is... in Afghanistan
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I'd say that I gave great advice for the novice trader. I don't deal in superlatives such as using "every" when saying penny stocks are not a gamble. Best to avoid things like "always", "never", "every", etc. There are always exceptions. Let's just say that some are less of a gamble than others. You never know what will happen next, but if the company looks good on paper, and doing the right things, then the stock price does have a tendency to reflect the value of the underlying company at some point in time. Market fluctuations based on world events can have an effect short-term. I'm glad you are confident that $AFPW will succeed. Just wish the performance matched your enthusiasm. Or, put another way, wish the lotto balls were showing your numbers.
One big reason I don't see a 600k market cap in the future is that the tax deferred assets alone make the company worth much more than that as a takeover bid.
I think you can reach more by having a realistic and logical approach. I don't think $AFPW will go to .0001 as you have posted. I do believe that, in the absence of positive revenue news (i.e. new contract) that there will be continued downward pressure as the notes are converted to shares. If all 3 billion shares were issued, a share price of .0001 x .0002 would equate to a 600k market cap. I doubt we would see that low of a market cap. It would require another increase in A/S for that to occur. I do think it likely that we'll see .0004 x .0005 in the near-term (assuming the present trend continues). $AFPW is just two ticks away from that share price. Of course, one big PR would be a game changer.
It's all good. I honestly would love to see $AFPW succeed. Like I said earlier, one good contract with enough revenues can turn the balance sheet around. Toxic financing is currently winning the battle, but that doesn't mean $AFPW can't win the war.
It's true that my approach is very logical and unemotional. When it comes to stocks, the heart should always follow the head. As Jim Cramer says, it's not "buy and hold", it's "buy and homework."
Do your due diligence, then make a decision whether or not to buy. Then you have to continue to do your homework to determine if the reason you bought in the first place is still valid.
Unfortunately, most penny stock players fail in this area.
They buy based on hype, get mad when the price drops (often due to dilution), and then they "average down" into the continued dilution and become bagholders.
Most diehard longs can't keep up with dilution.
In the end, they see some other shiny object on another stock forum, sell and move on, and rinse and repeat.
Of course, everything posted in a stock forum is an opinion. I just like to make my opinions educated and informed. Even I sometimes miss the mark. We're all human.
Your sarcasm is misplaced. Remove the emotion. When it comes to investing, emotion should always follow logic, not precede it. I have done nothing more try to appeal to people's logic. I'm not advising anyone to sell. I'm certainly advising people to think logically when it comes to "averaging down" or buying an initial position.
Not every penny stock is a gamble. There are small businesses with responsible leaders with a sound business plan that are trying to grow their businesses. Prices may fluctuate, but in the long-term, stock prices still have a tendency to follow the perceived value of the underlying company, regardless of the exchange for which the stock is traded.
I wouldn't call my post a "gross oversimplification."
It's just simple math, looking at share structure, the balance sheets, and debt via debentures that result in continued dilution.
More often than not, it is best to apply the KISS principle.
Your correlation between the number of increasing negative posts to the possibility of future orders by the Air Force is illogical.
The number of negative posts seems to have remained pretty constant for weeks, and if they correlate to anything, it is to the continued drop in share price.
As a matter of fact, most stock forums have far more negative posts and "bashers" when they experience the drop in price as experienced by $AFPW. And, most of those negative posts are from current or former longs. $AFPW has faired very well in that area.
I don't subscribe to conspiracy theories of nefarious acts committed by untold individuals that want to drive the price of a penny stock price down.
In the end, they never pan out, and it always ends up being a result of something much simpler. I'm providing a definition of Occam's Razor below for your benefit.
You may not be terribly worried about current share price, but there are others that are concerned, and others yet that are continuing to throw more money at bad money when there are other places to put that money.
Occam's razor From Wikipedia, the free encyclopedia
Occam's razor (also written as Ockham's razor, Latin lex parsimoniae) is the law of parsimony, economy or succinctness. It is a principle urging one to select among competing hypotheses that which makes the fewest assumptions and thereby offers the simplest explanation of the effect.
The principle is often incorrectly summarized as "other things being equal, a simpler explanation is better than a more complex one." In practice, the application of the principle often shifts the burden of proof in a discussion.[1] The razor asserts that one should proceed to simpler theories until simplicity can be traded for greater explanatory power. The simplest available theory need not be most accurate. Philosophers point out also that the exact meaning of simplest may be nuanced.[2]
http://en.wikipedia.org/wiki/Occam's_razor
Is it laughable? Please read this entire post, and then make your own determination. I'm writing this for your benefit, and the benefit of others.
I'm writing this because throwing more money at bad money is more often than not a bad decision in the penny stock arena.
I'm not bashing. And I'm not trying promote one stock at the expense of another.
The purpose is to compare two similar penny stock companies trading with similar market capitalizations.
I am going to post the other company's stock symbol because this is for comparison purposes to highlight the value of $AFPW; perceived or real.
Now, having said all that, let's compare $AFPW with $AFTC.
As stated earlier, both companies have the same market capitalization at just under $900k. AFPW has an O/S of around 1.4 billion @ .0006. AFTC has an O/S of 558 million @ .0016.
Both companies have government contracts. $AFPW has contracts with US Air Force, as well as other contracts in the works. $AFTC has contract with US Army, as well as other contracts in the works.
Both are small businesses with owners trying to grow their businesses.
I'm not going to get granular with this. Just going to keep it simple. Let's compare the key factors that drive share price.
Share Structure:
1. $AFPW has increased A/S twice since August of last year from 510,000,000 to 3,010,000,000. O/S has increased to over 1.4 billion. O/S went from around 500 million in August to 1.4 billion today.
2. $AFTC has not increased their share structure, and O/S is stable at 558 million. CEO has publicly stated that he has not, nor will not increase O/S and create dilution. Reason why? He doesn't need to.
Debt:
1. $AFPW has issued numerous debentures that can be exercised at some point and subsequently increase O/S. $AFPW issued these notes because they need to raise money to keep the doors open. I believe $AFPW still owes for past due rent. As per filing, $AFPW needs to raise $1.2 million for operations this years. I don't quite understand where this $1.2 million figure comes from, although obviously $200k salary for the CEO is probably part (yes, I know some people think $200k for a CEO of a non-profitable penny stock is acceptable).
2. $AFTC balance books are cash positive. In other words, they brought in more money (from the government contract) than what they have had to spend. On top of that, the company has been very frugal in its spending, caring for six employees and making capital purchases on very expensive equipment at bargain prices. $AFTC has about $120k cash in their checking account, and is not trying to raise money to keep the doors open. CEO is not overcompensating himself, and is actually making sure his employees are taken care of first, deferring own income.
Revenue:
1. $AFPW does have some revenue. Unfortunately, the revenue generated is far below expenses. Off the top of my head, $64k for the Air Force contract, and around $4k for the UUV contract. The cost to generate that revenue has been huge.
2. $AFTC has around $200k revenue from the US Army contract. $AFTC has managed to keep their operating expenses below revenue.
Scope of Operations (future potential revenue):
1. $AFPW has technology that does have numerous potential applications. But, marketing has been focused on very small segments. Let's face it. They're not trying to get their technology into every home. Sometimes it's good to go after a niche market. But that niche still needs to be lucrative (profitable). Otherwise, all you have is an expensive hobby.
2. $AFTC also does not have technology that will go into every home. But, they do have a technology that can decrease fuel operating costs. For the government and trucking (transportation) companies, this is pretty big market to go after.
Now, assume you you were not long $AFPW, and your decision to invest was not influenced by the fact that your current investment is in the dumps.
Assume you were evaluating companies to make an informed decision.
Given all this info, if you were a potential investor, and were looking at the balance sheets, share structure, and business model, with which of these two companies would you invest?
And, to the point of this message, if you have another (similar) company with the same market capitalization that looks much better on paper, then what does that say about your own market capitalization?
A shell costs you about $250k - $400k (last I checked). $900k market cap can be considered high for $AFPW given their balance sheet, share structure, and performance. Especially given the constantly increasing share structure and lack of interest to "gobble up" those shares.
With $AFPW deferred tax assets, it is actually worth more right now as a shell.
Footnote: $AFTC financials can be seen at:
http://www.otcmarkets.com/stock/AFTC/financials
$WYNN - how low will she go? Been watching it, but hasn't seem to have found a bottom. Fundamentally, don't know what's up with the stock. But technically, it's fugly.
Yeah. Was thinking the MAY GLD $154 may still be playable. Just watching now.
Yeah, been watching the MAY GLD $154, $155, and $156 calls.
I meant for your LNKD target of $135. JUN calls?
Are you talking about the JUN calls?
Was just noticing the May 19th $65 calls were just .01. Guess nobody thinks they'll bust $65 by tomorrow.
WMT. Opinions? RSI getting close to 70.
GM everyone. Hope all have a profitable day. Just getting on and getting caught up with the activity. Something to do while I'm on shift.
Gratz. Will probably do the same. Still waiting for my account to get upgraded to options.
Facebook: Betting on a drop?
Been thinking about Facebook, and seeing that they are increasing the IPO by 25%, with a potential market cap of $16 billion. To be honest, I don't see their revenue from advertising being sufficient to support such a market cap. Quite simply, most FB users simply ignore the advertising, and the ROI is very questionable.
I think there will be a lot of FB puts being placed for lottery purposes.
Article below on GM dropping Facebook as an advertiser.
GM to drop Facebook ads due to low consumer impact
..By Ben Klayman and Alexei Oreskovic
DETROIT/SAN FRANCISCO (Reuters) - General Motors Co said on Tuesday it will stop advertising on Facebook, even as the social networking website prepares to go public, with a source familiar with the matter saying the automaker had decided Facebook's ads had little impact on consumers.
The decision by GM, the third-largest advertiser in the United States, marks the first highly visible crack in Facebook's strategy and underscores doubts about whether advertising on Facebook works better than traditional media.
"This does highlight what we are arguing is the riskiness of the overall Facebook business model," said Brian Wieser, Internet and media analyst at Pivotal Research Group.
"It is not a sure thing. It sure looks likely that it will be one of the most important ad-supported media properties, but it's not certain because there will be marketers who are challenged to prove the effectiveness of the marketing vehicle."
For now, these worries do not appear to be impeding strong investor demand, with Facebook Inc increasing the size of its offering by 25 percent to raise about $15 billion, a separate source told Reuters on Tuesday.
Facebook, founded eight years ago by Mark Zuckerberg in a Harvard dorm room, is expected to start trading on the Nasdaq on Friday.
GM said it will still have Facebook pages, which cost nothing to create and for which it pays no fees, to market its vehicles and added that it is not unusual for it to move spending around various media outlets.
"In terms of Facebook specifically, while we currently do not plan to continue with advertising, we remain committed to an aggressive content strategy through all of our products and brands, as it continues to be a very effective tool for engaging with our customers," GM said.
Facebook declined to comment on GM's move.
SOME IN FAVOUR
Concerns about advertising on Facebook are not confined to GM, with an executive at another large consumer products company saying it was hard to know if it is worth the money spent.
"Is it just a shiny new object, or is it a real value proposition?" said the executive, who asked not to be identified.
But Ford Motor Co said it was committed to advertising on Facebook and is boosting its spending, including ad buys.
"You just can't buy your way into Facebook," said Ford spokesman Scott Monty. "You need to have a credible presence and be doing innovative things."
More than 20 percent of Ford's marketing budget is spent on digital and social media, he said. The company launched its 2011 Explorer SUV on Facebook and other digital outlets for a fraction of the cost of a Super Bowl TV spot, which cost $3.5 million on average per 30 seconds this year.
Another fan of Facebook is Japanese automaker Subaru, which started using banner ads at the website in the past year in addition to its free content. "Advertising plus content equals more clicks to our website, which we like," Subaru spokesman Michael McHale said.
GETTING GLITZY
Facebook has ramped up its outreach to Madison Avenue in recent years. Last year Facebook hired Carolyn Everson, an ad industry veteran who worked at Microsoft Corp, Viacom's MTV Networks and Walt Disney Co, and the company hosted a splashy event in New York in March to showcase its newest ad offerings.
John Battelle, chairman of the Internet advertising network Federated Media, said Facebook may need to invest more heavily in building relationships with major advertisers.
It may also need to develop richer, more customized advertising offerings, even though such efforts would likely be less profitable than traditional display or pay-per-click advertising.
"GM is a warning shot across the bow," said Battelle.
GM, which ranks behind Procter & Gamble Co and AT&T Inc in advertising spending, spent $1.1 billion on U.S. ads last year, according to ad-tracking firm Kantar Media.
It spent about $271 million on online display and search ads excluding Facebook advertising.
GM spends about $40 million on its Facebook presence, but only about $10 million of that is paid to Facebook for advertising, according to the Wall Street Journal, which first reported GM's plans to drop Facebook ads. The remaining budget covers the creation of content and the advertising and media agencies involved, the newspaper said.
(Additional reporting by Deepa Seetharaman and Bernie Woodall in Detroit, Jim Finkle in Boston and Martinne Geller in New York; Editing by Leslie Gevirtz, Matthew Lewis, M.D. Golan and Edwina Gibbs)
http://finance.yahoo.com/news/gm-drop-facebook-ads-due-003650789.html
Was blaming iHubs problems on something totally unrelated. 12:01 AM PDT this morning, Blizzard Entertainment launched Diablo III. All at once, millionf of people all over the world tried to log in to play. Brought the servers to their knees. Took hours before people could finally log in and start to play.
It's all the people playing Diablo III that is slowing down the internet.
Sort of meh. Gold has enjoyed a 5 year bull run. People are bored with it, and its time has come.
Thought you'd be interested in the GRPN part.
Top Stories
German recovery helps eurozone avoid recession. German GDP rebounded in Q1 to rise 0.5% on quarter, more than double forecasts of +0.2%, boosted by exports to emerging markets. France showed zero growth and Italy experienced a worse-than-expected 0.8% contraction, which means that it was mainly Germany that helped the eurozone record flat growth in the quarter and avoid a recession. Opinion: U.S. vs. Europe: Who's winning now?
Facebook increases IPO price range. Facebook (FB) has raised its IPO price range to $34-$38 a share from $28-$35 in response to heavy demand. The new range would give the company a market cap of $93B-$104B, and at the midpoint, the firm would raise $12.1B in its sale of 337.4M shares. Opinion: When to unfriend Facebook's stock.
Coty abandons Avon bid. Coty has withdrawn its $10.7B offer for Avon (AVP), saying the cosmetics direct seller had missed its deadline to start talks. Coty Chairman Bart Brecht said, "I find it remarkable that since we made our revised proposal ... no one from Avon's Board or management has been willing to speak with us." Remarkable? Really? Avon had always been an unwilling bride. Shares were -14.1% premarket. Market Currents: A timeline of the Coty-Avon saga.
Top Stock News
Amylin attracts the big guns in sale process. Amylin Pharmaceuticals (AMLN) has drawn interest from potential suitors, including Pfizer (PFE), AstraZeneca (AZN), Bristol-Myers (BMY) and Sanofi (SNY), Bloomberg reports. They've all signed confidentiality agreements with Amylin, which has a market cap of $4.15B, and first-round bids are due in the next two weeks. Opinion: Takeover likely at Amylin.
Home Depot slides after revenue miss. Home Depot (HD) shares fell 4.3% premarket after Q1 EPS of $0.65 was in line but a revenue increase of 5.9% to $17.8B missed consensus. The retailer expects 4.6% sales growth for the full year, for which it raised its EPS guidance to $2.90. Opinion: Time to take profits in Home Depot.
Groupon surges as it returns to profit. Groupon's (GRPN) Q1 earnings beat consensus as it made its first operating profit in two years, helping to send shares 17.9% higher in AH trading yesterday. That added to a jump of 18.5% in regular hours. Operating income was $39.6M and EPS $0.02 as marketing costs fell 25% on quarter, while revenue soared 89% on year to $559.3M. The company also provided guidance that was mostly higher than forecasts. Opinion: Groupon's earnings beat estimates.
Interim Yahoo CEO could get job on permanent basis. New Yahoo (YHOO) Chairman Fred Amoroso wants interim CEO Ross Levinsohn to receive the job permanently, the WSJ reports. Levinsohn said it's too soon to talk about strategy but there won't be major changes following a recent reorganization initiated by the ousted Scott Thompson, who will keep $6.5M in bonus money and already-vested equity but won't receive any severance pay. Opinion: Time to buy Yahoo?
JPM mulls reclaiming incentive pay; annual meeting due later. JPMorgan (JPM) will consider bonus clawbacks following its $2.3B trading loss, Bloomberg reports, after news that outgoing CIO Ina Drew could receive $14.65M of accelerated equity awards. Later, the bank is due to hold its annual meeting, where it will face proposals for a revamp of its risk committee, and to strip Jamie Dimon of the chairmanship in favor of an independent. Opinion: Jamie Dimon's failure.
GM interested in Ally's international ops. General Motors (GM) wants to buy troubled Ally Financial's global businesses, Bloomberg reports. The move could help Ally repay a portion of the $12B tab it has with U.S. taxpayers. Discussion: GM comes full circle with Ally Financial.
Panasonic, Sony eye TV JV. Panasonic (PC) and Sony (SNE) are in talks to form a joint venture that would produce OLED TVs, with the goal of commercializing sets by 2015, Nikkei reports (via Reuters). Though offering superior image quality and lower power consumption than LCD TVs, progress in mass-producing OLED sets at a reasonable price has been slow, much to the chagrin of Universal Display (PANL). Opinion: Likely winners from the retina revolution.
Feds crack down on "pump and dump" scamsters. Regulators yesterday halted trading in nearly 400 microcap stocks in one of the SEC's biggest efforts yet to crack down on potential fraudsters using "pump and dump" tactics before they occur. The action is a big move for the agency as it attempts to sort through nearly 3000 companies on the OTC Pink Sheets that provide no financial information. Opinion: Top 10 U.S. small cap ETFs.
Top Economic & Other News
Greek president to propose technocratic government. Greek President Karolos Papoulias will ask deadlocked politicians to allow a government of technocrats to take over and steer the country through its bailout, although Papoulias' prospects of success are slim as the anti-bailout party SYRIZA has already said it won't agree. Despite the turmoil, Reuters reports that the government will be able to repay €430M in bonds that mature today. Opinion: A Greek exit would kill the eurozone.
Hollande to meet Merkel after being sworn in. Francois Hollande has been sworn in as French President and is now due to fly to Berlin for his first meeting with Angela Merkel. They'll probably put on a united front but it might be different in private. Merkel openly supported Sarkozy during the campaign, while Hollande wants to soften austerity with "the indispensable stimulation of the economy." Opinion: Hollande and the division of banking.
Moody's wields the knife on Italian banks. Moody's has downgraded 26 Italian banks by one-to-four notches, citing an economy back in recession, mounting asset quality challenges, and restricted access to funding markets. The ratings outlook for all of the affected banks remains negative. Opinion: Thoughts from the frontline.
EU to take action against Argentina at WTO. The EU plans to file a trade suit with the WTO against Argentina's import restrictions, Reuters reports. It would mean "very serious trade sanctions for Argentina" if the EU wins. The suit is said not to be directly linked to the country's decision to seize control of Repsol's stake in YPF, although that was "the straw that broke the camel's back." Opinion: Argentina's protectionism threatens foreign investment.
Today's Markets:
In Asia, Japan -0.8%. Hong Kong +0.8%. China -0.3%. India +0.7%.
In Europe, at midday, London flat. Paris +0.5%. Frankfurt +0.2%.
Futures at 7:00: Dow +0.4%. S&P +0.45%. Nasdaq +0.6%. Crude +0.1% to $94.84. Gold -0.15% to $1558.60.
Today's economic calendar:
7:45 ICSC Retail Store Sales
8:30 Consumer Price Index
8:30 Empire State Mfg Survey
8:30 Retail Sales
8:55 Redbook Chain Store Sales
9:00 Treasury International Capital
9:30 Fed's Duke: 'Prescriptions for Housing Recovery'
10:00 Business Inventories
10:00 NAHB Housing Market Index
Notable earnings before today's open: DKS, HD, SKS, TJX
Notable earnings after today's close: CIM, JCP, PAAS, SINA, TUMI
GM all! Will be following everyone's actions again, just like yesterday. Hope everyone has a very profitable day.
Thanks everyone. Followed everyone throughout the day. Finished off the day smarter than when I started. Cheers!
LVS 45 Puts starting to look sexier.
yep, been watch LVS move up. Looks like it is retracing a bit right now.
Interesting that ATVI is down slightly today, yet Diablo III launches midnight tonight. Diablo III is going to rock sales. I already have it downloaded and installed, and can't wait to rock it 8:30 AM tomorrow (my time).
Funny how Cray Computing used to be the cutting edge in supercomputing. How the mighty have fallen...
LVS $50 Calls? Doesn't seem like the chart has found a bottom yet.
Thanks!
Was just looking at LVS $45 puts. Not quite a nickel, but possible.
Agreed. Looks like a battle between the $75.00 puts and the $80.00 calls right now.
Yep. Ate dinner before market open.
Yep. 512k satellite provided by company. Working as contractor over here.
Must be that craptastic Afghanistan internet.