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Itrade, I NEVER said GGI wasn't still diluting nor did I say they could not receive shares at these prices. What I SAID was they do not want to sell them at 0.0004 when the conversion price is GREATER than 0.0004. In your example.. tell me.. what is 18% off of 0.0005... not less than 0.0004. You want people to believe that they will push the price down to 0.0001, but why would they do that if the volume weighted average price is hovering around 0.0005.. AS YOU STATED!! The ONLY way they can make a profit selling down to 0.0004 is IF there is enough volume at 0.0004 to lower the conversion price such that it is below 0.0004. Who is going to provide this volume???? Not GGI since currently they would lose money. YOU STILL HAVEN'T ADDRESSED THIS MATHEMATICALLY!!
Yes, GGI is still selling shares and diluting the heck out of this thing, but they are doing so at the 0.0005 and above range b/c, as of right now, they would lose money selling below 0.0005 UNTIL the weighted average price drops low enough to make a profit at the 0.0004, which can not be sooner than the next trading day. So unless someone is going to give GGI a hand and dump a ton of shares at 0.0004, this thing ain't going down any further with any substantial volume. (BTW, I have posted SEVERAL times estimates on what I think the latest OS is, so obviously I think they are still diluting)
So PLEASE, explain to the board MATHEMATICALLY how GGI will bring the price down to 0.0001, as you want everyone to believe. I will be happy to provide example after example to back up my argument.
As for asking others on the board.. don't need to, many have agreed with me, others simply don't understand the GGI agreement at all, and others have never provided any substantial argument against it.. including yourself.
Hey Mar-Key. That's a good question. Right now, they are still profiting at 0.0005 b/c the average price is somewhere between 0.0005 and 0.0006. But GGI won't push the price down to 0.0004 b/c even at an average price of 0.0005, the 20 percentage points is greater than the 18% discount, meaning their cost per share is more than what they would sell the shares for. Do you enjoy selling shares at a loss? Neither does GGI. It is my belief that this phenomenon is what has provided support at 0.0005.
Is it fair to say most of the downward pressure is from GGI? If you agree with that and agree that GGI would lose money selling at 0.0004, then what would be the driving force for a lower pps?
The one thing I could see happen is for complete manipulation by GGI. They would have to sell shares for a loss to get the average price down and try to make up the loss the next day.. seems risky. And it just gets more and more difficult to do this as the price declines below 0.0005. It is in their best interest to keep the price up.
But going back to your question.. what would happen if GGI stopped profitting? GGI would stop converting and GZ runs out of cashflow and has to figure out some other means of financing. But I think there is enough volume and accumulation in the 0.0005 to 0.0006 range to get through the next few months without problems. I don't know that GZ can force a conversion. If push came to shove, they may have to lift the 9.9% limit on GGI to keep the cashflow going. Who knows, they may even get desparate and create a new debenture with a bigger discount.. say 30% or 40%. But to date, that hasn't happened so my arguments are based on the current agreement.
I'm guessing you also need to learn more about hedge funding and toxic funding as your math does not add up. The terms of the agreement do not guarantee anything at this price range. I have explained this before, but I'll let you figure it out. Read the 10K. The terms of the convertible debenture are spelled out quite well. The converted share price 82% of (a)the volume weighted average price on the day prior to the conversion or (b) the volume weighted average price of the lowest 3 trading days in a 20 day period prior to conversion. So, explain to the board how GGI will make a profit selling at 0.0004 when today's volume weighted average price is closer to 0.0006 and the lowest 3 trading days had low volume at 0.0004, which means the average price is closer to 0.0005. And lets say the average price is low enough so they can make a little money at 0.0004, how will they make money at 0.0003 or 0.0002 when the spread keeps getting larger and larger? Please enlighten us. Please explain to us why GGI would be happy selling shares down to 0.0001 when the average price is more than 18% above the bid.
If you are going to make such bold statements, it would be wise of you to provide the numbers to go with it. Otherwise you are simply bashing and spreading lies.
Xan,
Sorry I didn't reply sooner.. been MIA the last few days. I think we're really saying the same thing, just in different ways. I agree JF asks for money, but the actual transaction isn't quite the way you interpret it. The sec filings clearly state how the convertible debenture works.
For starters, "we" (GZ) have already received the debenture ($300K) from GGI. We do not continue to receive debentures. We "repay" this debenture by converting shares and "giving" them to GGI.
"The debenture bears interest at 4 3/4%, matures three years from the date of issuance, and is convertible into commmon stock, at Golden Gate's option."
When JF needs money, a portion of the debenture is converted and GGI receives these converted shares . At the same time, GGI must exercise warrants at a purchase price of $1.09 per share. This is the money that goes to GZ, not the money from the sale of the converted shares. The converted price of the shares provides an 18% discount, which is where GGI makes it's money once the shares are sold. GGI DOES NOT have to sell the converted shares nor the shares from the exercised
warrants unless holding them would increase their ownership to more than 9.9% of the OS.
Now, I do understand where you are coming from, and in simple terms, we are basically getting our own money minus GGI's profits. Yes, it is a great deal for GGI as long as the converted price is below the bid. However, JF has already received money in the bank before GGI ever starts dumping the converted shares.
Xan, GGI doesn't hold, they convert. More importantly, they must convert and "dump" enough shares to keep GZ running. The 1Q report shows GZ is still losing money at a tremendous rate and they don't have the cash to support the loss. This is where GGI comes in and the shareholder says, "thank you, may I please have another." So yes, they shed them as fast as they get them. That is why I say I would just sit on the bid and let them dump into it. I do think they hold around 9.9% though. I'm confused why you would say they would give us the money back.. doubtful IMO.
friniteshopper, If I were to accumulate shares to take over this company, I think I'd just place a bid in the .0005 to .0006 area and let GGI dump their shares, lol. Why pay more :)
OT: VP, what technology are you in?
Wow, an actual scholar on the board.. I think you are the first to ever comment on my handle. :)
I understand where you're coming from. Time is a luxury I have little of these days.. in fact.. this will be the last post of the night for me.. my time is up :). As someone with a mathematical/scientific background, I focus more on the numbers and SEC filings than I do on these sorts of things.
Just out of curiosity, where do you see this going? Do you think there is truth to the PR or are you just interested in the people behind it?
Best of luck to you as well!
What? SVET is buying GNF Ent at $7 per share.
Sorry.. just wanted to get more crazy rumors on the board. :)
wick, what's the 7B shares estimate based on? Oh.. and what is "where most people want it"? Honestly, right now, I just want to get back into the 0.002 to 0.003 range and then start gradually moving up from there. I actually think we could get over the GGI hump with a 1.5 to 2B shares traded in a single day. Although GGI could convert as many shares as it wants, in reality it only converts enough to keep GZ running. I would guess they would offload 500M shares for GZ and maybe another 100M from their 9.9% ownership just for profit taking reasons. Once past the GGI factor, we just have to deal with profit takers/day traders. As we've seen in the past, this thing can climb in a hurry. A 1000% single day gain is very possible if we actually had a buying frenzy. Then the next day it'd drop 62% :)
Agent, lol, you're probably right.. I'm speaking in simple terms :)
"i don't waste my time thinking about the super.."what ever"..lol...that's not important"
But it is important and is precisely why I call this company a scam and see no reason to waste any more time researching/discussing them.
Nice picture.. that girl is smokin'.. wait, that's not what we were talking about.. :)
Pump and dump term was around before the enron scandal. Whatever the term may have meant before, nowadays (IMO) it simply refers to any manipulation (typically in the form of BS PRs) that causes a sharp spike followed by an immediate sell off.
So do you believe the supermag exists?
Why do you say inventory dollars need to show an increase? I've projected 1.3M to be spent on DVDs/Games for 2007 and yet only 2M being shown on the balance sheet at the end of 2007 due to amortization. These things are only given a 1 year life so the value given in the balance sheet drops off quickly. I don't expect inventory value to increase in 2007.
Have a good night everyone.. gotta catch the end of the Spurs/Suns game.
Really.. so you don't think they just pumped and dumped the hell out of this stock? Any co. that posts a BS PR like that is a scam.
I've downgraded to neutral due to the lackluster Q. But there is still hope. The ride isn't over for another 6 months. I did see some signs that JF and co are sticking to "the plan".
Did you factor in amortization and depreciation? Even if they are buying inventory, these numbers can still go down. They shouldn't be buying as much as they have in the past simply b/c (a) they only have 23K subs and (b) they've already built their "old game/movie" inventory so they only need to replace broken ones and buy new releases.
Could be the case. Money is definitely tight. I'm sure after the GGI dump this week they'll have some cash to buy inventory with. I doubt they completely stopped buying inventory.
They say lots of things. Only time will tell. All I know is that if Moroch's recommendations don't include "real" advertising, then what is the point.
Yeah, I know wick don't run the co... I just happen to agree with him on this one. I've given him plenty of chit in the past about some of his statements.. but I have to admit that I respect the guy cause he does his DD and brings some intelligence to the board.
I guess I'd just rather read comments about the Q rather than a boiler room operation. They came, they went, they manipulated our stock.. oh well, I'm ready to move on. I get emails and flyers all the time from these types of scams.. "such and such co. has this product that will make billions. Buy now before it goes through the roof. 500% pps growth expected this month". Lots of bogus PRs come out for the BB stock and away it goes up and up and up and then straight down to the ground when everyone realizes the co. doesn't exist except in the form of PRs and an office in some run down building with no activity in it. Granted, this isn't quite the same type of scam, but SVET is a scam nonetheless.
Siriusly? ..sorry, couldn't help myself. Sorry to hear your service is so terrible. I just mailed back Borat yesterday and I just checked my Queue and Pursuit of Happiness is on it's way.. I have no problem getting new releases. Otherwise, I would have dropped the service a long time ago cause I don't play games. We were going to get netflix.. then I became a GZ bagholder :). The service is the only thing this co. has going for it.. it ain't A++, but it's certainly good enough to make this co. profitable.. if only they knew how to advertise.
Q, I'm pretty sure that letter is at the same place their SuperMag is, lol
Are we still talking about the so called buyout? Listen to wick.. it ain't happenin'.
itrade,
Just a slight correction.. The 10K stated the 6.058B O/S was on 2/28/07.. so more like a month to gain the extra 430M shares. Believe it or not, this is better than I expected. I estimated 6.7B shares end of 1Q. It's all about costs. They have no cash, so this means they must rely on GGI conversions to keep them afloat. If you estimate their quarterly cost and estimate the average conversion price for GGI, you can project the O/S. I'm not surprised at all by the O/S number and, IMO, it's already factored into the pps. But.. be warned.. projecting out more than 6 months will give you nightmares, lol.
I could care less about O/S right now.. my real problem with the 1Q is the sub count. It's been 3 months since they projected 50K subs and breakeven by eoy. This rate of sub growth does not support that projection. We need to be adding 3K per month, not 4K in 3 months. Even for 1Q, this seems really low. Not to mention they really need about 85K subs to break even.
Wick, Mar-Key, maybe we should become consultants for GZ.. I hear they make good money :)
Hey, if newbies keep us afloat.. then bring 'em on :) I've got some shares at 0.01 to sell them along with my cold fusion machine, lol.
nettgain,
I was not thrilled with the Q. There were a couple of pleasing results, but overall, they couldn't even meet my conservative estimates. I, too, was looking for AT LEAST 25K subs. They are spending way too much money to only be gaining 5K subs per Q at this point. I don't care if it was a 1Q with a "cyclical" excuse. The infrastructure is built and the service is pretty good.. now is the time to buckle down and accelerate growth to improve the bottom line. It seems all they are doing now is trying to control costs while sitting with their thumb up their a$$es hoping the subs will start growing on trees.
With that said, I really wasn't expecting much this quarter, but it still frustrates me and the Q was worse than I expected. I was even hoping for some sort of positive surprise, but nope.. nothin.. just the same old same old. GZ management is a fricken joke. Heck, pay me 500K and I'll sign up 5K subs per Q. I seriously wonder how they expect to reach 50K subs this year. Time is running out for GZ. They have less than six months to sink or swim. As much as I see the potential with this co., I'm beginning to seriously doubt JF and crew can ever steer the ship in the right direction.
Okay, I'm done venting.
Xan, I have a cold fusion device to sell, lol. I just don't buy the whole SuperMag device exists except in someone's imagination.
Nice. I figured you did. Good luck and good night.
Did you make money today?
Wait.. that's just a blank form.. I thought you meant GZ had filed one. Later.
Thanks Wick. I was just there and didn't see it.. strange.
How come nobody wants to come out and play at 2:30AM hahahahaha.
Good night y'all. Have a great weekend!
Wick, did they post a form 4? I haven't seen it. You got a link?
Interesting day today, but not unexpected. Although I am disappointed I never got my 5 million shares at 0.0004.
I agree with those who think there was dilution today. There's no doubt GGI was very relieved to finally be able to sell some shares. But dilution was not the cause of today's price increase (that wouldn't make much sense). IMO, someone either got a whiff of some good news or a big buyer was tired of waiting for lower prices or a short decided it was time to cover.
itrade, read #245065. Yes, they don't own warehouses full of products or have patent rights or anything like that. But such things are not the only value a company has. Oh, and the current pps price is pretty much the value of the DVDs, Games, and other fixed assets they do own. So why should the value be less than that?
You did nail the biggest problem GZ has.. slow sub growth and little to no brand recognition. But this won't prevent them from doing well in the next 12 to 18 months AS LONG AS they stick to the plan. It is unfortunate JF and crew have completely failed to properly market GZ. We shouldn't even be having these conversations by now.
It isn't the best company. It's performance has been lack luster. Yes, we all want to push JF in front of a bus. BUT, it is worth more than 0.0004.
Mar-key, first off, need to defend myself here, I didn't say I thought it was worth 10 million. I was asking itrade4profit what he thought it was worth since he seems to think we're still way over priced (#245000). This all started out when Xan made a statement saying it was 20-25mm undervalued (#244997). I was making a point that it depends on what value you believe the co. has.
So what do I think the co. is worth? Well, I see the potential for great revenue growth in the next 12 to 18 months. With that said, I am projecting 7.8mm in revenues for 2007 and over 15mm in 2008. If costs are controlled as stated in the 10K, then they will make a profit next year. When placing a value on a company like this, you must be forward looking. Yes, as of today, they lose money qtr after qtr so the present value is not all that great. But an investor doesn't buy or sell soley based on today's value. Given the fact that the infrastructure is already in place, I'd definitely pay more than $500K for GZ (the DVDs, Games, and other fixed assets alone are worth much more than that). 10mm might be a bit much, but I think several million is not out of the question.
Buying property won't give you the exponential growth possible in a co. like GZ. If that were the case, nobody would buy stocks. You're here, aren't you? Must be a reason you're not out buying property.
BTW, GZ is not the first co. to lose money day after day. On top of that, other co's are riddled with debt. And yet GZ gets hammered for it while the others' pps takes off.
Translatr, here is my guesstimate for 1Q:
Avg. Subs: 25000
Revenue: $1,277,279
Cost of Rev: 528,835
Gross Profit: 748,444
Advertising: 692,158
Consulting and professional fees: 684,522
Depreciation and Amortization: 514,675
SG&A: 1,061,351
Net: (2,204,262)
O/S: 6.7B as of 4/1/07
"Insignificant" revenue from GNF Ent and VOD in 1Q.
Brief regurgitation of previous PRs to show everything that happened in 1Q in regards to GNF Ent and VOD.
350,000 spent on DVDs/Games and fixed assets.
770K note has been paid, limiting cash from warrants to 1.8M ($17,000 converted).
Same BS story, different day, but all according to plan.
I don't expect any miracles in 1Q. Things won't look good until 2Q or 3Q when sub growth approaches 40K, we see revenue from GNF Ent, and the loss/qtr is significantly reduced.
I believe we are at a turning point. The company's performance will begin reversing towards break even. As long as JF doesn't decide to add more business units and doesn't do anything stupid to increase costs, we should be okay from here on out. A year from now when subs have reached 85K, revenue is coming in through GNF Ent/VOD, we have $0 in debt, and JF no longer requires warrant exercises to keep the business floating, we'll all be laughing about how worried we were about the O/S and we'll reminisce about the days when you could buy millions of shares at 0.0005. Okay, somebody slap me now.