Hahaha, good one Rckhnd.

Wick, do you think JF has enough cash on hand NOT to dilute?

I agree O/S increase is already factored in. Anyone who gets surprised by it is a fool.

Negative ghost rider, the pattern is full.

itrade4profit2, what do you think the value of GZ is? If you think it is worth at least 10M, then GZ is still under priced right now, even at 10 or 20B shares. If, on the other hand you think it is worth the current market cap or less (3 to 4M), then yes, the price is still too high.

GZFX, Get your 4s if you can. I've got a bid for 5 million at 4. Not having much luck getting that filled. Without GGI dumps, it'll be hard to get those 4s. Good luck.

You obviously don't understand the math. Look at my example again. Yes, they can sell at 0.0004, but they aren't guaranteed 18% return. It's an 18% discount from a WEIGHTED AVERAGE PRICE, not the traded price (go read the SEC Filings). So, again, 100 million at 0.0004 would yield only a $1050 return, not $7200.

Yes, they can sell small amounts at the ask for a profit... but that is my point.. they don't want to DUMP shares at the bid at these levels! And definitely can't drive the price down to 0.0003 because they would do so at a loss.

It sure would be. I've grown tired of 4 decimals.

That's right Brytex. It's a catch 22 for them. With the conversion price at just under 0.0004, they can still make a decent living selling at 0.0005. What I am hoping for is a reversal based on this phenomenon. If people start to understand the situation GGI is in and start noticing the lower selling volume, MM's and investors will start buying at the ask and pushing this thing upward. Any good news thrown our way and we should see a nice short term explosion.

Oh, and I agree the MMs and day traders and avg joe investor is influencing the price. However, the MMs aren't dumb either and they too must realize GGI can't keep dumping at these levels.

Huh? I was speaking of a drop from 4 to 3.. that's a 25% drop. But yes, 5 to 4 is only 20%.. GGI only gets 18% on the conversion, so it's still a hot plate they want to get off of.

Continuing from my previous post.. let me put this into perspective..

The average weighted price GGI must use in the conversion is around 0.000475 right now (maybe a little lower.. I did a quick estimate). This means the conversion price is 0.00039. If GGI sells 100,000,000 shares at 0.0004, GGI only makes $1050 (100M * (0.0004 - 0.000475 * 0.82)). So anyone who thinks GGI is raking in the dough needs to think again. They would make more money in a savings account. If the bid drops to 0.0003 tomorrow, selling those 100M shares would cost them $9000!! Even if we hold at 0.0004 until the average price is 0.0004, the converted price is still only 0.000328, meaning they still lose money at 0.0003!!

I think it is very important for people to realize this. That is why calling this the bottom is very plausible. Dilution HAS stopped momentarily. If we see 0.0003, it won't be GGI selling into it.

Mar-Key, the two are not inversly related nor are they mutually exclusive, so I understand the confusion. However, the pps will go up while OS is increasing given the right catalyst(s).

IMO, GGI is trying to drive the price back up... yes, you heard me, UP! Not by buying, but by not selling. As I've mentioned before, GGI faces a pps dilema that creates a diminishing return AND a diminishing bid price where they can make a profit. We are now in that price range. If the bid dropped to 0.0003 tomorrow, GGI WOULD NOT sell shares. Why? Because they would LOSE money due to the 25% drop in bid price, which would be lower than the converted share price. They wouldn't sell at 0.0003 until the converted share price provides a profit. Therefore, it is in GGI's best interest to push the price back up to a more comfortable trading range. This is why I don't believe we will see any massive GGI dumps this week unless the pps goes up. This is why volume has dried up and we have actually seen the price bounce back up to 0.0006 and NOT BE CONTESTED by big dumps. I believe they are minimizing their sales until the pps gets back into the 0.0008 to 0.001 range. However, one little caveat... I'm not saying we would stay at 0.001... we actually need more than GGI's manipulation to do that. Once we're at that range, GGI will begin dumping again. Of course, this is all my opinion based on my knowledge of the convertible debenture.

Xan, I'd definitely be happier at 9 or 10B. I guess the pps performance over the past several weeks has made me more pessimistic. I didn't think we'd drop below 0.0005 and yet here we are. Chart indicators are failing now, which makes timing even more difficult. I think when we go up/down 20% per tick, the chart no longer paints a clear picture and it can be easily manipulated. I must say, I do like the lower selling volume.. maybe 0.001 really is in our future.

A discussion on GGI and OS:

I've heard a few guesses as far as what the final OS number will be before dilution stops. Wick posted 10B as a max. I think someone else was thinking 8B max. Based on the forward looking statements made by GZ, I'm not sure these estimates are high enough. Assuming the GNF Ent stuff doesn't bring in significant revenue in 2007, GZ will post a loss of around 7MM in 2007. For the sake of argument, let's give GZ the benefit of the doubt and say they do extremely well and gain more subs than expected and make enough from the GNF Ent stuff to drop that loss to 4MM. This means they will need GGI to exercise 4MM in warrants in 2007.

We already know that roughly 800 million shares were added up till February 28. Assuming an average price of 0.0015 during that time frame, this would equate to roughly $1MM in warrants. This means $3MM is still needed. Assuming we average a pps of 0.0005 between March and December. GGI will have to convert about $30,000, resulting in 8B shares added to the OS for a grand total of 14B shares. This averages to about 40 million shares per day sold by GGI. So as far as guestimates go.. 14B is mine... and that's being generous.

Does anyone else have any revenue/sub/OS estimates backed by some calculations? Wick, I'd love to hear your rationale for 10B max OS.

Unfortunately, the difference between a pencil and a pen is a bit more complicated than that. The Netflixians learned this the hard way as the microscopic pieces of graphite became FOD (Foreign Object Debris) and contaminated their space vehicle's scrubbers, electronics, and other equipment. Larger pieces of broken pencil became hazardous to the crew as they floated around the space craft. Eventually, the space craft stopped working correctly due to the FOD and the Netflixians died. NASA spends money for a reason. Perhaps the Gameznflixers do, too.

Agent, you make me laugh :)

"Holding shares usually means "investing", and trading shares is "trading"... so which is it, Agent?"

Z, can't a person do both? I do. I have roughly 2.5M shares in a mad money IRA account dedicated for a long position in this here POS. On the off chance that GZ actually succeeds at some point, those 2.5M shares will do well. If not, then so be it... it's mad money. However, I also trade as I see fit.

Why would you load up for an R/S?

Anything is possible. I hope that doesn't happen, but we'll see.

Magui, He's there.. always lurking.. waiting to pounce. Wick get's quiet just before the strike, lol.

What happens when you can't buy at the bid b/c the only people selling already bought at the bid? What happens when the GGI well dries up? What happens when those selling at the ask stop selling? Where will you get your shares? If only a catalyst would show up. Then Wick's rocket might soar.

GZFXER,

Because we are way over sold and the downward pressure is lifting. I've never seen a stock go down without having a short term reversal every now and then. We've seen several of these in the past 18 months. I'm not saying the general trend will reverse just yet, but we are way overdue for a "good week". With the light selling volume, it seems reasonable to think the rate of dilution has slowed down quite a bit. So, with any luck, upward movement won't be significantly challenged by GGI. The only reason I am still here is b/c I believe there will be an opportunity for a significant short term gain in the near future. With any luck, we'll get back into the 1000th's of a penny range, lol.

good luck

Anyone else as bored of this stock as I am? I sense a few good days are coming, but waiting for it is really putting me to sleep.

Based on the 10K estimate of 50K subs by eoy, I'd say between 28K and 31K subs (avg. +3K subs/mo).

Question mergerman,

How will share count be out of this world when (1) we already know GGI is banging against the 9.9% ownership and therefore, can't hold onto converted shares and (2) volume has been so light that GGI couldn't possibly be selling more than they have in the past. My guesstimate is OS is around 7B right now.

Hey wick, how will we know if he has stopped the dilution.. are you looking for a PR or something?

I see only two ways this co. could be making enough money to stop dilution: (1) have >80K subs or (2) make a ton of money from the GNF stuff. Neither is likely to have occurred within the past 4 months.

I feel your frustration.

Coolbreeze.. a rebuttal.

-PPS down 95%
* not really DD. You just looked at a chart.

-no current disclosure of rental subscriptions
* when have they ever, except in the SEC filings. This is
not unusual for a company. Oh, and that ain't DD
either.

-deceptive implementation of web advertising
* huh? prove it. still no DD.

-CEO evasive and/or defensive during the one and only investor conference call.
* okay, I'll give you that... but still no DD.

-no investor conference calls with CEO since failed Circuit City rollout
* that's b/c he's sick of talking to all the bashers.
however, I agree this is not a good thing.

-OS increased by millions and millions and millions
* stating more obvious. Is there any DD to go with that?

-CEO diversifies into vague ventures that create zero income
* where's your proof that revenue will not be made
by these ventures? Oh wait, that's right, you think
a business makes money instantaniously. My bad.

-CEO has a history in other penny stock ventures
* True. No rebuttal on this one.

-PPS continues to spiral down-down-down, while you keep treading a false sense of hope.
* Stating the obvious again, but not DD.

Did you actually do any real DD, or do you just read a few things, look at a few numbers, and then speculate on the rest?

translatr,

And how much ad revenue do you possibly think they got in 2006 from GNF TV? Millions? Doubtfull. Who is going to pay them anything more than peanuts to advertise on GNF TV when hardly anybody watches it. Much like the costs were immaterial, so were the revenues. Just b/c the company didn't break down the revenue doesn't mean it doesn't include the VOD and GNF TV revenue. They only mention the revenue is from subs and online sales b/c that's where the majority of revenue was coming from in 2006.

2006 was a foundation building year for VOD and GNF TV. It wasn't until recently that these sites became fully developed and we saw a lot of PR about them. We should see increased revenue from them in 2007, but why would you expect anything more than peanuts in 2006?

On another note, they do show over 1MM was "invested" on the film library (must have been during Q4). This film library is for the GNF business, IMO. So the accounting is there in the 10KSB, they simply didn't have anything significant to report for 2006 in terms of rev and costs.

It does look that way in the 10K, but I don't see how they could go this long (6 months) w/o filing an amendment with the SEC.

Agreed, any other sources of revenue will make things better. And with rental subs alone plus the 42% sales, we can break even on the rental biz alone, but not at 50K subs. I've calculated the breakeven to be more like 75K. We'll be about 1.5MM in the hole at 50K. It will be interesting to see if the other ventures will make any rev this year.

The 10K was a mess, but not entirely bad. I did see some light at the end of the tunnel... it's just a very long tunnel, lol.

More analysis to share...

Based on the O/S increases due to the convertible debenture and the current downward trend in price, we could easily see all A/S become O/S by year end. We really gotta get the pps to reverse course for awhile if there is any hope for survival.

On another note, there is a diminishing return for GGI. It is in there best interest to keep the price up in order to maximize profit. However, it is a wicked game they must play. As the average price continues to decline, GGI's ability to sell at the bid and continue to make a profit diminishes. They only have an 18% margin to work with. When a tick counts for 12%, that margin is quickly disolved. So, for example, if the average pps is 0.0008 and the bid drops to 0.0006, GGI will actually loose money on the conversion. Therefore, they must keep the price at 0.0007 or more to stay profitable.. that is, until the average price drops. It's a catch 22 for them, which both hurts us and helps us.

Oh, and btw, the 5's will be possible this week based on the trend. Hope we don't see them, but you never know. CMF and accum/dist still looks good, but I'm disappointed we haven't seen a pop yet (yet is keyword there).

A few days ago someone was talking about the rev/sub as being something like 5.40 based on 19000 subs, the rev in the 10KSB, and the 42% that is from DVD/game sales.

Just wanted to make sure everyone knows what the real number is. Remember, the average sub count was 9200 subs for the year. This is where the flaw in the above analysis lies. If you use 9200 subs, you get an average rev/sub/mo of $9.90. Hope that clears things up a bit.

The frightning thing is that we are dependent on the 42% of DVD/games sales. Without this, our gross profit would be awful. The average cost per sub ends up being around $7.04 per sub. So we're only getting about $3/sub/mo in gross profit. At that rate, it would take forever to break even and a lot more than 50K subs.

Another puzzle.

Again, forgive me if this topic has already been discussed (been away from the board for a few days). There was another line item that I found puzzling in the balance sheet and cash flow statement. In addition, a paragraph towards the rear of the 10KSB was confusing as well.

On the balance sheet, there is an advance from GGI in the amount of 466,515. Advances are not shown on Q1-Q3, so this is a Q4 advance. Interstingly, the cash flow only shows 166,515 as an advance from GGI. Again, a Q4 advance only. Is there a typo in one of these. Plus, what was this advance for? Does anyone know what's going on here. More accounting magic?

Along the topic of GGI.. there are several sections that talk about the convertible debenture. Up until note 7 following the operating statements, they talk about the two well known events... the first 150K conv. debt. and the amendment increasing it to 300K. However, in note 7, it states:

"On November 1, 2006, the Company entered into a convertible debenture totalling $100,000 that matures November 2011..."

It then talks about the original 150K conv. debt, but never mentions the amendment at the beginning of 2006. What the heck is going on here? Did someone not proof read this thing? This must be a typo, right? They surely didn't add another $100,000 to the conv. debt. and not file a SEC filing or PR about it.. right? And if they did add another 100K, why doesn't it show up anywhere else in the 10KSB except for this note?

Thoughts? (I'm really not trying to scare anyone.. just wondering if anyone else noticed this)

Regarding the "Black Swan"

I've been puzzled by the whole magic trick going on in the 10KSB with respect to CDs and stock subscriptions. Forgive me if someone has already solved this puzzle. I've been going over some of the past reports and it appears 3,000,000 stock subscriptions were added at the end of '05. At the same time, 3,000,000 in CDs were added. These 3,000,000 in stock subscriptions and CDs have now disappeared. Looking at the change in stockholder equity statement, it appears the 3,000,000 subscriptions were cancelled. If that is the case, the most likely explanation is that the CDs were used to offset the subscriptions. Once the subscriptions were cancelled, the CDs were converted back into cash resulting in a net zero effect. It doesn't look like we suddenly lost money (i.e. I don't think any of this 3,000,000 went to LITV). However, I don't like the way they are reporting this stuff.. comes across as fishy. They really should have explained this in the 10KSB.

Wick, gotcha. Agreed, nothing to worry about. Like I said earlier today, lots of posts concerning non-issues.

I guess I need to slow down when I'm skimming through these posts. I understand now. I suppose it depends on where you are renting the commercial space. I would expect California and Washington to be expensive. I don't know about Texas. I guess 1.67 per sf might be high for Dallas, but I don't have any insight on costs there. Same with the Kentucky price. I guess I don't see a whole lot of reason to squable over rental/office space costs... they come with the territory. Let me ask this.. if they had 100K subs and revenue was close to 1MM/mo, would you care so much? They claim their current infrastructure is to support 150K subs, so they shouldn't need to spend much more on facilities. This cost will be considered peanuts once the sub count gets up there. As an invester, I'm forward looking on these types of things.

..back to crunching numbers.. take care.

I noticed this as well. I've been getting faster turnaround times (put it in the mail on Mon, get a new one by Wed), newer releases seem more available, and the DVDs aren't all scratched up. I see this as a positive sign (better service = lower churn = more subs).

samohttac, yep, that is a concern, but to be expected considering their spending spree on VOD and GNF development and their so called advertising campaign. So now they will have to dilute dilute dilute to keep afloat float float until the revenue is high enough to support positive cash flow. I haven't crunched the numbers yet, but I don't think it's as bad as it sounds. That is, as long as sub growth continues. The dilution factor has been no secret for a long time.

Well, in their defense, I've seen many nasdaq companies spend more than that for years, continue to be in the hole, have tons of debt, and still doing a heck of a lot better than this stock. Show of hands.. how many people have a Tivo brand DVR? And how many times has Tivo made a profit since going public... umm, I'm gonna have to go with 0, Bob <insert gameshow music here>.

Xan,
You know what's sad? GZ would have to sell over 200 shares to pay for a 17.3c postage.. doh!

Texas, it isn't that I don't care where my investment is spent, but come on, you guys are questioning the existance of DCs.. that's rediculous, of course they exist. And that is more the point I was making. The focus is on the wrong topics. And this is a small company. Any company making 1.8 mil in revenue and a hand full of employees is, in my book, a small company. Granted, it isn't the smallest company out there, but it is still small. Even when they hit 150K subs, they will still be small.

I agree with the rest of your comment. I've complained about advertising and marketing as well. Yes, fewer than 400 investers.. but I doubt that makes up 19K subs.. probably more like 2K (IMO). The pop ups and banners do provide sub growth, but it is a slow growth. So I do agree print and TV ads would be benificial. I'd be happy just to see a junk mail flyer in my mailbox.. I get a netflix one damn near every other day.