Saturday, May 13, 2023 9:24:18 PM
SURG - Concerns. The "business" is basically being a sales agent for socialism. All profits are coming from signing up people for a govt giveaway (Affordable Connectivity Program - ACP), then the company gets reimbursed directly from the govt for giving it away.
Revenue and Profit breakdown by business segment:
My belief in business is the customer is the person who pays you. Therefore, the company may have lots of users, but the company's sole profitable customer is the govt, thus it's us taxpayers who are paying for this. If you put the morality aside, some other concerns:
1) Agree that CEO doesn't really sound like a CEO. Can't pinpoint exactly, but just seems off.
2) Locations seem like they'd be hard to verify -- were previously using pop-up tents (mentioned on conf call) to sign up non-banked people to all these govt programs, now trying to move into convenience stores, yet website has no "Locations" link for where new potential customers might go if they were using free internet at the library, for example, and wanted to find a place to signup. Sort of feels like website is built for investors, not customers.
3) "Blockchain Technology Platform Hybrid Cloud" is touted on their website, but this appears to be buzzword stuff that is total nonsense. 10-Q says, "Surge Blockchain: Revenues are generated through the sale of various products such as energy drinks, CBD products, and other top selling products in convenience store and bodega nationwide. At the time in which our products are sold at the store our performance obligation is considered complete. At point of sale, our web portal platform initiates an automated clearing house transaction (ACH) resulting in the recording revenue."
4) Company seems to have jumped around from product to product over the years. Never successful at any of them.
5) November 2021 company did a 50-for-1 reverse split
6) Company is dual-listed on something called the Upstream exchange, which is some supposed exchange in the Seychelles that also does crypto, NFT's, etc. This reminds me an awful lot of a few years ago when every stinky pinky was getting listed on the Frankfurt Exchange in Germany. Why? That costs a lot of money. Is their really some massive demand for your crappy pinksheet stock in other countries? Really, seriously? Yet that was always their claim. I always thought one of the more likely reasons was so insiders could do wash trading (to run up the price) in their own stock that was tougher for regulators to track down. Seriously, how many people are going to sign up for some crypto exchange in the Seychelles? And of that small number, how many are ever even going to know about your little company? Seems absurd to be wasting time on this. Can't think of any good reasons, but can think of lots of bad ones.
Finally, can also think of many ways to buy a list of people and sign them up for this ACP program without their knowledge. If a free tablet arrives at your home, with some free internet each month, who's going to complain? Or if all the user info matches up with the info in the food stamp database, does the govt even ask for verification that you sent them a tablet, or do they just start reimbursing you? (There was huge fraud in the govt PPP loans and all that. Criminals in jail were getting big money sent to them. How close is the govt checking this stuff?)
Forget the exact date, but company only started on this ACP govt program about 1.5 years ago. It could all be true, but has a scammy feel. Could go along great for a year or two and then end up a zero overnight if there's some govt fraud discovered, or even if the govt just discontinues the program (though that seems unlikely as we trudge unrelentingly toward socialism). Even if it is all true, it's a very distasteful business that only encourages people to become further dependent on the govt. Ugh.
Revenue and Profit breakdown by business segment:
My belief in business is the customer is the person who pays you. Therefore, the company may have lots of users, but the company's sole profitable customer is the govt, thus it's us taxpayers who are paying for this. If you put the morality aside, some other concerns:
1) Agree that CEO doesn't really sound like a CEO. Can't pinpoint exactly, but just seems off.
2) Locations seem like they'd be hard to verify -- were previously using pop-up tents (mentioned on conf call) to sign up non-banked people to all these govt programs, now trying to move into convenience stores, yet website has no "Locations" link for where new potential customers might go if they were using free internet at the library, for example, and wanted to find a place to signup. Sort of feels like website is built for investors, not customers.
3) "Blockchain Technology Platform Hybrid Cloud" is touted on their website, but this appears to be buzzword stuff that is total nonsense. 10-Q says, "Surge Blockchain: Revenues are generated through the sale of various products such as energy drinks, CBD products, and other top selling products in convenience store and bodega nationwide. At the time in which our products are sold at the store our performance obligation is considered complete. At point of sale, our web portal platform initiates an automated clearing house transaction (ACH) resulting in the recording revenue."
4) Company seems to have jumped around from product to product over the years. Never successful at any of them.
5) November 2021 company did a 50-for-1 reverse split
6) Company is dual-listed on something called the Upstream exchange, which is some supposed exchange in the Seychelles that also does crypto, NFT's, etc. This reminds me an awful lot of a few years ago when every stinky pinky was getting listed on the Frankfurt Exchange in Germany. Why? That costs a lot of money. Is their really some massive demand for your crappy pinksheet stock in other countries? Really, seriously? Yet that was always their claim. I always thought one of the more likely reasons was so insiders could do wash trading (to run up the price) in their own stock that was tougher for regulators to track down. Seriously, how many people are going to sign up for some crypto exchange in the Seychelles? And of that small number, how many are ever even going to know about your little company? Seems absurd to be wasting time on this. Can't think of any good reasons, but can think of lots of bad ones.
Finally, can also think of many ways to buy a list of people and sign them up for this ACP program without their knowledge. If a free tablet arrives at your home, with some free internet each month, who's going to complain? Or if all the user info matches up with the info in the food stamp database, does the govt even ask for verification that you sent them a tablet, or do they just start reimbursing you? (There was huge fraud in the govt PPP loans and all that. Criminals in jail were getting big money sent to them. How close is the govt checking this stuff?)
Forget the exact date, but company only started on this ACP govt program about 1.5 years ago. It could all be true, but has a scammy feel. Could go along great for a year or two and then end up a zero overnight if there's some govt fraud discovered, or even if the govt just discontinues the program (though that seems unlikely as we trudge unrelentingly toward socialism). Even if it is all true, it's a very distasteful business that only encourages people to become further dependent on the govt. Ugh.
Join the InvestorsHub Community
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
