Kermit,the Market Cap is absolutely out of control !
This is another reason why the price is adjusting. Many value & fundamemtal investors place GZFX well below a penny even with future forecasting. Even running the inflated numbers at 100,000 subs. You have seen all the financial formulas. Even Technical Investors see the charts breaking down below a penny from the MA bounce.
Sure, GZFX has a value. But what PE ratio are you giving it, 500, 1000? There comes a point where numbers are tossed out that are not realistic. GZXF is in a correction stage due to investors figuring out that they spend much more than the net business model produces. GZFX will have to prove it all wrong. So all eyes point to the Q's.
Truly break down the spending pattern. Line item it versus the net per sub. Then multiply by a realistic sub number a year out and factor in O/S's. Choose a realistic market PE and you get what many are willing to pay.
And you are also assuming that the outstanding shares do not increase for the rest of 2006. Formulas must adjust as new numbers are released.
I saw 2 posts on the board yesterday about people selling simply because they figured out the market cap. As shares get into the billions, all of a sudden 1 billion versus 4 gets jaded. Hey, what's another billion! Well, it completely takes down the price. The market is always right.
GZFX has always spent millions of dollars. It will be an eye opener to see how much they spent on VOD, e-golf, race car, etc. Anyone ever going to question this? Because business revenue is not even close to catching up with spending. Simple deficit spending.
The reason I believe we head below a penny is simply because the true value is now being realized. Those in for the excitement of CC news are leaving. New money is looking at the filings and balance sheet and passing on GZFX for now.
It will take alot of time for the sub count and revenue to try and play catch up with the outstanding shares.
Look at the actual business revenue and expense ratio.
(**Not revenue generated from the sale of shares for cash-this Dilutes and takes the value lower-so no need to get excited about cash when you realize where it is coming from)
The actual cost per subscriber is astronomical when you run it with the limited revenue from the business.
The money generated from the sale of shares for cash should be well spent. AmeriTrade and some other major trading houses do not even get GZFX news on their wires ! No excuse for this. The word should get out in order to give the price a chance. How are any new investors going to hear the story if it does not come across DJ, Reuters, etc. Many would much rather see them pay an IR firm than advertise on a Race Car sponsorship or e-tour golf.
The money should be tracked for the actual correlation to bringing in subscribers. VOD, same story. Sounds glamorous, but how many subscribers are coming in versus money spent. Who will be watching these satellite broadcasts anyway. And why does that ensure they are the proper target market?
It will be interesting to see how much is being spent on 170 channels that we currently know nothing about? Is any price spent okay with you?
There has to be a price point where a Race Car, E-Golf, and GnF Satellite channel actually hurt the business. Maybe a suggestion is to get into more pots after breakeven. A satellite channel will be around. Expenses have been outrageous with GZFX. Someone needs to reel it in alot at corporate.
Again, cost per subscriber. We need to talk much more about cost per subscriber. After all, the shareholders fund the company and deserve to know more details about each venture.
Open to a discussion about cost per subscriber...
* no reason to bash the poster, let's discuss CPS.
all imo.
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