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Mackattack Brilliant Mack, you give me examples that have been...

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27/11/14

13:54

Post #: 14364748
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Originally posted by makattack ↑

What you fail to see is that penny dreadful companies are priced at penny dreadful level because they are purely speccys.

Fail to see? Hardly. Speccies are my bread and butter. CNN is a speccie that is undervalued imo based on its progress. Compare to DDT for example, very similar situation as CNN historically, been around for a while, far-reaching technology, verge of profitability, has a marketcap of $20mill, 3 times that of CNN.

Just look at at Kentor Gold

Yes there are plenty of Kentor Gold examples, as I've said previously most consolidations don't turn out well, because consolidations mostly attract small-cap penny speculative hopefuls who constantly need more money and chance of success is statistically small. So of course there are going to be many more examples of failures than successes. If it was ASX 100 stocks that were attracted to consolidations, the stats would sway the other way. It wouldn't suddenly make CNNs consolidation more chance of being a success. Checking Kentor Gold quickly it appears that the share price actually rose strongly after consolidation, by 20% or so within the next few weeks and it wasn't till 3 or 4 months later that it dropped below the initial consolidation level. Part of the significant drop after that was a result of NOT going ahead with the prospective gold exploration site in Kyrgyz Republic. Kenotr Gold was going to go down regardless of consolidation. Comparing the evolution of a tech company to a mining exploration company is not the most appropriate.

Show me a company that has consolidated and not delivered on profits that has not slid back and we will start to believe you.

Sure, a couple I have been personally involved in are NWT and ISN. Both rocketed after consolidations, multi-baggers. Both unprofitable. Years on both are below the initial consolidation level but again that would have happened anyway because they didn't achieve their goals and in NWTs case, many many more shares were subsequently issued and they remain unprofitable. There would be a number of success stories amongst the poor in consolidations. It's not black and white as you see.

And by the way, I have friends who love to punt on shares priced at a margin of a cent. Now and then they make nice little runs to $0.05 to $0.10 and they make a fortune out of them Example, AIY.

And? Who hasn't playing this end of the market? My best is .6c to 6c. But what is the relevance? How much did they make on CNN whilst its been stifled between .2c and .4c for the good part of 2 and a half years now?

Consolidate at 10 to 1 and if no improvements come out then by your own argument the price will drop back to $0.002. That would be its true value.

Baloney. The shareprice would never drop back to .2c unless there was major share issues. You're implying that the marketcap of this company could get as low as $700,000. The shell value alone is worth 3 times that. The share price is already rock bottom. At .1c its a $3.5mill marketcap company. It's undervalued, there is very little being attributed to the immense potential, to some extent understandable due to the history, but nevertheless still undervalued.

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Mackattack

Brilliant Mack, you give me examples that have been failures. Really brilliant to support your argument. and then you came out with sweeping statements like "they would have fallen anyway." You have no way of knowing that. You can summise as much as you like but you cannot use it because it cannot be proven. What we do know is that in vast majority of cases the price will slide back.
Mack, it takes about $1M to float a company. Why would anybody pay $2.1M for a shell instead? The low price of CNN is actually supporting a capitalisation that is not warrented (in my opinion of course).
You brought up the point about people not looking at companies such as CNN because of the share price. I am telling you that there are people who are actually attracted to it. $0.002 to $0.003 is a 50% return, with very little down side risk!

Pear

CNN Price at posting: 0.2¢ Sentiment: None Disclosure: Held
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