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SD -- The 30% margins are misunderstanding. The filings state that SNWT expected to grow margins by 30% in order to make up for revenue lost.
My estimations may be wrong, but I estimate SNWT to make substantially less than 10% net margin (10% is pretty optimistic based on industry peers). On 6$M revenue, that would be $600k = 3 cents per share (0.6 cents post split).
Growth through acquisition is usually not valuable. Management usually overspends a great deal which destroys shareholder value.
Wait for the next 10-K or 10-Q to come out. It will tell us who was right.
Sponge -- Business might be good. However, as an long-term investor, you always lose if you buy in at the peek of a price bubble. No stock (going concern) ever was worth more than 60 times net earnings. SNWT seems to be priced at around 300 (and this with optimistic assumptions).
Simple example: Microsoft (MSFT) currently trades at 17 times earings at a price of $28. With 300 times earnings you would have to pay $486 for one share. How long would it take MSFT to grow its value up to that level?
Sponge -- Are you mainly investing alongside flashy press releases and good looking products?
Price is what you pay, value is what you get ... have you checked revenues and margins?
My estimation is that no shrewd investor would never buy SNWT at today's prices. With only 5 cents revenue per share and industry margins at best at 10%, the PE is around 300. See my estimations here (the tone of my postings is not so positive, sorry, but that's what the facts are leading me to):
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=42284493
Did you ever think about price, Sponge? What is your estimation of intrinsic value here?
I mean, if you are just a trader who doesn't care much about value, I'm fine with that. But I wouldn't call that invsting then.
Cheers,
Value
P.S.
Penny stock land is not the place for investing anyway. Particularly when management gets invovled with stock pumpers. In the end, the price always collapses.
SD -- Thanks for your levelheaded response. Appreciate a rational discussion. Very much so.
So your understanding is that the merger was intended to allow SNWT to go public with the non-operational corporate shell of HBSY. I had thought that it had been the other way round, thought that SNWT had acquired another set of shady projects to spin their "we are a great company with wonderful prospects" scam. Makes sense. Look like I have been wrong here.
If SNWT is now really governed by a new management and Harry Masuda is simply administrating HBYS liabilities and assets, the concern of stock fraud is alleviated.
However, one aspect still smells a little fishy: Why did the new management get involved with fraudulent stock operators, paid them large sums of money in the best HBSY tradition (actually more than estimated net profits)? Is this simply Harry Masuda's unfortunate influence or is something else going on?
What do you think?
Harry Masuda charged with security fraud
Steve -- You decided to believe in Mr. Masuda's integrity. I don't. May I suggest to look a little closer at this gentleman. His track record speaks against him. Furthermore, the SEC seeked to barr Mr. Masuda from acting as officer of any publicly traded company. At the moment, I don't know how this played out. However, this would explain why he can took the role of a consultant to SNWT. Will not barr him from receiving nice fees for his services.
See here:
http://www.zoominfo.com/people/Masuda_Harry_16665128.aspx
<<Mr. Masuda recently became the subject of securities fraud charges - see "PROPOSAL NO. 1 - - Indemnification">>
"Securities and Exchange Commission announced that they were bringing securities fraud charges against Mr. Masuda and us, for allegedly paying an unregistered broker"
http://www.sec.gov/litigation/litreleases/lr17659.htm
"The Securities and Exchange Commission today charged nine individuals and entities in connection with the fraudulent offer and sale of securities in three companies that develop medical devices and software for health care professionals."
"The defendants conducted these offerings between 1997 and 2000 and raised over $13 million from approximately 670 investors throughout the United States. The offerings were fraudulent because the defendants falsely stated that the funds would be used for business purposes when in fact a substantial portion of the offering proceeds went for undisclosed cash commissions to the persons who organized and conducted the offerings."
"barring Matson, Masuda and Braunberger from acting as an officer or director of any publicly traded company"
Steve -- Thank you. I have read this announcement already. It's full of legal fluff as this stuff usually is (no red flag in this regard).
But what do you think, what happened to HBSY "management"? Did they disappear into thin air?
And why would a sound firm merge with such a shady pennystock machine as HBSY was?
What I get from the filing is the following: "Following the Effective Date, Harry Masuda shall be engaged as a consultant to Human BioSystems to assist Human BioSystems in the raising of additional capital."
My interpretation: The key operator of HBSY etc. Mr. Masuda (with a reputation of stock manipulation and personal enrichment) is still pulling the strings at SNWT. The engagement with the many questionable penny stock operators indicates his influence.
What do YOU think?
Sponge -- You are right. The 1:80 split in March 2009 was indeed a reverse split, meaning that 80 shares were combined into one (with 80 times the value). Apologies for my misreading.
I was misled by the long-term chart, which shows a stock price of $130 in 2001. In fact, this high stock price is exactly the result of the reverse merger (the stock never traded at these highs, it's simply recalculated in order to adjust for the massive 1:80 reverse-split).
Nevertheless, the chart demonstrates very clearly that a LOT if shareholder value was burned by HBSY (and preceding companies) "management". Where did this cash go? The filings speak a clear language: Management compensation, stock promoters and (to a much smaller extend) expenses of a running concern. Makes you wonder what the real intention of these string of companies was other than an income machine for "management" (and stock promoters). In any case, payouts to promoters and company executives has been a high multiple of any net profits ever achieved.
What do you think, Sponge? What led you to make your bold investment decision?
SD -- I don't understand where SNWT management has gone. My understanding is different from yours.
In my eyes, the reverse merger was a takeover of SNWT by HBSY (and not the other way round). Otherwise, it would have been a forward merger. Therefore, HBSY took over SNWT but is using the corporate hull SNWT for their "business" (which was trying out many things and skimming equity). So far they tried renewable energy (prior to Human Biosystems) and bio research. So far, everything failed (which is actually normal for startups). However, I don't like the involvement with stock promoters of shady reputation. That's a dark red flag.
Where is HBSY management now? And what makes you believe SNWT is run by completely different people?
Thanks,
Value
Steve -- Thank you for clarification. I conclude that 26 Oct is the date where my shares will be counted.
The new shares with 1/5 value will then trade from Nov 3rd. This is also the day my broker will demand 5 times the collateral for my short position, $50,000 instead of $10,000.
Cheers,
Value
P.S.
Are you serous "split makes shaeres more affordable for retail investors"? Big deal from $1.30 down to $0.25? (o;
Thank you Sponge -- Seems I got something wrong here. Thank you for your clarification.
What exactly is the consequence of the date Oct 26? Would appreciate your explanation.
Thanks,
Value
Hey SD -- Thank you for a great contribution. Finally, we get a discussion going with real background info. You are addressing some points that I may have got wrong. Please note that my intention is not to misinform. Trying to get as objective as possible.
Together, we will raise the quality analysis of SNWT to a higher level.
Soon more thought. Thank you again. Appreciate your posting very much.
Cheers,
Value
Amazing ... Look at these charts
Both my broker and StockCharts.com managed to put together the past stock data of SNWT (when it running under tickers such as HSBY "Human Biosystems").
See yourself how much shareholder value was destroyed in the past.
You will understand the reason why this company is changing its ticker symbols like other people underpants. There is a reason why shady pennystock operators receive millions of dollars (more than net profits) for promotion. Guess what happened with the equity money this company is raising again and again.
Note that this very management made another 1:80 split effective March 4th 2009. Look at the chart how that played out for stockholders.
More info follows.
Holding or not, that's the question.
This fishy split has the intention of getting rid of shorts. It will very likely fulfill its purpose.
You will know that pennystock shorties have to come up with a $2.50 collateral for every shorted stock. That's a lot for a stock that trades below $1.50. After the split is effective this will be $12.50 per current stock. Not worth the trouble for most shorters, I believe. Most will cover their positions or are currently doing so. This is one reason the current price holds so well despite low volume. Remember, shorts are those guys buying when everybody else sits at the sidelines.
Will it be a noticeable short squeeze? That's possible. However, the risk for longs is that the price already collapses prior to the split. Once the short covering purchasing volume dries out, things can turn quickly. We'll see.
By the way, the split will be effective the week after next, from November 2nd, NOT next week.
Disclosure: I intend to sit short throughout the split and therefore loaded up my cash account with the necessary collateral. Will sit this out until the next financial reports will prove the weakness of this management team with a very special track record (not exactly in growing shareholder value, I may say).
Good luck to all, long or short!
Stevo -- You are a really smart guy ... appreciate your sharing of the deep understanding of SNWT and its stock price movments with us.
(o;
"have been expecting the slide.and anticipated it"
Why didn't you tell us earlier, Stevo?
(o;
Thank you all! Many nice and helpful people on this board trying to help a pennystock newbie like me making money in the market. Keep up the good work.
Stevo -- Shorties are usually the smarter players. Longs must be very careful when a stock is heavily shorted. Shorties, when appearing in large quantities, are right, most of the time.
That's what it means for SNWT that shorties gobbled up all shares available.
SteveKing -- Like alwyas, just the truth. Call your broker to ask if any shares are available for shorting.
I am checking with Interactive Brokers, one of the largest and powerful market makers. Not a single SNWT share left for shorting here.
No more shares available for shorting ...
Some players grabbed all available shares. Now, what does that mean?
Read this if you want to know what's going on
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=42284493
Reality reminder from your friendly party fright.
Cheers,
Value
Substantial information about SNWT here
This board is tilted toward repetitive cheerful little nothings that sound nice but don't mean much. The obvious intention is to pump up the price.
Are you interested in estimating risk and intrinsic value of SNWT? Than you may like to read the postings below with substantial information referenced to SEC filings instead of PR material.
I am posting this here because SteveKing, the moderator prefers to keep the iBox free of inconvenient facts.
Reduction in sales & weak profit margins
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=42064584
Revenue & profit per share (PE around 300!)
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=42042704
Company needs to sell stock to survive!
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=42064738
Comparison with competitors in the industry
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=42181747
Link to the SEC filings of the unprofitable and badly company that SNWT was (Human Biosystems, HBSY) before it took over SNWT in a reverse merger.
http://www.sec.gov/cgi-bin/browse-edgar?company=human+biosystems&match=&CIK=&filenum=&State=&Country=&SIC=&owner=exclude&Find=Find+Companies&action=getcompany
Finally, note that due to the large number of outstanding shares (20 million), even $1 million revenue is just 5 cents per share. With a assumed optimistic above industry profit margin of 10%, this is just $0.005 profit per share. This is why the total PE ratio is around 300.
Disclosure: I am short 4,000 stocks because I believe that in the end, the price will fall back to intrinsic value (around $0.20 per share). This will happen latest when the next 10-Q is published (likely in November 2009).
Cheers,
Value
Good luck to all!
Stevo -- You're right. I didn't expect that rush in price. My mistake. Underestimated the power of imagination.
You guys don't care about intrinsic value. And hey, why should you. We are in penny stock land.
Furthermore, I might be wrong after all. Nobody is perfect. Let's see. Time will tell. The next 10-Q will tell.
In the meantime, enjoy the ride!
Newbies beware - Pump alert!!
Fundamentals out of sight. Prepare to get out quickly prior to free fall.
Volume up ... I'm impressed (chart here)
This pump is working well guys. Guess I have to wait for the next 10-Q to get some reality on board.
Even if my realistic projections turn out to be "off road", still need to see an operating company that deserves a PE-ratio of 300.
Good luck to you guys. May you dump your shares profitably.
Chapeau,
Value
Current chart with volume ...
Nite guys -- It's been fun. One little guy (me) with rational points to make vs. cheerleading pumpers.
Why do I have the feeling that nobody really cares about what we write here?
Anywho ... take care and good bye for now.
Cheers,
Value (from Asia)
Big money from middle east shuffling ...
... around 300 shares per hour at the moment. Big surprise to come.
(o;
How to recognize pumpers ...
They don't get into discussions about the facts. Repeat fuzzy and mostly irrelevant news.
Such as "this is a great company, margins will explode when the economy recovers".
Mind you, the business segment was never really good, not even in the hey days of credit driven overspending.
After all, don't forget: the price to earnings ratio of SNWT is around 300 (with margins similar to industry peers). This is a bit too much, even for a high-potential growth company. Don't you think. (o;
Hey Stevo -- Competitors unsuccessful, shrinking margins & revenues
Current profit margins:
ABG -8.91%
LAD -0.09%
PII: 5.67%
Do you really believe SNWT is so much more profitable? With a management proven for many years of shareholder value destruction?
Earnings
Margins
Revenues
@SteveKing -- Wouldn't this chart collection a valuable addendum to the iBox?
Dreaming of 20% market growth in recr. vehicles
Ever heard that markets for discretionary consumer goods are shrinking since months on a global level?
Just a little whack on the side of the head. (o;
See chart here : Price starting to fade
Good luck to technical speculators!
All the pumpers on this board know the risks they are taking. May your gamble turn out profitable.
Way too risky for me. I am happy with my smallish short position and will ride it out.
GLTA!!
Volume going down ... longs better get out
See chart here:
http://stockcharts.com/h-sc/ui?s=SNWT&p=D&yr=0&mn=6&dy=0&id=p86626124635
Well guys ... this will fade, either with volume in the next days / weeks or when the ugly facts hit daylight.
Revenue of business segments is declining ... read the 10-Q
HBSY's revenue was declining for years. Buggy World's is currently.
"they have shown a pattern of continued expansion...and growing revenue streams my friend...so we should be golden for a long term hold here... "
Expansion by merging low-margin businesses is a losing strategy, 99% of time.
Let's keep the facts straight.
Boyz -- You wrote "in August 2008 they acquired "Buggy World" for $ 615.000"
Let's assume for a moment that your assumptions are true and Buggy World had a profit margins of 30%. With revenue of $1.7 million that translates into $510,000 profit.
Do you believe anyone can acquire a profitable business with $510,000 net profit for $615,000? Impossible. The minimum multiple would be 12 (low in these markets) = $6,120,000. But SNWT paid just 10% of that.
That is all a big scam! I hope, you are not part of this scheme.
PE of SNWT around 300. Buyers beware!
The 30% are a misunderstanding of a fuzzy press release. The recent SEC filing (10-Q) states that management tries growing the margins between 30 - 40%.
Otherwise, do you think growing margins by 30% to a total of 40% is achievable? In automotive? In these times? Are you serious?
Reality is very likely sobering. I assume profit margins for Buggy World of 3% (SNWT, the "holding", is not profitable at the moment). Assume management can deliver to promise and grow profit margins to 4%.
Then Buggy World contributes $1.6M X 4% / 20,000,000 = $0.003 profit per share (yep, a third of a cent).
Boyz -- Which business model? Do you mean acquisitions?
Which share structure? Granting which advantage?
Stevo -- Why is this a nice share structure? Please explain.
Good luck to all of you funny investors!
- and have a nice weekend.
Cheers,
Value
Promoters and owners (longs) should post more!!
(o;
Price spike kind of correlated with posting frequency. See here:
http://boardreader.com/s/snwt.html