RNKE.... When you look at a PR, and this is for all stocks, you have to suspend your sense of belief and read it with a careful eye. Then you must apply the logic of what you already know.
First off... take a look today's PR.
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OTCBB:RNKE) has announced that upon completion of the $10 million bond the company plans on allocating up to $2 million to purchase their own stock in the open market. The $10 million bond should be complete in mid January.
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There are two things here to take note of.
First off, the operative phrase here is "plans on allocating". This means that they would like to, may expect to, but they are not guaranteeing it.
And secondly, the bond is and will not be complete until the middle of next month (at earliest.) This means they're doing nothing at this point other than to suggest you considering buying now because they will want to buy afterwards and, as we all know, buyers move a stock up. Or so it's been rumored.
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"Once bond is complete we will be more than happy to come back into the open market and repurchase up to the $2 million worth of our own stock. We are also sure that our shareholders will appreciate this effort on our part," said David Smith CEO of Roanoke Tech.
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This is a careful reiteration of the two notes above, except it's quoted from the CEO to give it authenticity.
It basically says they'd be "happy to", but, of course, there's no guarantee. And none of this happens until the bond is complete.
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Note: "Safe Harbor" Statement Under The Private Securities Litigation Reform Act of 1995: The statements in the press release that relate to the company' expectations with regard to the future impact on the company's results from new products in development are forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. Since this information may contain statements that involve risks and uncertainties and are subject to change at any time, the company's actual results may differ materially from expected results.
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This the legal disclaimer telling you you're on your own. Note the last line. "actual results may differ..."
Now let's get to what we already know, or learned from some basic DD.
Since the last quarterly, which placed the OS at 200M as of 9/30, there have been:
An SB-2 filing that took place 11/19. This is a shelf registration for 726M. They are the expected issuance to cover a debenture. This makes for a clear case of dilutive shares coming (or already are) in to the market.
And there have been 3 S-8's, shares for services, that released another 428M shares in to the market. Again, it seems like a clear case of dilution.
Knowing this, ask yourself:
Why must they buy back shares they are issuing? Why not issue less? Couldn't they find a better means to paying off the debenture? And why are they paying so much in services?
Then there's the matter of the bond itself. What are they using as collateral for it when their assets, as of the last quarterly, were less than 400K?
Lastly, take a look at some of the other PR's. There's one mentioning ONLY that they were spoken about on IBCRadio.com. Nothing saying whether it was a positive or negative discussion, and no note of how the developments where looked at. And several other PR's are basically repeat news releases. Sort of like, one to say "We're making progress." And the next to say "We've made more progress."
Now after you have looked at and factored all this in, apply the logic. And play the results. Just make sure you know what you're playing and how you're going to play it.
I hope no one feels this post was too sermonizing, it was not my intent. Feel free to consider the source and ignore this.
best of luck and happy holidays to ALL
rich pearl
