First and foremost, I think that I will choose to believe that MGRN(D) has a plan that is not to screw us loyal long shareholders. I’m choosing to believe this because if they had original intentions to screw us loyal long shareholders, they would have never cancelled their previously scheduled reverse split. They would have shown complete disregard as all of those other companies that have executed reverse splits on us to start the dilution process all over again. Again, instead, they cancelled their reverse split and issued a forward split. They could have positioned themselves to dump more shares at much higher prices at the expense of shareholders by following through with their reverse split. Again, instead, they issued a forward split. For whatever their reason for doing such, it provided the much needed hope for us shareholders that were fully depleted from the days of when they were going to do the reverse split. Bottom line… they brought life back into their company from a market perspective.
Now comes the good part… or to some… maybe the bad part. There are two considerations that I think MGRN(D) investors should be focusing on to consider as Revenue streams for MGRN(D); the Mining Operations and the Internet Service.
Let’s start with the mining operations. With the MGRN(D) shares that are about to be available to sell, one can only wonder if investors will begin to sell after seeing so much of a gain in their accounts or will they believe in the current $50 million valuation that the company has presented in the news below concerning their gold mining operations:
Let’s analyze this current ”Fundamental Valuation of MGRN(D)” to see if it is going to be worth taking the risk to weather the storm during any kind of a selloff if huge selling begins to happen when everyone gets their shares deposited into their brokerage accounts.
From researching the type of mining that would be done, it was discovered that the mining would be alluvial mining. This is a more simple type of mining versus your traditional hard rock or lode mining. If you were to research the Net Costs for alluvial mining, you would see that the Net Costs (or Net Expenses) for mining an alluvial mine is somewhere within $400 to $700 per ounce. For the purpose of this post, I will take it one step further and use a conservative Net Cost of $800 per ounce. With the price of gold currently being at $1600+ and growing, that’s a worst case scenario of $800 per ounce for Net Profit. That means that we can use a 50% profit margin for determining an Earnings Per Share (EPS) for this upcoming MGRN(D) potential Fundamental Valuation.
To determine the EPS of a stock, you must use the fundamental formula below since we have already determined how we will derive Net Profit/Income as indicated below…
Net Income ÷ Outstanding Shares (OS) = Earnings Per Share (EPS)
MGRN stated in their PR above that “the company currently estimates the Gold Reserves on the property to be in excess of $50 million,” but we will keep the amount at a bottom of $50 million. As a worst case scenario and to still remain conservative, let’s figure that when the company states… ”in excess of $50 million” that such does not include Net Expenses. Basically, if there is a 50% Net Profit Margin then the different is the 50% Net Expense Margin as we will conservatively derive Net Expenses as indicated below…
$50,000,000 x .50 = $25,000,000 = Net Expense
Revenues – Net Expense = Net Income/Profit $5,000,000 - $25,000,000 = $25,000,000 Net Income/Profit
This means that a more fair consideration for a price expectation if MRGN(D) achieves their objectives would be as indicated below…
24.50 P/E Ratio x .0036 EPS = .088 per share
Based on ”potential” here with MGRN(D), the stock could be justified to fundamentally trade anywhere between .043 and .088 per share. When the company stated that their numbers were ”in excess” within their PR, that could mean some very significant amounts greater than $50 million depending on how conservative the company really knows how such is to be taken under consideration.
Now let’s consider taking into account the MGRN Internet Service. MGRN is the only entity in Guyana that has their foot in the door to provide this type of internet services. With whom MGRN is partnered, they have the only approved license to transmit this type of service to date. Residents currently in the city have limited access to television and internet services through either a single government owned channel or Direct TV/Satellite which less than 1% of the population currently uses due to the high installation & maintenance costs. The current internet presently available in the area through hard wire is virtually unaffordable by residents because it requires high installation fees as well as a high monthly fee. MGRN will offer something more affordable that will cost less than half of the current price which will open it up to the majority of the households and enabling it to reach critical mass: http://finance.yahoo.com/news/Marquis-Tech-Holdings-bw-2027276614.html?x=0&.v=1
To further explain why this news could transform into something huge for MGRN for creating a steady flow of revenues, according to the Cooperative Republic of Guyana Reportin 2002, there are 185,800 households as the current census for Guyana back then: http://www.statisticsguyana.gov.gy/pubs/prelim_census.pdf
Since the populations around the world have been growing, I would like to guess that the population in Guyana is far greater than 185,800 households that were reported back then in my opinion to where I believe that it is far greater than 200,000 by now. Even if such is not the case, I will use half of the 185,800 for the consideration listed below. I think it is conservatively safe to say that each household would pay at least somewhere in the area of $10.00 per month for their services. Now consider below:
92,900 x $10 per month = $929,000 Internet Service Revenues per month
$929,000 per month x 12 months = $11,148,000 per year Since I am not sure of what their Profit Margins are, I will go with a conservative 25% Profit Margin. This means that MGRN can expect to receive Revenues in the amount below from their Internet Service provided…
$11,148,000 Internet Revenues per year x .25 Profit Margin = $2,787,000 Net Profit per year from Internet Service
Still…
Net Income/Profit ÷ Outstanding Shares (OS) = Earnings Per Share (EPS)
$2,787,000 Net Income ÷ 6,852,662,988 Shares = .0004 EPS
12 P/E Ratio x .0004 EPS = .0048 per share for Internet Services
So, from their mining operations and their Internet Services provided, MGRN could be justified to trade in the area of…
.0048 per share + .088 per share = .0928 per share
There is a chance that as soon as investors receive their shares from the forward split that they might immediately dump them. If these valuations above are in the least bit confirmed to be real, then there would be a huge recovery and move upwards to follow if any major selling occurs. The ball is in the company’s court to confirm that they have started or position themselves to start their gold/mining operations. If they have, then the .092 per share will be very much achievable especially since it is coming from these levels versus its original .0001 per share levels. A different breed of investors will appear on the scene to keep MGRN over into the pennies in my opinion.
We still have to at least give some thought to some earlier shorting/naked shorting thoughts I previously posted in the link below. Even if I am 100% wrong with the post below, still, that would mean that all of the volume was not covering as I had suggested only as an option to consider as explained in the post below: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=65390008
To further analyze some more thoughts, there were a total of 492,627,003 shares that were traded from 19 to 22 July 2011: Let’s now presume that the price increase from .0001 to .05 or .009 or where ever anyone wants to consider for being the official high to where it’s at now at .0021 was all retail buying from investors taking positions in MGRN(D). Maybe I still do not understand the process with having this “D” suffix at the end of stocks doing splits, but… Where are the shares coming from that have recently been sold to the public causing the price to go from to .0001 to some recent highs if all of the shares were supposed to have been gathered by the Transfer Agent (TA) to be recompiled and sent out to brokerage companies to include the 3% forward split?
I think what has happened (as another option to consider) is that the company has positioned itself for a better chance of price survival by positioning the company to have the remaining Float bought up where doing so would not be combating the selling of those investors part of the Float pre-split. This gives the company time to do certain operational things that should make those investors who are part of the Float pre-split want to hold their shares. If they truly have huge news of substance, then I suspect it will be released upon the day of the shares hitting the brokerage accounts from the Transfer Agent or soon after. I think they are ramping up to begin production and to start to produce some production numbers fairly quick here.
As you can see below within the change of control section within their filing, the new CEO and Chairman of MGRN is Mr. Saratu Phillips who took over the company from former CWRN key personnel indicated below where a majority of the voting shares changed hands to where the new CEO, Saratu Phillips, owns the majority vote from owning over 2 billion shares; a 52% controlling interest:
All I can say from this is that I think many investors are very aware of the move that CWRN has had from .0002 to going over .03+ per share over the past few months; all with having the caveat emptor sign on pink sheets for the company. Again, MGRN is OTC Pink Current Information status. I could be wrong, but I think that the pre-CWRN management/affiliates is aware of what is happening here with MGRN and probably has a finger in the mix for some guidance on what MGRN needs to do to be successful. CWRN has proven that they know what to do to get a stock trading from .0002 per share to the pennies. To add, analyze the CWRN volume situation over the past few months where billions of shares had traded to be part of their price increase from the .000s to the pennies versus what I think can also happen here to with MGRN. If we get that kind of buying volume here with MGRN, then any selloff won’t have any affects on MGRN price to cause it to go down. The price would on the contrary should go up.
One could only guess as to what will be our fate here with MGRN. As things continue to unfold, in my opinion, it does appear that they do have a plan for success operational and market wise. Their wireless operation has the potential to be worth MGRN fundamentally trading in the .0048 per share price range. Their gold/mining operation has the potential to be worth MGRN fundamentally trading in the .088 per share price range. That’s a combined total to be trading in the .0928 per share price range. Stabilizing over .004+ should be fairly easy even after the delivery of the forward split shares into the brokerage accounts by the Transfer Agent. These thoughts above are only my opinions as to what I believe of which I’m guessing that we will really know in less than two weeks of which the forward split shares should have been swapped back into the brokerage accounts by the Transfer Agent by then.
AI
