InCapta Inc (INCT)

[big_money_insiders]

David Randolph recent positive post. A walking contradiction.

Profile: GamezNFlix, Inc (GZFX.OB). Formerly known as Point Group Holdings, Incorporated.. The Group's principal activity is to rental on-line DVDs and video games to it's subscribers. The Group provides a large selection of video game rental choices to its customers on a monthly subscription basis. The Customers can sign-up via the web page and get the games shipped to them through first class mail. The Distribution centers are located in a home-based office space in Franklin, Kentucky, with VeeGeeZ maintaining one location and a distribution center in a home-based office space in Santa Clarita, California. The Group operates solely in the United States.

I've seen their website and concept: http://www.gameznflix.com/

Oh God, I just wish I lived in the US, you guys have everything there

The company already has revenues:

«The Company reported gross revenues of $243,982 and $405,755 for
the three and six months ended June 30, 2005 of which substantially
all of our gross revenues were derived from monthly subscription fees.
During the three and six months ended June 30, 2005, our subscriber
base averaged approximately 3,000 subscribers per month. »

Revenue growth from the first to the second quarter was about 50%. If the pace of subscriber growth continues at 3,000 per month (it may accelerate), their revenues would grow to about $4M in a year. With gross margins of 42% the company would have a gross profit of $1.68M.

It's current market cap is $7.59M.

A couple of weeks ago this news was out:

Circuit City to Offer GameZnFlix's Online Video Game and DVD Rental Program

I think subscriber growth for this company can go from arithmetic to exponential. The business model makes sense to me and not only to me, since they're already adding about 3,000 new subscribers per month.

The risk here is that recently they increased the number of authorized shares from 2 billion to 4 billion, and for now they have "just" 925 million shares issued and outstanding. But I see costs being diminished from the year ago levels, so maybe, just maybe, with increasing revenues they won't need to dilute the value of shares so much.

I believe in this company's business model. If I lived in the US I would be a subscriber.

So I'll buy 10% of the 3 Pennies on Fire Portfolio at tomorrow's open on GZFX.OB.