock move
legitimately to that price. Finally you must ascertain how long this process will take. If you don't see any
of these things happening to your liking then why are you here??? If you do see these things happening, then why worry? Either you believe or you don't. And, yes, it's wise to re-evaluate the company from time to time and you might find your targets changing here and there. But just be smart about your money.
If you feel this company can do great things (and I still think it can), but feel that some things have happened
as of late that will keep the stock price down for some time, then consider bookmarking this company and
follow it closely, but allow yourself to put those funds into more secure stable investments that WILL
make you money as this bullish market continues... when the time is right for you to come back into
TSIG, you hopefully will have that much more buying power. You might pay a lower price and even get
more shares. However, you might pay a higher price too and get less shares. That is something you have
to decide. There is a part of me that would rather sell this stock now and buy back when it finally breaks
70cents again and shows no signs of slowing and the mainstream gets wind of it and all fingers are pointing
to a true NASD listing, then to just sit here and wait for months and months and months watching other stocks/funds go up and up and up.. only to watch this bull market go right out the door.
TSIG should succeed, it's just a matter of where and when and with whom. As far as penny stocks go,
it's a plausible company... the stock simply needs to catch up and it needs help from management if that's going to happen anytime soon.
jimb
ps... some of you won't like this, some will hate it... some might find it at least worth the time to read, and most of you will never read this line because you will have fallen asleep or clicked past the first paragraph and onto some other post... I feel much better sharing my thoughts... it's been a long time coming.. and I haven't even gone back to proof this so sorry about errors.. I'm tired and my stomach hurts.. goodnight.. I"ll post again next year. Good luck to us all in our investments. By no means am I telling anyone to buy or sell anything... see a professional.. someone who knows what they're talking about... I don't. (ask me before plagerizing please) |
