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Your point seems to be that most groups have some vested interest in a company whether they are shareholders or not. That is o.k. with me because this is enough to justify my view that non-shareholders are welcome to post their views. This may be required to obtain a real exchange of views.
As I have stated in a previous post my experience is that usually those who own equity in a company are the least impartial because they tend to have a vested interest in the pps rising and they tend to frame their posts accordingly. In fact it as happened time and again on various boards that others think I am lying when I post negative implications at the same time as I state that I own stock in the company concerned. The implication is of course is that shareholders never post anything negative about their company.
I think the non-shareholders may be more worth listening to than the shareholders. Shareholders commonly use these boards to convince others that stock price will go up in the hope that they may profit from this. It easier for noen-shareholders to be objective and try to communicate their real views.
Moreover, it is the quality of the reflections in the post that is of interest to shareholders as well. You should never marry a stock. Some of the current non-shareholders may have been shareholders in the past and may have useful experience when it comes to the qualities of Mr Matin. Personally I have from time to time followed the RB board on this company for years. I have found it an intriguing investment opportunity but have so far made no investment because of the low credibility of Mr. Matin. Recently this comes out when he a few weeks ago referred to earnings of $ 3 a share, then was surprised that the pps was falling, then stated that earnings per share would be about $ 1 a share as the sharecount had tripled all of a sudden. This kind of deception ruins his credibility.
My impression is that that order was filled without moving the stock price. One million shares tradet at 1.9 cents.
Why would he be in financial miseries if his company has an extremely high profit margin, making $ 7 million in profits this year? If his company is not that profitable after all he is a liar, is he not?
Happy new year
I as well wish you and others a happy new year. I hope the 2.4 million shares I own in CDED will prove a good investment even if my average purchase price is more than 6 cents. Time will show if there is a substantial short position.
I see your point. In the case you describe it is not really the market-maker on his own behalf that is short but a broker's customer. It is easier to assume that there may be some short-sellers who are not market-makers that are not aware of what may happen to their short positions in a few days. But I would assume that even those people will be monitoring what is going on more or less. Those who have done so and act rationally will have covered their short positions by now. But of course it is not unthinkable that some possible shorters may be caught unawares. But even if that happens and they will have to cover in a couple of days I doubt that the stock price will soar sky high. There are tens of millions of shares owned by traders who will probably be happy to sell their shares below $ 0.03.
ot MSEP
I have checked several charts for the event you refer to. The increase for the end-of-day price seems to have been from about 0.003 to 0.006, whereas a high during the day seems to have been 0.009. About four times the average number seems to have traded. If the volume of CDED trading increases four times the stock price will not move much.
It may well be that the market-makers will not show their weakness if they can choose not to. But that is not the point. The point is that the market-makers have known for a long time what is coming and they have had ample opportunity to cover their possible short position at prices close to the current one. A rational person would do that rather than cover at a much higher price in the course of a few days at a later stage. Don't you think market-makers are rational?
Did the market-makers know what was coming when it comes to the company you refer to?
You should realize one Kelly company is already having revenues in excess of $ 100 million (the wholesale business) before the merger and growing fast. This business alone will probably not take that long to revenues of $ 250 million. But it is the retail business that has most potential - because it probably has margins that are way higher than the wholesale business.
Totally unrealistic?
I think it is so much wishful thinking that the market-makers or other shorters are so exceedingly stupid that they fail to cover any short position well in advance of the change of symbol. After all the things you refer to are well known - porbably by shorters as well if there are shorters in this stoc. So far there is no indication of covering of any short position. This suggests that there is noe sizeable short position in this stock.
As far as the audit is concerned, the crucial question is if the audit will be a real audit of the business in Bangladesh in contradistinction to previous audits. If that is not the case this time around either the audit will probably be pretty worthless.
If the sharecount increases a few percent during the year this gives a fair picture of the situation. The situation is very different if the sharecount increases by several hundred percent during the year.
If the sharecount is tripled at the very end of the year it is of course very misleading to refer to the average number of shares during the year. What is technically correct can be very misleading. In my book it is not acceptable to present very misleading information to shareholders and investors.
You did not note what matters! What matters is earnings per share of $ 3 and profits of $ 7 mllion. That implies about 2.3 million shares outstanding.
As far as earnings per share is concerned it is the O/S and not the float that matters.
Credibility
"CITY OF INDUSTRY, Calif., Dec. 1 /PRNewswire-FirstCall/ -- Veltex Corporation (Pink Sheets: VLXC - News) expects revenues for 2004 to be over $40 million with net profits of over $7 million or $3 a share. The company currently has approximately 1.3 million shares in the float. Veltex plans on becoming fully reporting and moving off the pink sheets to a major exchange upon completion of its audits, which the company is currently undergoing."
On the 9 December the company could see no reason for a decline in the stock price. A few days later the sharecount is 3 times higher than the number implied in the above and earnings per share about one third the number suggested above. Who can trust any information of a company that publishes as grossly misleading information as the reference to earnings per share of $ 3? What will earnings per share a year from now? A fraction of $ 1 if profits are real and the sharecount continues soaring?
Raws information about the sharecount was a lot closer to the truth than that of Mr. Matin. I think this reflects their different credibility.
Was it true? The real number seems to be higher!
______________________________________________________________________
"Company Profile As Of December 21, 2004
______________________________________________________________________
(Pink Sheets: VLXC)
Shares Outstanding: 6,676,035 Veltex Corporation
Active Float: 1.4 Million 1997 Harrison Avenue
Recent Price: $1.90 Cityof Industry CA 91789 USA
52 Week Bid Range: $0.25 - $3.90 Contact: Finn Walstad (253) 564-9254
Capitalization: $12,684,400"
I hardly think it is bad news that this company has a rational and independent assessment of what it is worth spending money on. It is my impression that in the US it is common to spend a lot of money just to impress.
Nothing Mr Matin says kills any theory if he is a liar.
Based on his past history my guess is that Matin is lying.
I believe in Raw's numbers. I think he has much more credibility that Mr Matin who seems to want to hide the sharecount.
Normally the sharecount is very important. But in this case the numbers may be as misleading as the information about the sharecount published by the company. If no information can be counted on the sharecount hardly seems as important as it usually is.
I know from other boards that Rawnoc has a generally negative attitude to BB stocks. In fact such an attitude is very much warranted. These companies will never become truly profitable and are on a descending course to oblivion. Meanwhile dilution by selling shares to investors enable managements to get a good salary while the going is apparently good. Misleading PR's enable smart traders to make short-term profits timing their buys and sells well.
Personally I have little doubt that Rawnoc is right that the OS is rather than 2 million. What surprises me is that fraud in the form of misleading PR's seems to be legal in the US. Those who resort to it are not incarcerated. I would have expected a man like Mr Matin to be behind bars on the basis of his past.
Do you really expect anything better from this company? The reason why projected earnings per share is higher than the stock price reflects of course the fact that Mr Matin has no credibility. Of course this is based on what has happened in the past.
balamidas
Your reasoning makes sense if there is a very big short position in CDED. Nobody has demonstrated that there is such a big short position. My guess is that there is no big short position in this company.
Of course this is no proof. The fact that some shares have been heavily shorted is of course no proof that CDED has been heavily shorted. Neither does the volume of trading suggest such shorting I think. Part of the volume can be explained by all the new shares coming into the float as the company has issued much more than 100 million shares. Another factor is the fact that there has been heavy trading in this stock. When each shareholders owns his shares for a short period of time there will be high volume without any shorting.
That is a cheap one. I have read almost all posts on this board and on the RB board. I have not seen the evidence. The fact that you present no evidence yourself suggests to me that there is no basis for your outlandish claims.
Fanciful speculation?
"They will have to account for three or four or five times or more the number of shares the company has issued."
Where on earth do you get this idea from? I think it is out of this world. I have seen no evidence that there is a substantial short position.
I have the impression that CDED may have issued a lot of shares that came into the market during the period all those PR's were issued. The PR's made it easier to find buyers for all those shares, which was advantageous for those who were then shareholders. Short-term this may have been beneficial for the company.
But those who bought shares based on the impression we got from reading those PR's may feel that our interest has been sacrificed. And the credibility of the company was impaired. That must have been negative for the stock price longer term. There is a saying that honesty is the best policy. I think that is the case long term. Those who mislead will be exposed after while. The way I see it prospects for CDED would have been very dim if it had not been for the merger with the Kelly companies. CDED was in a vicious circle. A low market cap and a substantial loss meant that the sharecount would have to increase at an increasing pace. A case in point is NEXH. Its current market cap is less than $ 1,000. In such a situation it is impossible to raise a signicant amount of money by issuing more shares.
Short position
You wrote among other things:
"This will in turn expose the MM's that have been shorting the stock.
They will have to account for three or four or five times or more the number of shares the company has issued.
and they have only three days after the symbol change to settle their accounts.Now more than ever they need your shares, more than any other time before they are willing to pay high price for them so as not to be exposed or penalized .
so i will ask you to hold on your shares very tight cause we all know that CDED WAS VICTIM of short selling."
It is very common that MM's short a stock to a moderate degree short-term. That is in fact necessary for them to do their job properly. But it is not common that market-makers establish big long-term short positions.
I have seen no evidence that there has been shorting of this stock - legal shorting by MM's or illegal naked shorting from Canada for instance. You seem to suggest that the short-term pisition is several hundred million shares. I think that is totally wrong. If there is a short-position I think it is of a moderate size.
Why has the price movement of this stock been so poor? I think there are two major reasons. One is that more than a hundred million shares have been sold into the market during a limited period of time. This massive offering of new shares has put a strong downward prssure on the stock price.
Secondly, this company issued during the early part of this year a series of PR's that seem to have been poorly founded. It has not been able to follow up on those PR's. What about the great satellite deal that was awaiting regulary approval for instance? There has been no more mention of this deal during the last half year. Because of these PR's management has lost credibility with investors. This has rubbed off on the new situation in which the Kelly companies represent the interesting future I think.
A final point: the company has established hard evidence that most of the shareholders of CDED have been short-term traders. It has compared the list of shareholders at two different points of time and found that most of the shareholders had sold their shares in a short period of time. When more than a hundred million shares are held by traders it is only to be expected that when there is good news some of those traders will see fit to sell their shares into the increased demand for them. A potential rise in the stock price fizzles out very soon.
The Kelly companies are showing revenue - allegedly to the tune of about $ 12 million per month. Since this is wholesale revenue I assume the profit margin is slim.
Luckily you are wrong. You are mixing up restricted shares, which are ordinary shares that cannot be traded right now but may at a later date, and preferred shares, which are an entirely different class of shares. One preferred share may be converted into 18 ordinary shares but since there are only about 200,000 preferred shares the conversion would only mean an increase in the in the number of ordinary shares of less than 2 percent.
I have checked the 10QSB. As far as I can see there are 5 million preferred shares authorised and a little more than 200,000 issued and outstanding. This amounts to a little less than 4 million ordinary shares if converted. I don't understand where the number that was more than 30 times higher comes from.
Thanks for the information! I get the impression that you mix up the wholesale distribution that is now generating about $ 12 million per months in revenues and the future retail sales. I assume that the former has a fairly slim profit margin. My impression is that the credit line of $ 10 million relates to the wholesale business.
It is also my impression that the raising of about $ 2 million relates to the retail business. It seems unclear if this is credit or equity. If it is the latter it could mean that some investors will get a significant part of the retail business, which is the business that may make a lot of money in a best-case scenario, for a limited amount of money. I really hope I have misunderstood on this point.
Where did you find information about the preferred shares and how many ordinary shares they can be converted into?
Who will pay for the drugs?
I have contacted the company and been informed that Medicaid and not the users themselves will pay. Thus there is little risk of the future CDED losing money because the drugs will be paid for. Moreover, margins are good. Thus I envisage good profitability from the retail business once it really gets going.
Who will pay for the drugs?
When reading the transcript from the CC I got the impression that the users of the drugs will have to pay for them. The risk would then be that a significant portion of the drugs would never be paid and Next GENeSYS could lose rather than make money. I e-mailed CDED and received a reply which indicated that Medicaid would pay for the drugs. This sounds reassuring. Moreover, I got the impressions that margins will be nice. Thus there seems to be a good chance tha the future CDED will make a nice profit out of this business.
By the way, I am scepticc on RB.
Today there are apparently millions of shares on offer. The market-makers appear to have been right yesterday that the pps would fall soon.
It has been suggested on the RB board that 90% of the 7.5 million shares traded were buys. If that it so the reason for the high volume must have been the market-makers shorting (legally) to a greater extent than what is common for them to do - probably because they expect the stock price to go down so that they can cover at a profit.