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Hi Gary,
You buring the midnight oil?
Yes, I can give you his name, but I'd prefer to let him know I've posted his comments first. That way he can decide if he wants to remain anonymous.
I'm flying to Jacksonville on Monday, so we could meet in Deerfield Beach any time after Tuesday.
Bix
DISCUSSION -
FROM BIX: Fri Mar 30, 2001 00:11
TO DR. ######,
I have some questions on MVA and EVA.
The text gives an excellent formula for figuring it out
but when I applied it stock I lost more than a few bux
on, I was surprised to see the MVA was positive with
negative stock holder equity.
Would please explain if this a normal trait for the doggish stocks or did I calculate my equation incorrectly? The balance sheet is here:
http://www.siliconinvestor.com/research/financials_bs.gsp?s=CBQI
MY WORK: OTC:CBQI MVA = 11,754,660
Shares Outstanding = 69,946,000 Share Price = .21 Total
Common Equity = 2,934,000
I don't understand how this penny stock has lost so
much money and still has positive MVA! This CEO must be
brilliant! Thanks for any comments
________________
COMMENTS FROM PROFESSOR
Fri Mar 30, 2001 14:51
Hi #####:
The MVA and EVA both measure the managerial
effectiveness of a firm. The key ingredient in the MVA
is the stock price. Of course the stock price depends
on expected future performance as viewed by the investor
market. If the investor market views the future
expectations as promising then the stock may be
overvalued. This may be the case with your CBQI stock
even though the stock in down to $.21. There may be
other factors that are not revealed in the balance sheet
highlights. There may have been other short run factors
that have driven the stock price down.
Dr. ###########
_____________________
RESPONCE FROM FELLOW STUDENT:
Fri Mar 30, 2001 15:40
I don't think its possible to understand this company
just from the provided financials. Too many UFOs.
Some pretty incredible movement in receivables and
current liabilities.
____________________
REPY FROM BIX TO STUDENT:
Fri Mar 30, 2001 16:57
I've been discussing this stock with the Investor
Relations Firm for CBQI. My oppinion is that the stock
was overvalued in the 09/99 to 09/00 run up. I just
cant find any real assets or liquidity that would have
made it run as high as it did...
The market Cap was around 390,000,000 in January of 00.
At that time, common equity was approximately 580K. So
in 9/99 the MVA = $ 389,417,000. I see nothing on the
financials that warrant that kind of value. I think I
got suckered. Plain and simple.
Can someone manipulate the Market Price to these levels?
Or do we blame it on the BULL? How can I verify these
UFOs?
The next 10K should be out before 4-15-00.
___________________________
RESPONSE BY FELLOW STUDENT
Fri Mar 30, 2001 17:28
Hmmmmmmm
CBQI is an E-business infrastructure provider. Didnt
that balloon recently burst?
__________________________
RESPONSE BY PROFESSOR
Sat Mar 31, 2001 06:28
Your evaluations appear to be valid. Apparently there
were many stocks that were overvalued as evidenced by
the recent drop in the market especially the high tech
and e.com stocks. If the investor market views the
stock as having high future expectations, the stock may
stay at a very high price. However, if the expectations
don't show up in expected earnings the price may not
hold. There are many economic factors that are
affecting stocks now as well. Eventually the stocks
that are overpriced will be valued by the investor
market by their fundamentals and the price determined by
the supply and demand for the stock. In the short-run of
course, there will always be exceptions and some stocks
will be over priced. Thank for your comments. They are
very interesting.
____________________________
RESPONCE BY BIX TO DR. #######:
Sat Mar 31, 2001 12:48
What is the best way to determine if a stock is over-valued? Liqidity Ratios?
SITTIN ON MY CAN?
RTW, I am not sittin on my can all day writting email messages and asking questions. I know noone here will ever give me the objectivity I seek. I am currently egaged in discussion with my university professor regarding CBQI's deflated price. ITs becomming an enlighting dissussion. I'll post the highlights next.
Bix
RTW
I'm not trying to scare anyone. If people are scared of my comments its because they have the same concerns as I. I'm not going to say that I have all the answers because I do not. At some point, however, I have to say... "OK, I'v lost 99% of my investment capital. why?"
Sure thats a hell of a rotten thing to force Long Timers with 100,000 share positions to contend with, but its worse to ignore it than it its talk about it. Get it out in the open. Deal with it. The FACTS, that is.
Bix
NO TOM
My initials are not J.F. I'm from Gary's neck of the woods(The Bible Belt).
My critism is not without warrant. It would seem a lot less like critism if certain individuals did not lable my questions as bashing.
If you look at CBQI's financials, you'll see a lot of UFO's. Gary is unaware of them or prefers to keep silent. For example: Some pretty incredible movement in receivables and
current liabilities.
Bix
Shares of CBQI have always done that(and many others)
IT HAPPENS UNDER THE FOLLOWING CIRCUMSTANCES.
a) SHAREHOLDER TRYING TO SELL AT "MARKET PRICE" INSTEAD OF STATING HIS SALE PRICE.
b) SLICK MM REALIZES THE ORDER WAS AT MARKET AND LOWERS THE BID BEFORE FILLING THE ORDER.
This is not unusual. Some Brokers will screw their own clients to make a buck. Particularly if the stock their being asked to take into inventory is new and infrequently traded.
TOMATOE EATER
"They" don't like people who become content with loosing their money.
You have any intelligent explantions for the decline in CBQI's stock?
Bix
ASSUMPTION FACTS?
What exactly is an "Assumption Fact" Gary?
The math was done. Do you wanna talk NPAT? I am using generally accepted accounting principals.
Anyone who says, that CBQI has positive earnings because the "core business earned 4 cents" is side-stepping. I don't know what stock your talking about, but I'm talking about CBQI. Just because one salesman made a sale that exceeded his annual salary does not mean the entire organization had positive earnings. Sure, that was a signicant amount of revenue for that ONE department/devision. But your neglecting the gross liabilities that were commited to just to generate those earnings. Your compartmentalizing earnings for the entire corporation when you do that.
That is verry misleading to investors who don't know their a$$es from their elbows Gary. If Earnings were up (consistantly), this stock would be worth much more than MMs are willing to pay. As the IR, you should stop hypeing falsehoods just to "manage impressions." I look at the situation with my own eys. I am no expert. But it does not take an expert to see through your "fuzzy math".
Respectfully
Bix
The math for the MVA is in my previous post. All Variables filled with numbers on SI's 9/30/00 Balance sheet.
I will asume your answer is yes.
P.S. THe MVA is on my earlier post. No point to EVA since its based on earnings (Which are less than zero).
You change colors like a lizard.
Facetious patronizing really annoys me.
Gary,
Your ego is showing again. I didn't say I was wrong about CBQI. I offered a legitamte and honest solution to any "alleged" manipulation and short positions.
If your as wise as you claim, then you would know that pulling certs is not manipulation. You own the shares, and your entitled to them any time you want.
Pulling certs is done all over the NYSE and NASD to force stock price correction. What possible negative result would cause you to object to it Gary?
Your responce appears to harbor some unknown burdon. Do you think your wrong about the affects of manipulation? Being wrong is only a burdon if you refuse to accept the truth.
Look, I'm not gonna discuss this with you if we can't even agree on our disagreements. IMHO The fall of CBQI's stock deserves a better explanation than the ones you provide. If you dont want to provide it that's one thing. Please continue to presume your authority as IR and CBQI Guru gives you the right to pick apart "legitamate" answers to these questions simply because they are different from your own. I enjoy being were you were in 1997.
Sincerely,
Bix
Unfortuneately (or fortuneately, depending on how you look at it), my position is around a 10th of yours. But I paid "top" dollar for it. :( LOL
I have two positions with two brokers. If we gonna do this, we need to do it as a group. None of us have the positions necessary to make it work alone. The success or failure depends on the percentage of stock we can take from the dealers who hold these alleged short positions. If we can suck up 13-15% of the total outstanding shares, we'll be able to cost at least one dealer his carreer, maybe more.
Talk to your friends and let me know how they feel.
RichD
Gary's address is on his site. It takes little effort to verify property ownership. Thats a wise move for any investor. ITs called, Verifying the facts.
www.bcpa.net
Bix
Good Morning Gary,
When you say "overly simplistic" I assume your talking about the OTC Info and not my response to your earlier message. Is that correct?
If so I think I found some common ground between us: We both agree that we disiagree about the affect of Manipulation and its role on CBQI's stock price.
I honestly think CBQI was "over-valued" in 99/00. Thats not an oppinion unique to CBQI. Greenspan himself gave a speach in 3/00 stating the entire market was overvalued before rising interest rates. If we assume I am correct, then an adjustment of CBQI's stock price was inevitable and manipulation had nothing to do with it. I don't see that as management failure and would never blame Bart for the correction.
Rather than argue that manipulation did not occur, I will spend a bit more time and and validate my oppinion that the stock was overvalued. First I have to research valuations based on more traditional accounting equations (Using,Gross Assets, liabilities ,liquidity and so on). This will take some time.
I realize Manipulation is not an uncommon occurance in OTC markets. I just don't want to fall under the misconstrusion that it is sole cause of the decline in CBQI's stock price. If however, I am wrong, and you are right, then there is trick that can be used to put the squeeze on dealers with a short position. Force them to cover the position. How? The Certs Gary. Certs don't lie.
If all longs who profess to be "Long" intend to stay that way, there is one thing you'll want to do to Squeeze the Manipulators by the throat.
1) Buy up several thousand shares at the ask.
2) Then Call your broker/dealer and request the Certificates on your entire position.
3) Don't Sell
IF you are correct, two things will happen.
1) The manipulatiors will litterally shit their pants as they begin to buy the stock to cover their short position.
2) The Stock price will increase as they find few sellers( DRASTICALLY).
There are two downsides to this move.
1) IF the stock rises real high real quick, the Longs holding their Certs will not be able to sell. At least not quickly. You will have to take them to a broker/dealer to sell for you(not a problem if your a TRUE long).
2) The stock will become less liquid, making it difficult for management to sell additional shares to raise capital, which could possibly force a split(Further Dilute).
If you longs wanna do this, let me know. I'll call in my certs. Always a pleasure discussing this with you.
Bix
Correction
Market Value of stock = Shares outstanding x Stock Price
Bix
OTC - Exchange Info
While the stocks of most large companies trade on the NYSE, a larger number of stocks trade off the exchange in what has traditionally been referred to as the "over-the-counter" market (OTC). An explanation of the term "over-the counter" will help clarify how this term arose. As noted earlier, the exchanges operate as auction markets - buy and sell orders come in more or less simultaneously, and exchange members match these orders. If a stock is traded infrequently(Like CBQI), perhaps because the firm is new or small, few buy and sell orders come in, and matching them within a a reasonable amount of time would be difficult. To avoid this problem, some brokerage firms maintain an inventory of such stocks and stand prepared to make a market for these stocks. These "dealers" buy when individual investors want to sell, and then sell part of their inventory when investors want to buy. At one time, the inventory of securities was kept in a safe, and the stocks, when bought and sold, were literally passed over the counter.
Today these markets are often referred to as dealer markets. A dealer market is defined to include all facilities that are needed to conduct security transactions not made on the organized exchanges. These facilities include (1) the relatively few dealers who hold inventories of these securities and who are said to "make a market" in these securities; (2) the thousands of brokers who act as agents in bringing the dealers together with investors; and (3) the computers, terminals, and electronic networks that provide a communication link between dealers,brokers, and investors. The dealers who make a market in a particular stock quote the price at which they will pay for the stock (the bid price) and the price at wihich they will sell shares (the ask price). Each dealer's prices, which are adjusted as supply and demand conditions change, can be read off computer screens all accross the world. The bid-ask spread, which is the difference between bid and ask prices, represents the dealer's markup, or profit. The dealer's risk increases if the stock is more volatile, OR if the stock trades infrequently. Generally, we would expect volatile, infrequently traded stocks to have wider spreads in order to compensate the dealers for assuming the risk of holding them in inventory.
Let’s put this into context Gary
Talking to you makes me glad to be an American. I don't know any other place where you can express the truth without regret, only to regret it afterwards, and then later be happy you did it. You’re doing a fine job Gary. Just because the job your doing is not hitting the bottom line for me as an investor does not mean I have problem with you. Truth is, I admire you individually and professionally. If fact, I don't know anyone who has worked so hard at something as I see you have done over the past two to three years. Sincerely.
Its understandable that you would be upset with me, or anyone else for that matter, who criticizes something that you have put your own blood, sweat, and tears into. That does not mean the criticism is untruthful. However, to my embarrassment, my calculator says at least some of it was (more later). I have watched this stock drop like a rock. I don't know why any more than you do. I will, however, promise you that I will figure it out.
If you saw this company's original business plan, you would agree, at first Glance, CBQI is a dream. Then, sometime prior to the third quarter of 2000, something strange happened. The Stock Value Dropped while number of Outstanding Shares tripled! I know your opinion is that Market Manipulators are the sole culprits. I don't agree with that any more than you agree that my opinion that earnings are the problem. I am not a broker nor am I associated with one. I don’t know how they operate and I don't care. I will however email you some insightful information about the OTC exchange and how they really operate (Will type up after this post).
Getting back to the bizarre. Reviewing the financial statements, I think I see a dilution in the third quarter of 2000. Dilution (you will see later), has both a positive and a negative affect on the price of the stock and the Market Value Added of the stock. Its negative because flooding the market with additional shares will lower the stock price as sellers convert it to cash. It’s positive because it "increases" MVA.*
Now. What do I mean when I say Dilution? I'm talking about the enormous leap in total outstanding shares from 9/99 to 9/00. CBQI's Financials are really twisting my brain. Did you know stockholders are loaning money to the corporation? Now, I'm no rocket scientist, but I would say that's not a positive sign.
I do agree with the idea of having a "Positive Mental Attitude" but do not think it’s a rational investment strategy. On the other hand, negativity is not my style either. Please understand that no one responds positively to attacks and insults. As a friend of mine suggested, I will try be more balanced with my comments. I'm working on the EVA and MVA calculations now. It would be easier if I understood what the hell "Negative Owners Equity" is. Well, Forget that for now.
First things first: MVA is the degree to which management maximizes stockholder's wealth (since inception). The equation is truly simple but CBQI's balance sheet contains so many peculiar adjustments that I had to study them for a couple of hours. However, after painful deliberation, I had to conclude that the equation made me a liar (assuming the following). MVA = $11,754,660. That is what Bart has earned for CBQI's shareholders in the past two to three years. What is the equation?
MVA = Market Value of Stock - Total Common Equity
Market Value of stock = Shares outstanding-Stock Price (*More shares outstanding = >MVA)
Total Common Equity = Common & Paid In Capital (I think)
EVA is a bit different, as it is a profit-based formula used to measure management's affect during any calendar Year. EVA is negative because the company lost money during the 12 months ended 9/30/00. The fourth quarter of 00 may change that but until the financials are out, we won’t know. I suspect they won't contradict me. But who knows. A simple way to think about EVA is Earnings... If you have positive earnings, you "may" have positive EVA but you will never have a positive EVA with negative income.
While MVA appears to be positive, if we went back to 1999 and calculated MVA each quarter, you will see it has been on the decline. IMHO that is due to the inflated stock price in late 99 and 00 and not necessarily due to management. As the stock price dropped, so too did the MVA.
So, what does this "NEWBIE INVESTER" think about CBQI now? If viewed from the perspective that the stock was over-valued, I think management was wise to take advantage of the inflated stock price by making acquisitions while the stock had more value. The stock was overvalued in 99/00. The transactions prove, to me at least, that management possessed some insight into the challenges of creating "future" value for the corporation (See 1 Below). It successfully converted an over valued stock price into what is now a company that has potential for short term sustainable. In Short, Bart added "market value" by making acquisitions and paying for them with stock rather than cash (See 2 Below).
I'm not crying about the consistent losses Gary but I'm not gonna ignore them either. "GO and GROW" is fine when your stock is over-valued. CBQI better be capable of making money as it sits if it hopes to survive the Chaos this economy may bring. Don't take this critic so personal.
"Our Critics are our friends. They teach us our faults."
-Ben Franklin.
___________
1. Unfortunately for the principal shareholders, they now have to share their ownership in a company that has more owners with and less value than it did in 99/00. IMHO – That’s my explanation for decline in stock price.
2. Its important to note that cash was virtually non-existent. Over two year period, Management has converted approx. 2,900,000 dollars of Cash into 11,546,660 dollars of stock.
Bixmann
Fritz
One More thing: I will get to the bottom of this.
Unlike most investors, I dont mind loosing a few bux if I learn somthing.
Bix
Thank You for your unique Insight.
How can I get the video?
Bix
Attempting to discredit my comments as a bash only makes this organization look foolish Gary. I am a Stockholder in CBQI. IF you don't beleive me, I'll come to your door and show you the most recent statement.
Then you can apoligize to me in person and buy me a bottle of Saphire from that drugstore down the street from your Sable Palm Apartment. All the Cash I've lost on this investment makes me wanna drown my sorrows.
OK TEACH
I'll get them to you tonight. I'll use SI's Financial Statements. They only post Balance Sheets after they've been audited.
Gary,
You have taken fragments of messages which I've posted to others and passed it off as though I'm talking in context to you.
In the process you have neglected to state the one point I've been consistantly reiterating in practically all of the messages above. EARNINGS WHERE is the return on the investment?
I'm not in the mood to play games Gary. Lets talk CBQI's EVA and MVA.
P.S. Your Question: So how much money was given to the company by shareholders.? Answer: Don't hold me to it but I think Common & Paid In Capital represents the amount of money contributed by shareholders.
I read it. It dosen't state the details of the transaction.
Peace
Bix
Gary,
No Games. Just Truth. I can honestly say you don't have the first clue who I am and Vise Versa.
Don't let your ego control you. I am not here for you. I am here for me. CBQI has been draggin its ass for over a year. It's time to stop making excuses and start generating RESULTS.
Peace
Bix
OBI WAN KANOBI fishing for a fight?
Your ridicule of my assessment fails to sustain a valid objection. MVA is "Negative." EVA is "Negative." That is fact. All the hype can't change it. Only your boss can. Tell Bart to Snap to it. MAKE SOME MONEY BART FOR THE BOYZ BART MAN!!
I compliment you my friend. You’re the smartest one in this bunch. From what I can tell, your fans paid cash for their shares. You appear to have received (at Least some of) your shares for peddling PR.
Congrats. My hat's off to you. You get freebies for creating the hype and I get slammed for telling it like it is. I don't need a tutor to know your game. Not that I would expect you to take advise from a newbie, but if you knew what was best for you, you would sell yer CBQI and load up on that other penny yer peddling. Pornography and "Adult Entertainment" is easy money. Hook em up with AT&T. They will yer bill unsuspecting customers on their telephone bills for the membership dues. While yer at it, see if you can convince the girls to run it as an on-line escort service. LOL AT&T will pay for every man is South Beach to get some tail! Great concept Gary!
The Newbie.
Not trying to "wear out my welcome."
Just trying to remind the "OWNERS" that you can "LET" things happen or you can "MAKE" things happen.
Facts are facts. Many of you appear to have averaged yourselves into a whole. Management appears to have lost its leverage by dumping its shares into acquisitions. Lots of you are holding lots of shares. This is your company JB. I'll stop acting like an expert analyst if you start acting like an owner. Or is that self-proclamation a fib?
Luv Ya.
Bix
JB
I Suppose Your 10-K comments and my being a clown are worth a discussion. First and formost,unless there is something you have not told the board in the past, we are not cheerleaders. We are INVESTORS.
Annual and Quarterly SEC reports fail to discuss the most important details investors must know about a company's operations(STOCK PRICE).
Neither traditional accounting data nor the modified data on 10Ks deal with stock prices. This is a serious omission, since the primary goal of management is to maximize CBQI's stock price. Most investors do not analyze a stocks price and compare it to its actual value. Many investors don't even know how to determine the value of a stock. Instead, they rely on analysts to do that. The problem with CBQI is that no analysit would sit down and waist his time trying to expose the pros and cons of this firm. There are too many company's and too few analysts to cover every organization(CBQI Included). Surely you agree, in this instance; that the closest thing that investors who lack analysis skills have to a real life analyst report are the other investors who have been researching and following a stock over time.
This is a problem when none of them understand how to conduct valuations. As indicated earlier, Valuations are calucalted two ways and both related to Shareholder wealth.
Shareholder's wealth is maximized by maximizing the difference between the market value of the firm's stock and the amount of equity capital that was supplied by sharholders. This difference is called the "Market Value Added" (MVA).
MVA = Market value of stock - Equity capital supplied by shareholders = (Shares Outstanding)(Stock Price) - Total common equity. FOR CBQI, THIS IS NEGATIVE.
While MVA measures the effects of managerial actions since the very inception of the company, Econmic Value Added (EVA), focuses on managerial effectiveness in a given year.
EVA=NOPAT (Net Operation Profit After Taxes)-After tax dollar cost of capital used to support operations = EBIT (Earnings before interest and taxes) - (Operating Capital)(After-tax percentage cost of capital)
THE CLOWN CONTINUES FROM RB
RATHER THAN SELL CHEAP CHINESE PROGRAMERS, WHY DOSENT CBQI MARKET THE SHAYET OUT OF CHEAP CHINESE PRODUCTS DIRECTLY TO AMERICAN CONSUMERS OR RETAILERS?
EVERYONE KNOWS THE US HAS THE MOST COMPETENT PROGRAMERS. AND CHINA HAS THE CHEAPEST LABOR FORCE. WHY TRY TO REINVENT THE WHEEL? MARKET PRODUCTS THAT EVERY AMERICAN WILL BUY. TAX ON FREIGHT AND SHIP LOADS OF "CONSUMABLES" THAT PEOPLE ACTUALLY NEED!!! AND USE !!! DUH!!
FORGET THIS "WEB PORTAL DESIGN AND INTERNET HUB HYPE" PRODUCT CRAYP! ITS OLD NEWS. I BUILT A WEBSITE WITH MICROSOFT WORD IN 8 MINS! LOL WHY DO I NEED A CHINA MAN TO DO IT FOR ME?!? TOILET PAPER IS WHAT I NEED! SOFT, MEDICATED, SCENTED, TOILET TISSUE!
GET ME SOME WING DINGS TO PUT ON TOP OF MY TOILET WHILE YER AT IT. SEND ME TOYS. SEND ME BIKES. SEND ME COOL GADGETS LIKE WIRELESS SECURITY CAMERAS THAT LOOK LIKE A BOOK WHICH CAN BE ACCESSED VIA THE INTERNET... SEND ME A CELL PHONE WITH BUILT IN GPS SENSOR. WHILE YER AT IT, MAKE IT A GADGET THAT CAN MAKE PHONE CALLS, DISGUISE MY VOICE, CONFUSE CALLER ID, AND LOCATE THE NEAREST TOILET! SELL THE PRODUCTS OF TOMARROW AND STOP FUSSING WITH PROJECTS OF THE PAST! THEN YOU GOT A PENNY WORT BUYING.
IM INTERESTED IN CBQI BECAUSE OF ITS CHINA AMBITIONS. I JUST WISH CBQI WOULD STOP TRYING BECOME THE NEXT IBM, MICROSOFT, CISCO, OR LUCENT. IT WILL NEVER COMPETE WITH ORGANIZATIONS LIKE THAT. BILL GATES IS LAUNCHING 400 SATALITES OVER THE NEXT 10 YEARS. CBQI CANT COMPETE IN THIS AREA. THE INTERNET OF THE FUTURE IS GOING TO BE SO DIFFERANT THAN THIS LAME THING WE HAVE NOW. USE IT. DONT BUILD IT.
JB
You must be talking about me. So who is the Gary Guy? He the one getting all the shares? Tell him, I wanna work for him if gives some to me.. OK?
Bix...