3SOF

1. Introduction

As you know I've been making quick studies of about 20 stocks per trading day on the 3 Stocks on Fire Portfolio message board (http://www.3stocksonfire.org/trading/index.php?board=38.0). This means I've covered about 160 new stocks over the last 8 days.

I dislike most of them, but some I like, and just a few I love. CPNE.OB is more than love, it is exactly the kind of stock and business I've been looking to own for the long term.

2. Profile

Commerce Planet, Inc. (CPNE.OB), together with its subsidiaries, operates as an online commerce and business solutions company in the United States and internationally. It provides e-commerce, business and media solutions, and loyalty club memberships through its Web sites, onlinesupplier.com, buydiscount.com, and mysoftwaretutor.com.

3. Technical Analysis
3.1. All history chart

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=32567;image)

This is a classic penny stock chart, but also classic for many technology stocks.

3.2. Medium term chart

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=32568;image)

The trend has been up since last April or so, and yesterday the stock made a powerful bullish breakout above its medium term resistance. The medium term trend is clearly bullish.

3.3. Short term chart

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=32569;image)

That is a powerful white marubozu with volume above average. The short term trend is bullish (I refuse to consider overbought/oversold indicators, been there, done that - they don't work).

So, overall, technical analysis favors a buy order for CPNE.OB. Let's hear the fundamental tune.

4. Fundamental Analysis
4.1. # shares outstanding + market cap

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=32570;image)

Naturally there has been dilution over the latest quarters as the company was still losing money, but not much recently, as it turned profitable and cash flow positive.

In fact, the company initiated a stock repurchase plan:

• CommercePlanet Announces $2,000,000 Stock Repurchase Program (http://biz.yahoo.com/prnews/061128/latu048.html?.v=79)
PR Newswire (Tue, Nov 28)

The current market cap is 47.5 million shares outstanding*$2.35 = $111.6 M

4.2. Long term debt + current ratio

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=32571;image)

You can see on the graph above how long term debt was reduced to almost zero, just $48 K in Q3 2006. The graph also shows how the short term liquidity picture improved, with the current ratio now comfortably above 2.

4.3. Revenues + gross margin

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=32572;image)

You can see I'm comparing CPNE.OB with Google. That's because I think they are more or less in the same space, serving as intermediaries on the internet, between businesses and consumers.

Of course, CPNE.OB is growing from a very small base, hence the big growth differential, but also check the higher gross margin for CPNE.OB, at 86%, and the much lower price to sales ratio, 4 for CPNE.OB and 16 for GOOG.

Given the growth differences and the higher gross margin for CPNE.OB, it should trade at a higher revenue multiple than GOOG. That would make CPNE.OB's share price more than quadruple from current levels.

4.4. EPS + net profit margin

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=32589;image)

Again, CPNE.OB has a superior net profit margin when compared to GOOG (at least considering Q3 2006), but the forward earnings multiple is about 8 for CPNE.OB and 36 for GOOG.

5. General Overview

CPNE.OB looks too good to be true. But I've read their latest SEC filings and found nothing wrong. It looks like a company that took some time to find its true business model on the internet, but now found one that is extremely profitable.

I've been looking for businesses like this, being based on the internet and showing very fat gross and net profit margins, because I know the market values them a lot (the same happens with software companies, many times they don't sell a lot, but almost all of what they sell is profit).

CPNE.OB's business is somewhat complex, with several subsidiaries and trying to do everything at the same time (what a 30 year old would do, the CEO, Michael Hill, is just 29 years old, even that resembles Google), but the big revenue jump and profits are coming from www.onlinesupplier.com.

People pay about $40 a month for the dream of working from home, establishing an e-commerce business (and maybe not just the dream, with a bit of work they will probably get those $40 back plus more to add to their regular income). The company connects producers and online retailers wanna-be, serving as an intermediary, the way google does with advertising.

I guess CPNE.OB is exactly the kind of business/stock I've been looking for. I would love to own it myself.

I can do that, at least partially, all I have to do is buy some shares. That's what I'll do today (yesterday I bought a small position for the 3 Stocks on Fire Portfolio (http://www.3stocksonfire.org/3stocksonfire_3sof.php) at $2.08, but that's for short term trading purposes, not to own a business).

I still have some doubts about how everything works with all subsidiaries of Commerce Planet, and you know, this is an OTCBB traded stock, so one can be deceived, but I believe the profit potential clearly outweighs the risks.  

6. Trading Plan

Buy 6.66% of capital on CPNE.OB for the Main Portfolio (http://www.3stocksonfire.org/3stocksonfire.php)

I'm confident Q4 will be even hotter that Q3 at CPNE.OB, look at the latest press releases from the company:

• Commerce Planet's Consumer Loyalty Group Announces All-Time Records for New Memberships (http://biz.yahoo.com/prnews/061212/latu062.html?.v=76)
PR Newswire (Tue, Dec 12)

«Consumer Loyalty Group, enrolled an all-time daily record of 3,466 paid memberships for December 6th, 2006. In addition, the week of December 4th set a new all-time weekly record for membership signups of 19,600.»

«Commerce Planet CEO Michael Hill stated, "We are finally beginning to fire on all cylinders. Our new-membership growth experienced a dramatic increase in volume for the month of November and has continued to gain momentum into the month of December. I am excited to see the results of this surge in order volume as it translates into top and bottom line revenue."»

• Commerce Planet's Consumer Loyalty Group Sets New Record for Monthly Memberships; Third Consecutive Month of Order Growth (http://biz.yahoo.com/prnews/070104/lath049.html?.v=79)
PR Newswire (Thu, Jan 4)

«Commerce Planet, Inc. (CPNE.OB) announced today that its subsidiary, Consumer Loyalty Group, enrolled an all-time monthly record of 71,971 paid memberships for December, 2006. This represented an astounding 50% month-over-month increase in paid memberships from November.»

You see, I wasn't even considering these latest news on my initial analysis, which already showed incredible growth rates and profit margins. I can't wait to see how Q4 numbers will look like, when the company reports them just a few weeks from now (they said they will file the 10-K with the SEC in late February).

Just buy and hold CPNE.OB.

David, is CPNE.ob is trading now @ all-time high? Stockchart.com & Metastock Software have different all history chart..

Hmm, that is odd.  I get basically the same chart as you Terliso with stockcharts.com:

http://stockcharts.com/h-sc/ui?s=CPNE&p=D&st=1998-08-01&id=p40055820495

but on my etrade, it looks a lot more like Davids data, but shows the high in 98 at about $240!  There was probably some splits or something that affected the data?

I think stockcharts.com chart is incorrect, because it's not considering the reverse splits. Look at the spike in the beginning of 2004 on your chart Terliso, probably that was a reverse split. Adjusting for that reverse split you probably get a chart that resembles mine.

Tokyo, it looks like your etrade chart has more data than my Metastock database, yours goes back to 1998, and mine only goes back until late 2000.

But there's no doubt about it, there were several reverse splits and share count increases along the way, so the chart doesn't correctly reflect the evolution of the market cap.

It correctly reflects the evolution of the share price, that is, someone bought at $240/$2.4 = 100 times more than the current share price (in relative terms), so, if he held all the way since 1998, he's losing 99% of his money.

But, I'm positive that CPNE.OB is at a new all time high in market cap terms. Current market cap is $2.4*47.5 million = $114 M.

If this is all new and confusing to you, here's a good chance to solve those doubts, just ask on this thread, I'll be glad to address them.

Let's make a 4th quarter estimate for revenues and EPS for CPNE.OB.

Revenues in Q3 were $7.627 M. Net Income was $3.114 M. We had two press releases saying that the company enrolled an all-time monthly record of 71,971 paid memberships for December, 2006. The subscription price is $49.95, so I see $3,594,951 in new revenues just in December.

The press release says December's numbers were 50% above from November's. I get 35,985 new memberships in November. That counts for $1,797,475.

Let's consider monthly growth in November was also 50% from the prior month, October. I get 17,993 new subscriptions in October, that means $898,725 in new revenues for that month.

Now let's consider a very high costumer churn of 50%, each month (I don't know if this is too high or not, it depends on the quality of the service).

October contributes with $898,725 + $449,362 + $224,681 = $1,572,768 for Q4.

November contributes with $1,797,475 + $898,737 = $2,696,212

And December gives $3,594,951 in new revenues.

Sum this up and get $7,863,931 in new revenues for Q4, 2006.

Of the $7,627,533 Q3 revenue, $6,036,364 came from subscriptions. The rest came from the company's other subsidiaries, that is, $1,591,169, which we will leave constant.

Assuming the same monthly churn of 50%, the $6,036,364 obtained in Q3, divided by the 3 months, are $2,012,121.

So, this gives me just $1,006,060 for October, $503,030 for November and $251,515 for December. That is a $1,760,605 revenue contribution for Q4.

Summing it all I get $11,215,705 for 4th quarter revenues. If they maintain the net profit margin of Q3, which was 40.83%, net income for the quarter will be $4,579,219, which translates into $0.0964 EPS.

Annualize this quarterly EPS number and get $0.3856 EPS for a full year (not considering growth), and that means CPNE.OB's forward earnings multiple is 6.22.

What I'm very curious to find out is the actual churn rate. I'm considering their service is really a piece of shit, you know, because to have half of the subscribers canceling their subscription each month it really needs to be bad service.

Given this I guess there can even be a positive surprise to these estimates ... we'll see.

One thing is for sure. CNPE.OB is a strong buy at current levels.

Better Business Bureau report shows almost 300 complaints.

http://www.santabarbara.bbb.org/BBBWeb/Forms/Business/CompanyReportPage_Expository.aspx?CompanyID=2000066

I don't think this is a significant number considering the numbers of members they are citing.

Is there a selling plan on CPNE? Or plan is to hold through earnings... Im up almost 50% and was deciding if I should sell out 50% of my holdings once 50% gain is reached and let the other half ride. I would hate to see these gains vanish as it has happened before with other stocks.

how much do you guys think this is currently worth? and when is earning?

Here's a not too flattering consumer review of onlinesupplier.com:

http://www.explorewholesale.com/reviews_pg2.html

Despite the bullish run of CPNE.OB I'm weary of investing in companies whose business is not well received by their customers.

Well if they earn .09 this quarter, plus the last 3 quarters, with a 20 PE ratio thats $3.6

If they continued to earned .09 a quarter with no growth for 2007 with a 20 PE ratio thats $7.20

If they continued to add .03 to the EPS every quarter like they have been... EPS for the next 4 quarters would be .09+.12+.15+.18= .54 with a 20 PE ratio would be $10.80

I guess it all depends on your long or short term outlook and if the company continues this growth which looks very promising. Anything over .09 would be very bullish IMO

Quote from: nullzero on February 03, 2007, 03:33:53 AM
Is there a selling plan on CPNE? Or plan is to hold through earnings... Im up almost 50% and was deciding if I should sell out 50% of my holdings once 50% gain is reached and let the other half ride. I would hate to see these gains vanish as it has happened before with other stocks.

I can appreciate this greatly and have often wondered this myself. I have seen differing patterns on this site and recommendations. If memory serves me, I believe David doesn't recommend this but I saw Ramsburg recommend this on DIVX back in December when it was smokin but then gradually started a decline.

With that said, since this thing has risen strongly very quickly, I bet it could also go in the opposite direction just as quick. But looking at it technically, it appears not to have a problem at the moment. Of course fundamentally it is still quite strong but anything can happen.

I didn't spend the time to look this up on the site but I wonder if there is a forum talking about this very topic?  ???

I am still going to hold for lot longer and see what happens until I see the charts tell me otherwise. GLTA

Quote from: boatguy on February 02, 2007, 07:20:58 AM
Better Business Bureau report shows almost 300 complaints.

http://www.santabarbara.bbb.org/BBBWeb/Forms/Business/CompanyReportPage_Expository.aspx?CompanyID=2000066

I don't think this is a significant number considering the numbers of members they are citing.

This is valuable information boatguy. If the monthly churn rate is, say, 20%, instead of the 50% I was considering, results will be much, much higher than I was estimating.

But still, even with my very conservative estimates, CPNE.OB should rise 4 or 5 fold to be fairly valued :o

Quote from: nullzero on February 03, 2007, 03:33:53 AM
Is there a selling plan on CPNE? Or plan is to hold through earnings... Im up almost 50% and was deciding if I should sell out 50% of my holdings once 50% gain is reached and let the other half ride. I would hate to see these gains vanish as it has happened before with other stocks.

I don't like that "sell half", "hold half" strategy. A man either buys or sells, "selling half" is like not knowing what he's doing, or being afraid. Money comes from confidence, not fear. "Sell half" increases confusion in one's head ... so, is it a buy or a sell? "If I'm holding half, it probably is a buy. On the other hand, since I sold half, probably it is a sell, I should sell the other half". These doubts will never leave you if you sell half, and you'll sell the other half pretty quickly on any shake out.

Quote from: kpunarc on February 03, 2007, 09:34:42 AM
how much do you guys think this is currently worth? and when is earning?

I think CPNE.OB has it all to be a 10 or 20 bagger, if one has the ability to sit tight and let the profits run. He also needs strong hands to hold on the several corrections that will happen without a doubt.

Earnings will be out near the end of this month.

Just with the current publicly known information I think CPNE.OB is worth more than $14 a share, not considering possible future growth.

Quote from: capricho on February 03, 2007, 11:02:39 AM
Here's a not too flattering consumer review of onlinesupplier.com:

http://www.explorewholesale.com/reviews_pg2.html

Despite the bullish run of CPNE.OB I'm weary of investing in companies whose business is not well received by their customers.

Thanks for the link capricho :)

So, they keep calling to sell their products to their costumers? That's annoying? Great for shareholders !

You need to keep in mind that you're a shareholder, not a costumer. A shareholder wants revenues and profits. Costumers want different things, if they could, they would want excellent service without paying.

Those concerns are legit on a very long term basis, and these reviews explain why I consider such a high costumer churn rate of 50% monthly.

Quote from: prodigykid6 on February 03, 2007, 11:08:40 AM
Well if they earn .09 this quarter, plus the last 3 quarters, with a 20 PE ratio thats $3.6

If they continued to earned .09 a quarter with no growth for 2007 with a 20 PE ratio thats $7.20

If they continued to add .03 to the EPS every quarter like they have been... EPS for the next 4 quarters would be .09+.12+.15+.18= .54 with a 20 PE ratio would be $10.80

I guess it all depends on your long or short term outlook and if the company continues this growth which looks very promising. Anything over .09 would be very bullish IMO

Nice math prodigykid6, that's the way to go :)

I think CPNE.OB should have a higher than 20 multiple, because of its growth rate and extremely fat gross and net profit margins.

QuoteWith that said, since this thing has risen strongly very quickly, I bet it could also go in the opposite direction just as quick.

No, no, stocks don't work that way.

QuoteI didn't spend the time to look this up on the site but I wonder if there is a forum talking about this very topic? ???

You mean, a topic like "when to sell"? No, there isn't, but you can create one if you please on the Members Corner (http://www.3stocksonfire.org/trading/index.php?board=13.0).

Ok, since you're so anxious about CPNE.OB (you should be more anxious and nervous when you're losing, you need to fight those natural instincts, a speculator is a different kind of man), I'll tell you what my selling plan is:

- On the 3 Stocks on Fire Portfolio (http://www.3stocksonfire.org/3stocksonfire_3sof.php) I plan to hold all the way in February, expecting a gap up on the 4th quarter earnings release to take profits on the news.

- On the Main Portfolio (http://www.3stocksonfire.org/3stocksonfire.php) I'm going to hold it for the long term, through the ups and downs, for as long as I see 20 bags of profit in this stock, I'm not willing to let go of it for less than that. It's very rare to find a stock with this kind of profit potential, if one misses these ones, it will be much harder to be head and shoulders above all rest in terms of performance !

My recommendation today, besides obviously being to sit tight and keep on holding CPNE.OB, is for you to read the following: Reminiscences of a Stock Operator (pages 60 - 71) (http://www.3stocksonfire.org/trading/index.php?topic=7882.msg79516#msg79516) ... especially this excerpt:

«And right here let me say one thing: After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I've known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level which should show the greatest profit.

And their experience invariably matched mine - that is, they made no real money out of it. Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money. It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of his ignorance.

The reason is that a man may see straight and clearly and yet become impatient or doubtful when the market takes its time about doing as he figured it must do. That is why so many men in Wall Street, who are not at all in the sucker class, not even in the third grade, nevertheless lose money. The market does not beat them. They beat themselves because they cannot sit tight. Old Turkey was dead right in doing and saying what he did. He had not only the courage of his convictions but the intelligent patience to sit tight.»

Have a nice day :)

News ;D

Commerce Planet's Consumer Loyalty Group Sets New Record for Monthly Memberships; Fourth Consecutive Month of Order Growth

http://biz.yahoo.com/prnews/070205/lam048.html?.v=69

Consumer Loyalty Group, Inc. enrolled an all-time monthly record of 91,729 paid memberships for January 2007. This represented another astounding month- over-month increase in memberships from December of over 25% and over 90% from November.

Quote from: boatguy on February 05, 2007, 07:23:03 AM
News ;D

Commerce Planet's Consumer Loyalty Group Sets New Record for Monthly Memberships; Fourth Consecutive Month of Order Growth

http://biz.yahoo.com/prnews/070205/lam048.html?.v=69

Consumer Loyalty Group, Inc. enrolled an all-time monthly record of 91,729 paid memberships for January 2007. This represented another astounding month- over-month increase in memberships from December of over 25% and over 90% from November.

Using David's assumption that only 50% of the new subscribers will continue their subscriptions January added $2.3 million in new revenue. Remember this is on top of the base revenue from previous months. That is phenomenal for a company of this size (I will try to post a bit more sophisticated revenue model later  :)).

I know that David advise us to sit tight but I am afraid I might add a bit today in case we are seeing some weakness  ;)

This is a golden opportunity.

QuoteUsing David's assumption that only 50% of the new subscribers will continue their subscriptions January added $2.3 million in new revenue.

I'm wondering about these calculus Michael. What is the price you're using for each subscription?

On some consumer complaints I saw they charge $49.95, on capricho's link I see $29.95, on the Terms and Conditions of their service I get this:

«f you subscribe to a service on this site that requires payment of a fee, you agree to pay all fees associated with such service, including the activation fee and the monthly web hosting fee of $49.95. For all charges for services on this site, we will bill your credit card or checking/savings account provided to us at activation. Recurring charges will be billed to the account you have provided us at the time of activation and will be billed every 30 days thereafter unless you contact customer service to cancel your membership. You agree to provide us with accurate and complete billing information, including valid credit card/checking/savings account information, your name, address and telephone number, and to provide us with any changes in such information within 10 days of the change.»

If the price is $49.95, the 91,729 paid memberships for January 2007 should warrant $4,581,863 in new revenues, not $2.3 M as you say.

Ok, ok, I see what you mean, you consider 50% of people will be out, but that's just for the next month (February), in January, just from new subscriptions they got something like $4.58 M in revenues.

Another part of this press release that I like is:

«I look forward to releasing our annual 10-KSB earnings report in the later part of February and sharing how our recent growth should correspond to increased earnings per share.»

Any way we put this, it is clear CPNE.OB has a long way to go north :)

I had filled 3/4 of a position in CPNE at $2.29 but today I bought another 1/4 at $2.70, which is the middle of Friday's candle. Hope there is not much consolidation gonna happen hence forward.

When can CPNE get rid of .OB?  :P

David, I guess I was over-concerned when you started the new "on fire" portfolio. The way you did over there actually helps main porfolio too. Great job! You are a superman.  ;D

I bought on the dip as well. Picked up another 5k shares at 2.65

The downside had to happen today for it to go forward as we all have learned having patience is what will make us stronger and better investors.  8)  I am going to enjoy the ride the whole way up!  ;D

Quote from: realcoolhead on February 05, 2007, 10:54:19 AM
When can CPNE get rid of .OB?  :P

David, I guess I was over-concerned when you started the new "on fire" portfolio. The way you did over there actually helps main porfolio too. Great job! You are a superman.  ;D

I'm not sure what the requirements are from removing the OB. Does anybody know the requirements CPNE.OB has to have to get rid of the OB? Maybe they will bring up that progress at earnings.

has CPNE announced any intentions for moving to Nasdaq global market (getting off the buuletin board). If so, dif they announce a time frame, when they expect to move.

Thanks

A somewhat off-topic inquiry:

Does anyone on this board know anything about how successful this 'dropship' sales business really can be for someone? I've seen these eBay 'Powersellers' and have read testimonials from folks who use dropship services, but it's hard for me to fathom how one can really make money without selling a ton of stuff. Anyone here knowledgable or successful at using dropship services such as the type that CPNE engages in?

hey David, how do you go about valuing a company's 'fair value'. You said CPNE.OB is worth $14...how'd you figure that?

Quote from: realcoolhead on February 05, 2007, 10:54:19 AM
When can CPNE get rid of .OB? :P

David, I guess I was over-concerned when you started the new "on fire" portfolio. The way you did over there actually helps main porfolio too. Great job! You are a superman. ;D

Lol realcoolhead, don't you lose your cool head, you know the recent pace of gains can't be maintained over the long run (unfortunately). Anyway, it's encouraging to read your words, especially from you.

When will CPNE.OB get rid of the OB? I didn't found any plans for that, but CPNE.OB can do as FRPT.OB, surpass $1 B in market cap and only then move to the Nasdaq. To get rid of the OB CPNE needs to file an application to trade on the Nasdaq, but that doesn't change the fundamental value of the company or its prospects, so it can go up by a lot even while it is trading on the OTCBB, no problems with that.

Quote from: kpunarc on February 05, 2007, 10:56:34 PM
hey David, how do you go about valuing a company's 'fair value'. You said CPNE.OB is worth $14...how'd you figure that?

With estimates and "fair" earnings multiple comparisons.

For example, CPNE.OB had EPS of $0.06 in Q3, so if it maintains that (we know from the press releases it will grow, by a lot, from that basis) for the next 3 quarters, it will show an EPS of $0.24 on an annual basis. 

Google is the only company out there (at least that I know of) with comparable gross and net profit margins (yet Google margins are lower than CPNE.OB) and it is valued at a forward earnings multiple of 36.

Without considering growth, CPNE.OB should be trading at 36*$0.24 = $8.64.

But we know there's growth. I made an estimate for the 4th quarter of $0.0964 EPS, as you can read on page 1 of this thread. If the company maintains that (but, we know it is growing even more), for 4 quarters in a row, it will show EPS of $0.3856. Apply the same earnings multiple of 36 and get a price per share of $13.88 (that's why I wrote the stock is worth about $14 a share!).

The news yesterday says paid memberships grew 25% in January when compared to December. But that's below the 50% monthly growth rate the company experienced in December, when compared to November, and perhaps that can explain part of yesterday's 8% share price drop. Of course, the main explanation must be profit taking, but decelerating growth always makes some people sell ... but that's a non sense, it is obvious the company couldn't keep on growing new paid memberships 50% every month, that is impossible !

For now I'm going to stick with about $0.10 EPS a quarter, that is, $0.40 EPS in 2007, and a fair earnings multiple of 36, due to the company's fat gross and net profit margins. That means $14.4 a share to be achieved during the course of 2007, and I'll keep holding for as long as my expectation is confirmed by incoming developments.

thanks!

Does anyone know what percentage of stock is owned by the insiders? I can't seem to find this info anywhere.

Thanks

I am confused. The 91,729 of memberships in January is the total number of memberships correct? Some postings suggest that it is 91,729 new memberships. Still 91,729 memberships X $50 = $4,586,450 in revenues for just one of their businesses for one month.

From RB

http://www.amalfiresearch.com/report/CPNE1.pdf

Nice report! Its good to see a honest stock report where the people doing the reporting are not getting compensated.

Quote from: eggman11 on February 06, 2007, 02:48:33 PM
Does anyone know what percentage of stock is owned by the insiders? I can't seem to find this info anywhere.

Thanks

Well, just the CEO, Michael Hill, personally owns 10,150,806 shares, that is, roughly 21% of the company. You can find this info in an SEC form filed in October 18, 2006.

It talks there about convertible preferred shares, but then there's no information on the Q3 balance sheet, I'll have to dig that further.

Quote from: eggman11 on February 06, 2007, 06:23:34 PM
I am confused. The 91,729 of memberships in January is the total number of memberships correct? Some postings suggest that it is 91,729 new memberships. Still 91,729 memberships X $50 = $4,586,450 in revenues for just one of their businesses for one month.

I'm also confused. The press releases are contradictory:

«Commerce Planet's Consumer Loyalty Group Announces All-Time Records for New Memberships
Tuesday December 12, 7:00 am ET

«Commerce Planet, Inc. (OTC Bulletin Board: CPNE - News) announced today that its subsidiary, Consumer Loyalty Group, enrolled an all-time daily record of 3,466 paid memberships for December 6th, 2006. In addition, the week of December 4th set a new all-time weekly record for membership signups of 19,600.»

eggman11, I guess you're an American, tell me if "New", "enrolled" and "signups" mean new or existing memberships?

Then, on the latest press release, it says:

«Commerce Planet's Consumer Loyalty Group Sets New Record for Monthly Memberships; Fourth Consecutive Month of Order Growth
Monday February 5, 7:00 am ET »

«GOLETA, Calif., Feb. 5 /PRNewswire-FirstCall/ -- Commerce Planet, Inc. (OTC Bulletin Board: CPNE - News) announced today that its wholly owned subsidiary, Consumer Loyalty Group, Inc. enrolled an all-time monthly record of 91,729 paid memberships for January 2007. This represented another astounding month- over-month increase in memberships (http://increase%20in%20memberships) from December of over 25% and over 90% from November.»

So, increase in memberships or increase in the increase of memberships?

I'm also totally confused by this. Also, on their website, www.onlinesupplier.com it talks about 740,000 people and on boatguy's link it talks about 1 million costumers.

I think the information is contradictory, if someone could call their investor relations it would be great (if nobody does it, I'll do it myself, but not today, I won't be home today).

But still, as you say, even if that's the total number of memberships, numbers still look great.

Quote from: boatguy on February 06, 2007, 08:48:02 PM
From RB

http://www.amalfiresearch.com/report/CPNE1.pdf

Thanks for the link boatguy, I read it carefully.

Quote from: nullzero on February 06, 2007, 10:36:43 PM
Nice report! Its good to see a honest stock report where the people doing the reporting are not getting compensated.

Well, they're getting compensation, and not a small one:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=33004;image)

I think it is incredible what companies pay for this kind of profile coverage. I should do a business like Amalfi Research, instead of 3 Stocks, would make a lot more income, lol, just kidding ;D

The report doesn't make me more bullish on the stock, it makes me less bullish >:( Therefore, I reduce my 2007 price target, from $14 to $12 hehehe

I'll continue holding CPNE.OB.

I purchased some of this stock based on the analysis given on this thread. Yesterday I went ahead and searched through their website, specifically that consumer loyalty group site.

http://www.consumerloyaltygroup.com/programs.html

I started clicking on the links and only a couple seemed real.  Others were either pointers to the same link or just broken.  I wasn't sure what to think.  I'm not debating any of the information David dug up, I'm left to assume the SEC filings are accurate and the other information that's been posted here, etc.  But it made me nervous about the legitimacy of the information.  I work for a start-up and know that a poor website is the last thing you want to show the world, so to see such shoddy work and yet see them report millions in revenues didn't make sense to me.  Perhaps I've looked in the wrong place, and made come away with a poor opinion for the wrong reasons, but it did make me nervous enough to dump my shares and use the funds elsewhere.

Likely, this is a clear indication that the stock is about to triple. :)

I'll be happy to buy back in this board has some soothing words to share about this.

thanks and good luck to all,
N

Quote from: David Randolph on February 07, 2007, 07:41:27 AM

Quote from: eggman11 on February 06, 2007, 02:48:33 PM
Does anyone know what percentage of stock is owned by the insiders? I can't seem to find this info anywhere.

Thanks

Well, just the CEO, Michael Hill, personally owns 10,150,806 shares, that is, roughly 21% of the company. You can find this info in an SEC form filed in October 18, 2006.

It talks there about convertible preferred shares, but then there's no information on the Q3 balance sheet, I'll have to dig that further.

Quote from: eggman11 on February 06, 2007, 06:23:34 PM
I am confused. The 91,729 of memberships in January is the total number of memberships correct? Some postings suggest that it is 91,729 new memberships. Still 91,729 memberships X $50 = $4,586,450 in revenues for just one of their businesses for one month.

I'm also confused. The press releases are contradictory:

«Commerce Planet's Consumer Loyalty Group Announces All-Time Records for New Memberships
Tuesday December 12, 7:00 am ET

«Commerce Planet, Inc. (OTC Bulletin Board: CPNE - News) announced today that its subsidiary, Consumer Loyalty Group, enrolled an all-time daily record of 3,466 paid memberships for December 6th, 2006. In addition, the week of December 4th set a new all-time weekly record for membership signups of 19,600.»

eggman11, I guess you're an American, tell me if "New", "enrolled" and "signups" mean new or existing memberships?

Then, on the latest press release, it says:

«Commerce Planet's Consumer Loyalty Group Sets New Record for Monthly Memberships; Fourth Consecutive Month of Order Growth
Monday February 5, 7:00 am ET »

«GOLETA, Calif., Feb. 5 /PRNewswire-FirstCall/ -- Commerce Planet, Inc. (OTC Bulletin Board: CPNE - News) announced today that its wholly owned subsidiary, Consumer Loyalty Group, Inc. enrolled an all-time monthly record of 91,729 paid memberships for January 2007. This represented another astounding month- over-month increase in memberships (http://increase%20in%20memberships) from December of over 25% and over 90% from November.»

So, increase in memberships or increase in the increase of memberships?

I'm also totally confused by this. Also, on their website, www.onlinesupplier.com it talks about 740,000 people and on boatguy's link it talks about 1 million costumers.

I think the information is contradictory, if someone could call their investor relations it would be great (if nobody does it, I'll do it myself, but not today, I won't be home today).

But still, as you say, even if that's the total number of memberships, numbers still look great.

Quote from: boatguy on February 06, 2007, 08:48:02 PM
From RB

http://www.amalfiresearch.com/report/CPNE1.pdf

Thanks for the link boatguy, I read it carefully.

Quote from: nullzero on February 06, 2007, 10:36:43 PM
Nice report! Its good to see a honest stock report where the people doing the reporting are not getting compensated.

Well, they're getting compensation, and not a small one:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=33004;image)

I think it is incredible what companies pay for this kind of profile coverage. I should do a business like Amalfi Research, instead of 3 Stocks, would make a lot more income, lol, just kidding ;D

The report doesn't make me more bullish on the stock, it makes me less bullish >:( Therefore, I reduce my 2007 price target, from $14 to $12 hehehe

I'll continue holding CPNE.OB.

My eyes must of decieved me, I could of sworn I read we did not get compensated etc. But then again they make the small print so confusing you wont catch the important stuff in the first couple sentences.

Also like to add AOB had a few paid compensated reports out when it was trading at 5s and look at where its out now :).

neo1221, I just came back home because I forgot something (doesn't matter) and saw that you sold CPNE.OB because of some broken links on one of their websites.

Please consider that CPNE has a lot of websites, the most important being www.onlinesupplier.com.

www.3stocksonfire.org also has broken links and dead parts of the website, despite being a slowly but surely growing business 8)

The important thing to keep in mind is: you can't value a company, or make an investment (in this case disinvestment) decision, by their website. I could ask my little brother to make the most beautiful website you've ever seen (he's a junior web designer) and you know how much it would be worth? Close to zero.

I don't know if the stock will breakout beyond $3 today or not, but if I were you I would jump back into CPNE.OB, your selling motive isn't a sound motive to sell a stock.

Good luck :)

I believe with this stock, definitely bullish, Golden Cross in the weekly that suggest that CPNE.ob has good fundamentals. ;)

David, go back to the party & have fun! ;D

Strong breakout over 3! 3.12 currently  ;D on fire!

$$$ ;D >:D >:D$$ Making new 52wk highs as I type this not to mention its at or near the HOD.

You're excited nullzero, but you shouldn't be, always keep your emotions in balance. Or else, to be coherent with yourself, you'll be sad when losing ...

Gains or losses can't make you happy or sad. Be sad when you win and happy when you lose, to counter balance your natural instincts and get to emotional equilibrium.

I bought CPNE.OB "high" for the Main (http://www.3stocksonfire.org/3stocksonfire.php), but that doesn't change the fact that the stock is already the second biggest winner of the Portfolio, and that's what counts!

The chart speaks for itself, fundamentally this is the most attractive stock I've ever studied, just sit tight and let the profits run.

I talked to the the Company (CEO Michael Hill)  and got some info.

The 91,729 in membership subscriptions enrolled in January are new members only. (Although they do include existing members, who enrolled in an additional program.)- Very Good News

He would not reveal the churn rate or the total number of subscribers and has no plans to reveal this information to the public, because he does not want the competition to know this information.

The 740,000- approaching 1,000,000 is the total amount of paying company has add since inception. They realize that this number is confusing and will not mention it any longer.

The average subscriber subscribes to 1.5 different plans.

There has been some discussions concerned a move off the big board, but definitive plans ot timetable has been put into action.

Insider holdings are curently about 30%

The are on track to release earnings in the last week of February. (The auditors are there right now, working hard)

Important footnote for earnings. The are very conservative when it comes to recognizing revenue. The recognize subsciption revenue aproximately 21 days after enrollment. Which is after the trial period and time to make sure that initial package will be sent. What this means is that 4Q06 will not include any revenue from the final 3 weeks of December, which will be recorded in 1Q07.

I believe that this quarter earings will great, but next quarter will be even better.


He was very affable and accomodating in answering my questions. He seems enthusiastic and knowledgable. I thank him for his time.

Quote from: David Randolph on February 08, 2007, 07:18:21 AM
You're excited nullzero, but you shouldn't be, always keep your emotions in balance. Or else, to be coherent with yourself, you'll be sad when losing ...

Gains or losses can't make you happy or sad. Be sad when you win and happy when you lose, to counter balance your natural instincts and get to emotional equilibrium.

I bought CPNE.OB "high" for the Main (http://www.3stocksonfire.org/3stocksonfire.php), but that doesn't change the fact that the stock is already the second biggest winner of the Portfolio, and that's what counts!

The chart speaks for itself, fundamentally this is the most attractive stock I've ever studied, just sit tight and let the profits run.

Yeah I know what its like loosing :(. Im actually not to emotion over the trade, I am sitting on a profit already and actually was pondering over if I should take 50% out soon. It is nice however to be up so much in so little time so I am happier then usual, I know when you let emotion control you decisions you will lose almost everytime. Anyway good luck to all those in CPNE hopefully it can continue its trend.

Hello everyone. I bought CPNE for 2.82 per share and was wondering at what price I should take profits. It's had a good run the last few days but that's what makes me nervous. Please only serious investors respond. All nonsense will be ingored.

PS. I have really enjoyed this website since becoming a premium member. Lots of great research done by Knowledgeable people. Thanks to all who have contributed to me making money this week!!

Quote from: tireslinger on February 08, 2007, 10:50:22 AM
Hello everyone. I bought CPNE for 2.82 per share and was wondering at what price I should take profits. It's had a good run the last few days but that's what makes me nervous. Please only serious investors respond. All nonsense will be ingored.

Don't worry, you'll never get a nonsense reply on this Premium Board.

You need to trust fundamentals to hold a stock for a big profit, because there will always be pressure to make you take a small profit. It's a natural human instinct. Look what Jesse Livermore had to say on the subject, in Reminiscences of a Stock Operator:

«The speculator's chief enemies are always boring from within. It is inseparable from human nature to hope and to fear. In speculation when the market goes against you you hope that every day will be the last day - and you lose more than you should had you not listened to hope - to the same ally that is so potent a success-bringer to empire builders and pioneers, big and little. And when the market goes your way you become fearful that the next day will take your profit, and you get out - too soon. Fear keeps you from making as much money as you ought to. The successful trader has to fight these two deep-seated instincts. He has to reverse what you might call his natural impulses. Instead of hoping he must fear; instead of fearing he must hope. He must fear that his loss may develop into a much bigger loss, and hope that his profit may become a big profit. It is absolutely wrong to gamble in stocks the way the average man does.»

David. concerning your previous post:






                Thats the smartest thing I've read in months.......

                                                  8)

Oops! On My previous post I had a bad typo. The sentence should read "There has been some discussions concerned a move to the big exchanges, but NO definitive plans or timetable has been put into action.  :-\


I talked to the the Company (CEO Michael Hill)  and got some info.

The 91,729 in membership subscriptions enrolled in January are new members only. (Although they do include existing members, who enrolled in an additional program.)- Very Good News

He would not reveal the churn rate or the total number of subscribers and has no plans to reveal this information to the public, because he does not want the competition to know this information.

The 740,000- approaching 1,000,000 is the total amount of paying company has add since inception. They realize that this number is confusing and will not mention it any longer.

The average subscriber subscribes to 1.5 different plans.

There has been some discussions concerned a move off the big board, but definitive plans ot timetable has been put into action.

Insider holdings are curently about 30%

The are on track to release earnings in the last week of February. (The auditors are there right now, working hard)

Important footnote for earnings. The are very conservative when it comes to recognizing revenue. The recognize subsciption revenue aproximately 21 days after enrollment. Which is after the trial period and time to make sure that initial package will be sent. What this means is that 4Q06 will not include any revenue from the final 3 weeks of December, which will be recorded in 1Q07.

I believe that this quarter earings will great, but next quarter will be even better.


He was very affable and accomodating in answering my questions. He seems enthusiastic and knowledgable. I thank him for his time.

QuoteI talked to the the Company (CEO Michael Hill)  and got some info.

Great work eggman11, thanks a lot :)

QuoteThe 91,729 in membership subscriptions enrolled in January are new members only. (Although they do include existing members, who enrolled in an additional program.)- Very Good News

Yes, good news, that means my estimates are more or less correct.

QuoteHe would not reveal the churn rate or the total number of subscribers and has no plans to reveal this information to the public, because he does not want the competition to know this information.

Of course, his main motive isn't the competition, it is the stock market and primarily the consumer market. I bet the churn rate is very high, possibly as high as 50% a month as I was estimating. It doesn't matter all that much for the next 2 or 3 year's of expansion of the company, I believe.

QuoteThe 740,000- approaching 1,000,000 is the total amount of paying company has add since inception. They realize that this number is confusing and will not mention it any longer.

That's the way I understood it.

QuoteThe average subscriber subscribes to 1.5 different plans.

That's nice, those "annoying" phone calls are working.

QuoteThere has been some discussions concerned a move to the big exchanges, but NO definitive plans or timetable has been put into action.

I have no problem with this, CPNE.OB can be a billion dollar company even while it is traded on the OTCBB, FRPT did that.

QuoteInsider holdings are curently about 30%

The CEO also gets 5% of the annual net income of the company as a bonus, so he has a big incentive to push those net income numbers as high as possible.

QuoteThe are on track to release earnings in the last week of February. (The auditors are there right now, working hard)

Cool, delivering on their promises.

QuoteImportant footnote for earnings. The are very conservative when it comes to recognizing revenue. The recognize subsciption revenue aproximately 21 days after enrollment. Which is after the trial period and time to make sure that initial package will be sent. What this means is that 4Q06 will not include any revenue from the final 3 weeks of December, which will be recorded in 1Q07.

I believe that this quarter earings will great, but next quarter will be even better.

I agree. Q1 2007 will beat Q4 2006. There's strong growth on a quarterly basis .

QuoteHe was very affable and accomodating in answering my questions. He seems enthusiastic and knowledgable. I thank him for his time.

Yes, great talk and information eggman11 :)

eggman11 did all the work, all I have to do is to sit tight and keep holding CPNE.OB with strong hands to make a lot of money. I'll do that.

David,

Thanks for you advice, it was good advice, however I executed poorly.

Having bought, sold, and bought back in, I'm currently down nearly 50 cents a share on cpne.   Though I now fear further losses, I will remain faithful to your buy/sell advice, though given my basis is now siginficantly higher than the board's I'm a little lost as to what to do next. However seeing that you bought for the Main at these levels, I am comfortable holding.  I await your sage advice, and hope the board will have mercy on me and not mock me for my rookie mistake(s).

Cheers,
N

Quote from: neo1221 on February 09, 2007, 01:27:01 PM
David,

Thanks for you advice, it was good advice, however I executed poorly.

Having bought, sold, and bought back in, I'm currently down nearly 50 cents a share on cpne.   Though I now fear further losses, I will remain faithful to your buy/sell advice, though given my basis is now siginficantly higher than the board's I'm a little lost as to what to do next. However seeing that you bought for the Main at these levels, I am comfortable holding.  I await your sage advice, and hope the board will have mercy on me and not mock me for my rookie mistake(s).

Cheers,
N

neo1221,

Dont worry, none of us will mock you, we have all made our mistakes, I could tell you a litany of mistakes that sound worse than what you made up to this point, and besides, CPNE still looks bullish (touched the bottom of a narrow channel today) so you can still have a happy ending on this one, in which case it wasnt a mistake overall  :)

QuoteThough I now fear further losses, I will remain faithful to your buy/sell advice, though given my basis is now significantly higher than the board's I'm a little lost as to what to do next.

Do nothing. Sit tight. Sell when I sell. I'm positive you'll make a lot of money on CPNE.OB. I'll be here everyday updating the initial analysis on the stock.

Just relax and don't watch intraday quotes. Focus on something else.

See you on my next update.

Quote from: David Randolph on February 08, 2007, 11:08:53 AM

Quote from: tireslinger on February 08, 2007, 10:50:22 AM
Hello everyone. I bought CPNE for 2.82 per share and was wondering at what price I should take profits. It's had a good run the last few days but that's what makes me nervous. Please only serious investors respond. All nonsense will be ingored.

Don't worry, you'll never get a nonsense reply on this Premium Board.

You need to trust fundamentals to hold a stock for a big profit, because there will always be pressure to make you take a small profit. It's a natural human instinct. Look what Jesse Livermore had to say on the subject, in Reminiscences of a Stock Operator:

«The speculator's chief enemies are always boring from within. It is inseparable from human nature to hope and to fear. In speculation when the market goes against you you hope that every day will be the last day - and you lose more than you should had you not listened to hope - to the same ally that is so potent a success-bringer to empire builders and pioneers, big and little. And when the market goes your way you become fearful that the next day will take your profit, and you get out - too soon. Fear keeps you from making as much money as you ought to. The successful trader has to fight these two deep-seated instincts. He has to reverse what you might call his natural impulses. Instead of hoping he must fear; instead of fearing he must hope. He must fear that his loss may develop into a much bigger loss, and hope that his profit may become a big profit. It is absolutely wrong to gamble in stocks the way the average man does.»

David. What is going on with CPNE.OB today?? I didn't see any bad news out so I'm thinking maybe just weekend profit taking. I am going continue holding even though I am back to near break even. No guts NO GLORY!!!!

QuoteDavid. What is going on with CPNE.OB today?? I didn't see any bad news out so I'm thinking maybe just weekend profit taking. I am going continue holding even though I am back to near break even. No guts NO GLORY!!!!

The stock was up 72% over the previous 8 sessions (not counting today), so some profit taking and consolidation must be considered as "normal market action".

You go out there and pick any chart you like, anyone, of a stock that rose 20 fold and you'll see that this type of days and periods ALWAYS happens in EVERY stock.

Unfortunately no stock rises in a straight line. It is hard for a not so experienced trader to hold through the ups and downs for as long as the trend is bullish. But only when he grasps this skill will he be able to make good money trading stocks.

Just sit tight and hold CPNE.OB is what experience tells me to do.

I picked up more shares at 2.97. These drops are huge buying opportunities, not selling ones. Keep them hands strong on your stocks and you will be rewarded in the long term. I love this stock!

I picked some more up at 2.79...after it hit the 9ema. ;D

Quote from: kslifka on February 09, 2007, 04:08:43 PM
I picked some more up at 2.79...after it hit the 9ema. ;D

I wasn't as lucky as you but it should still be good for the long term. I wouldn't think entry point is as critical at this time versus let's say 1 month from now where is could be much more of an issue.

I just picked up 3k more shares today (incrementally) at 2.87 which makes my overall price on 5600 2.95 per. I am a slave to the daily updates now and have much faith in our fearless leader David!

Thanks Dave. I don't see me being shaken out of this one any time soon because this is the first stock that I have been excited about in a long while.  Over the last 2 years I have been investing in small caps and have done well for myself but my biggest problem has always been selling to soon!!! I bought people support PSPT AT 8.60 and then sold at close to 11.00. I bought COGO at 6.04 and sold it at 8.50. There are others but I won't go on. The last time I looked at these stocks COGO was near 18 dollars per share and PSPT is near 23.00 dollars per share. I knew these were good stocks but for some reason I felt pressured into selling them for a quick profit.   Thats where I think this board and service is going to help me out the most. You seem to have a level head and seem to be very confident in your abilities as a stock picker. Thanks for the encouragement and Have a great weekend every one!!!!!

Thanks for your kind words jmccar2 and tireslinger :)

CPNE.OB has a very profitable business model. They delivered 6 cents EPS in Q3 and I expect something like $0.09 - $0.10 EPS for the 4th quarter. When that number comes out everybody will make a simple "multiply by 4 quarters" calculus and get to a full year EPS number of $0.4.

That should be enough to propel the stock to something between $8 and $12, depending on the earnings multiple investors decide to attach the company.

Consumers are being attracted by the company's service. It gives them the possibility (not the warranty, but the possibility) of making an e-commerce business with little starting capital. Consumers can subscribe the service just to add a little income and excitement to their boring jobs.

Everybody that I talk to about this investment, doesn't get all that excited about buying shares (because they don't invest in the stock market), but they all get very interested in the company's service's. My wife, her friends, my friends, they all think the idea of www.onlinesupplier.com is so cool.

Of course, if they subscribe they will soon find out that building an e-commerce business isn't all that easy, but in the meantime they already left $50 a month with CPNE.OB, which collects it with a 40% net profit margin. The more people that know the business the more will subscribe, that's why the company is recently experiencing an increase in growth rates.

There will be ups and downs along the way, but fundamentals tell me this stock can be worth between $8-$12 in Q2 2007 and for as long as I believe that, I'll hold !

If I sell I'll lose my position in a great stock that was very hard to find. Then, where would I be? Lost in the market place, doing the wrong thing without any motive besides my own fear. Fear is no motive to sell a stock.

I'll keep on holding CPNE.OB and will update this analysis everyday (as I do with all other holdings of the Main Portfolio).

CPNE trading in a nice tight channel, with the 10ema acting as support on the downside:

Thanks for the chart Tokyopua, yes, the 10 days exponential moving average is providing support to CPNE.OB, which means it is still short term bullish.

Of course, you all know about my long term prospects for this stock already.

Today let's focus our attention not on www.onlinesupplier.com, but on www.investinginsuccess.com, another of the company's websites.

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=33293;image)

I think it is cool and another subscriber source to the Consumer Loyalty Group.

I see $0.4 EPS in full fiscal 2007 and that probably means a $8 - $12 a share. I'll continue holding CPNE.OB with strong hands.

Institutional Investors Purchase 4.8 Million Shares of Common Stock From a Major Shareholder and Members of Managemen

http://biz.yahoo.com/prnews/070213/latu132.html?.v=42

Hey David,
What do you make of this?  Thanks, Ray

Quote from: dmdray69 on February 13, 2007, 08:13:30 PM
Institutional Investors Purchase 4.8 Million Shares of Common Stock From a Major Shareholder and Members of Managemen

http://biz.yahoo.com/prnews/070213/latu132.html?.v=42

Hey David,
What do you make of this?  Thanks, Ray

I could be wrong about this, but it seems like this is not dillution, just major shareholders and management selling some of their own shares.  If so, its positive for the stock as they mention in the article in that it shows institutional interest in the stock.  And it probably motivates management to work harder so that their next big sale of shares is worth even more  ;)

Quote from: tokyopua on February 13, 2007, 08:23:10 PM

Quote from: dmdray69 on February 13, 2007, 08:13:30 PM
Institutional Investors Purchase 4.8 Million Shares of Common Stock From a Major Shareholder and Members of Managemen

http://biz.yahoo.com/prnews/070213/latu132.html?.v=42

Hey David,
What do you make of this?  Thanks, Ray

I could be wrong about this, but it seems like this is not dillution, just major shareholders and management selling some of their own shares.  If so, its positive for the stock as they mention in the article in that it shows institutional interest in the stock.  And it probably motivates management to work harder so that their next big sale of shares is worth even more  ;)

I would agree that this is positive on two fronts.

First the transfer of inside shares sends a signal to both CPNE management and to external investors that the management is now focused on improving the value proposition by creating credible sustainable business value. The investment community is looking for quarter on quarter, year on profitability. Looks like  CPNE is stepping up to take the challenge. The cash from the sale will be quite useful as well.

Second, the barrier is now broken - institutional investment exists and the taboo of being "the first" is gone.  Others can rationalize joining by pointing to the first.

This sets things up nicely for the upcoming conference. Smart!

Quote from: dmdray69 on February 13, 2007, 08:13:30 PM
Institutional Investors Purchase 4.8 Million Shares of Common Stock From a Major Shareholder and Members of Managemen

http://biz.yahoo.com/prnews/070213/latu132.html?.v=42

Hey David,
What do you make of this?  Thanks, Ray

I wish I was wrong. But I don't like the price ($1.9) they are getting ...

Quote from: tokyopua on February 13, 2007, 08:23:10 PM

Quote from: dmdray69 on February 13, 2007, 08:13:30 PM
Institutional Investors Purchase 4.8 Million Shares of Common Stock From a Major Shareholder and Members of Managemen

http://biz.yahoo.com/prnews/070213/latu132.html?.v=42

Hey David,
What do you make of this?  Thanks, Ray

I could be wrong about this, but it seems like this is not dillution, just major shareholders and management selling some of their own shares.  If so, its positive for the stock as they mention in the article in that it shows institutional interest in the stock.  And it probably motivates management to work harder so that their next big sale of shares is worth even more  ;)

I may be wrong but this does look like dilution although not on a big scale.  It was stated in the press release that unregistered shares were being sold but that they would be registered.  Doesn't that add the 4.8 million shares being transferred to the total number of outstanding shares?  So, one question is why individual shareholders are holding unregistered shares - would these be in the form of warrants or stock options that must be excercised to be sold?

It is interesting that the sellers are taking such a huge discount at $1.90 versus being able to sell at the current market value for the shares.  I can't imagine them taking such a loss on their stock value unless they believed something good would come from it.  But I am also interested in knowing what the restrictions are for the institutional investors in regards to selling the purchased shares.  It also wouldn't make sense for the shares to be transferred to the institution only to have them sell and reap the profit.

OK, looking into this more, OPBL did basically the same thing with shareholders selling 19% stake to NYMEX with options to increase their holdings if they desire. 

Optionable Announces NYMEX Holdings to Purchase 19 Percent of Outstanding Shares of the Company (http://biz.yahoo.com/prnews/070122/lam091.html?.v=71)


The stock gapped up huge the next day and has continued to run ever since.  Looking for more info....

Worst case lets say this equals dillution, it would still not be too bad per the following math:

Total shares outstanding:  47.3 M
New Shares: 4.8 M
Net total shares outstanding:  52.1

New Price per share = (47.3*3.12+4.8*1.9)/(52.1) = 3.01

Again, that is assuming this were dillution.  I guess its not impossible given that the company has a current ratio less than 1. 

But I still dont think it is, its just that these shares were not registered, which means that the sellers did not register them with the SEC and record their name and address yada yada...

Since the holders are insiders anyway, they probably had these shares from much lower so they probably wouldnt complain too much.  Plus there is the aspect that selling that many shares on the open market might not be that easy.  Further, it could be the case that the deal had been in place from before the price runup, etc.

Quote from: tokyopua on February 13, 2007, 10:07:59 PM
Worst case lets say this equals dillution, it would still not be too bad per the following math:

Total shares outstanding:  47.3 M
New Shares: 4.8 M
Net total shares outstanding:  52.1

New Price per share = (47.3*3.12+4.8*1.9)/(52.1) = 3.01

Again, that is assuming this were dillution.  I guess its not impossible given that the company has a current ratio less than 1. 

But I still dont think it is, its just that these shares were not registered, which means that the sellers did not register them with the SEC and record their name and address yada yada...

Since the holders are insiders anyway, they probably had these shares from much lower so they probably wouldnt complain too much.  Plus there is the aspect that selling that many shares on the open market might not be that easy.  Further, it could be the case that the deal had been in place from before the price runup, etc.

Actually, I think you are correct in that this isn't dilution.  This isn't a private placement, it is insiders selling to these guys so the private placement dilution isn't happening.  And the fact that they are selling at a 10% discount to the 20 day close means that this was in the works for a while and isn't some spur of the moment deal.

The fundamentals tell the story of a bright future for CPNE.  And if the big boys are willing to buy $9.2 million worth of stock and the insiders are willing to let it go at such a discount, well, that can't be so bad either. ;)

Quote from: tokyopua on February 13, 2007, 10:07:59 PM
But I still dont think it is, its just that these shares were not registered, which means that the sellers did not register them with the SEC and record their name and address yada yada...

Unregistered shares are not included in basic or diluted earning per share calculations.  This is effectively a 10% increase in the number of outstanding shares, and therefore, dilution.

I'm also not too sure about your new value of $3.01.  The price at which the shares were sold, $1.90, doesn't matter (I don't think).  What it boils down to is that each share is now worth 10% less than it was before...so that would be (3.12 - .1*3.12 =) $2.81.

Using David's numbers from the first page of the thread with the new share count, I get a forward annual EPS estimate of .3515, which even at today's close, is a very modest P/E of 8.9.  I like.

But, as basonista indicated, the future looks bright for Commerce Planet...and that is what is going to direct the share price - not adding a few shares.

We'll see what Dave has to say about it, but I don't think he'll be that concerned.  I'm not.   8)  8) ( <-- me and Dave)

From the limited amount that I've learned this week about stocks (still felt confident enough to pour about 30k into CPNE :o), I agree with dnickers that these unregistered shares perhaps weren't included in David's Market Cap calculations and then future share evaluations....

However, here's why they're selling cheap:

"Securities law substantially restricts the sale of unregistered shares on the open market; although as I understand it, unregistered stock can be sold in small amounts under the so-called leakage rule. In addition, it may be possible to sell the shares outside the confines of the exchange on which the buyer's shares trade (i.e., a private sale)."

Hope this adds some value-- Don't be afraid to tell me if I'm out of my league here :)

Also, Tokyopua: I would worst case senerio average in the roughly "30% insider owned shares" as unregistered that Hill referred to when speaking to a 3SOF senior member to come up with a new share valuation...

Well here is my take.

Dilution is not an issue in this transaction. The shares in question were already issued and outstanding.

The main concern must be why insiders decide to sell 4.8 million shares ahead of a supposedly blow out quarter at $1.23 discount to the market price.

Even though I have to admit that the transaction sets off my alarm bells it is important to remember:

• The deal has most likely been in the making for months while the stock were trading at a much lower level.
• A discount is natural as the selling shareholders would not have been able to off load this amount of shares in the open market without severely depressing the share price.

Lets see how the market reacts to the news. I don't think we will gap up but on the other hand an overreaction to the news could represent a good buying opportunity  :)

Good morning :)

The news is:

• Institutional Investors Purchase 4.8 Million Shares of Common Stock From a Major Shareholder and Members of Management (http://biz.yahoo.com/prnews/070213/latu132.html?.v=42)
PR Newswire (Tue 6:19pm)

I think some of you are making a perfectly natural confusion between issued and outstanding and registered or unregistered shares.

Registered or unregistered are shares issued and outstanding.

The difference between being registered or unregistered only relates to being available to be sold in the public market or not.

In CPNE.OB's case, the company's founders and what seems to be a "previous IPO" investor are selling 4.8 million of their restricted shares. This doesn't increase the number of shares issued and outstanding, they were already included (it doesn't change the fully diluted EPS calculus - although there's misleading information about this on the internet).

As relative to the price of the transaction, $1.9 per share. I think your explanation that the deal has been in the making for some time is probably accurate, and this is the normal practice in this type of deal (actually, it usually is a 15% discount over the last 20 days average bid price, not 10%).

Insiders couldn't sell those shares in the open market, not in bulk, as you can read here: Rule 144: Selling Restricted and Control Securities (http://www.sec.gov/investor/pubs/rule144.htm). And probably they were not interested in doing so, because, as Michael says, that would depress the share price. This way they're opening the door to institutional ownership, which was non existent.

The press release says the company will register these shares, so the new investor's may sell, but only after the registration form is filed with the SEC.

I think basonista's mention to OPBL.OB's case was opportune, because OPBL.OB's founders also sold 19% of the company to Nymex at $2.69, on the day the stock closed at $4.34. The next day the stock opened at $5.55.

I guess this won't be the case here because it was obvious that Nymex is a long term investor in OPBL.OB and we don't know if that's the case with CPNE's institutional investor. (by the way, finally understood OPBL.OB)

CPNE's management has been crying that the market doesn't accurately value the company, particularly in comparison to companies with similar financial metrics. That is also, at least partially, the basis for my investment in CPNE: the company is undervalued.

And it is undervalued partially because it had no institutional ownership, only institutions can take a share price a lot higher on a sustainable basis.

So I believe this was a correct step, that will take the share price higher over time. The founders, especially the CEO, will be a lot richer with 8 million shares valued at $12 than with 10 million shares valued at $4.

I'll keep holding CPNE.OB.

Continuation of yesterday's news?

Commerce Planet Announces the Joint Engagement of Roth Capital Partners and Craig-Hallum Capital Group to Service Their Investment Banking Needs

Last update: 2/14/2007 7:00:00 AMGOLETA, Calif., Feb 14, 2007 /PRNewswire-FirstCall via COMTEX/ -- Commerce Planet, Inc. (CPNE) announced today they engaged the investment banking firms of Roth Capital Partners () and Craig-Hallum Capital Group () to assist with their 2007 strategic initiatives. After months of due diligence regarding various investment banking firms, Commerce Planet chose to engage both firms to take advantage of their differing areas of strength. Both firms are established in the investment banking community and well connected to institutional investors and fund managers. Roth Capital Partners, located in Newport Beach, California, has a distinguished record of working with microcap companies similarly situated to Commerce Planet. Craig-Hallum Capital Group, located in Minneapolis, will provide an East Coast reach to capital markets and is well known for its research and fundamentally sound analysis. The firms will assist with the assessment of various financing objectives, which may include mergers, acquisitions and private sale transactions. Michael Hill, CEO, stated, "we believe our engagement of both Roth and Craig-Hallum provides us with the best of all scenarios. Both firms are extremely well-regarded and have deep reaches into the public and private investment community. In addition, each understands and has participated in several online media-related transactions. They are each highly familiar with and have worked alongside some of the largest media companies in our industry. We think these firms will provide us with valuable access to capital, extended industry relationships and sound financial advice."

About Roth Capital Partners () Since 1984 Roth Capital Partners, LLC ("ROTH") has been a leader and innovator in the small and micro cap markets. Roth's exclusive focus has been, is, and will continue to be providing the full spectrum of investment banking services, including raising capital, research coverage, creating liquidity, trading and market making, merger and acquisition advisory services, sales support, and investor conferences, to our customers. Our experience and capabilities in raising capital for public companies are the hallmarks of the Firm. Over the last ten years, we raised over $8.7 billion for small and micro cap public companies and completed over 123 merger, acquisition and advisory assignments. In 2005, Roth raised $1.7 billion for our clients. Also, the firm has been a leading placement agent over the last two years for the number of PIPE transactions, raising over a billion dollars.

About Craig-Hallum () Craig-Hallum is an institutional research, trading and investment banking boutique, owned and operated by experienced professionals who share a common belief that this business is all about performance.
    *  We need to help our institutional clients make money.    *  We need to provide our investment banking clients access to capital       and strategic advice in order to help them achieve their growth       objectives.Our approach to the business is different from most. At Craig-Hallum, our research analysts are driven to find misunderstood, small-to-mid cap public companies that represent outstanding investment opportunities for our institutional clients. By introducing company managements to our clients, we institutionalize the ownership of these stocks and provide liquidity in trading the stocks within our coverage universe. Our investment banking activities are focused within a specific range of capabilities where we have a history of getting the job done.

This seems like a positive to me also.  Just two weeks ago $1.90 was a fair price.  Do we know if the sellers received any options?

CPNE is selling off big time :(. David is right though got to ignore the short term noise and have strong hands for the long term.

Any comment on this posting?

http://www.investorshub.com/boards/read_msg.asp?message_id=17045100

Thanks.

I just barely missed getting an order filled at 2.70  :'(

You can still add at 2.75-2.85. I have been just averaging up on CPNE my last buy was at 2.84 but that is slightly under atm. My average cost im in CPNE at is 2.39.

humm... I have a feeling that CPNE is going to close green by the end of the day.

talk about volatility...

After seeing todays action and the previous down days action. Im convinced this company is going much higher, someone is buying at discount every chance they got. This seems like one of those stocks to buy at every pullback. Im going to hold strong we may be trading north of 4.00 in the very near future.

Man that is one hell of a bullish hammer on the chart! CPNE is almost trading in green wow.  ;D

i love you guys  :'( lol

I love this stock so much, I bought more at 2.92 to try and catch the ride back up to green.  8)

This sucker moves fast and makes me wish I would have bought when ti was lower yet this morning. dang it all to heck

Quote from: dnickers on February 13, 2007, 10:54:14 PM

Quote from: tokyopua on February 13, 2007, 10:07:59 PM
But I still dont think it is, its just that these shares were not registered, which means that the sellers did not register them with the SEC and record their name and address yada yada...

Unregistered shares are not included in basic or diluted earning per share calculations.  This is effectively a 10% increase in the number of outstanding shares, and therefore, dilution.

I'm also not too sure about your new value of $3.01.  The price at which the shares were sold, $1.90, doesn't matter (I don't think).  What it boils down to is that each share is now worth 10% less than it was before...so that would be (3.12 - .1*3.12 =) $2.81.

Using David's numbers from the first page of the thread with the new share count, I get a forward annual EPS estimate of .3515, which even at today's close, is a very modest P/E of 8.9.  I like.

But, as basonista indicated, the future looks bright for Commerce Planet...and that is what is going to direct the share price - not adding a few shares.

We'll see what Dave has to say about it, but I don't think he'll be that concerned.  I'm not.   8)  8) ( <-- me and Dave)

Thanks for clearing that up David.  My response regarding dilution was based on a Yahoo! Answer: http://smallbusiness.yahoo.com/r-answers-a-20061003074805AAIwvOj-k-diluted+share

Just goes to show you can't believe everything you read!  ::)

 :D

Thanks for your analysis, David. I was fortunate enough to catch the dip this morning and buy additional shares at $2.71 ( one of the few times in my stock trading life that's happened!). I wouldn't have had the nerve to jump without your thoughtful analysis.

Quote from: Dory99 on February 14, 2007, 10:49:47 AM
:D

Thanks for your analysis, David. I was fortunate enough to catch the dip this morning and buy additional shares at $2.71 ( one of the few times in my stock trading life that's happened!). I wouldn't have had the nerve to jump without your thoughtful analysis.

Cool :)

Now that everybody has its shares it wouldn't do any harm to copy paste my post to www.ragingbull.com or www.investorshub.com. Of course, it won't move the stock, since it is already trading $1.5 M plus, but it might help others see the "truth" ;D

(please refer the source - thanks)

Nobody did that copy paste that's why the stock didn't close in the green, lol, just kidding ;D

This is the Main Portfolio (http://www.3stocksonfire.org/3stocksonfire.php), and only long term investments are allowed here (it doesn't mean I won't sell a stock 1 day after I bought it, due to an unexpected event).

I know some people are concerned about CPNE.OB being a fraud to consumers, that is, they sell a service, but that service is not what it is supposed to be.

Well, I could say the same about many, many businesses. For example, I think Cramer's "$Action Alert Plus", or, another example, www.peterleeds.com are also, I wouldn't say fraudulent, but they can't keep up with consumer's expectations. Why? Well, Cramer has a portfolio with 100 or so stocks and has lagged the S&P 500 for years. Peter Leeds has 15,000 subscribers eager to buy the penny stocks he recommends. Can you tell me how to put 15,000 people into a penny stock? And, of course, when things turn south, as they usually do ... well, here are two new picks for you ;D

That doesn't change the fact that both services have thousands of subscribers and continue to attract thousands more. On the contrary, 3 Stocks, such an honest and I believe closely matching investor's reasonable expectations, only has 140 subscribers (but I love them all :-*)

As an investment I would recommend you to buy www.thestreet.com shares or a stake in Peter Leeds business, not in 3 Stocks, which is a lousy business.

The quality of a business in terms of revenues and profits doesn't always mean a great quality of service. And this directs me to Commerce Planet, specifically www.onlinesupplier.com.

Of course the majority of consumers get disappointed by the company's service, because their expectations are totally unrealistic. They expect to launch and operate a successful e-commerce business paying just $50 a month. That's ridiculous (well, some of them might get some extra money to their regular income, but none will grow rich).

But that doesn't change the fact that the company is attracting many thousands of new subscribers as you can read on the recent press releases. And that translates into revenues and profits, and that's all that matters to investors.

One could also say, for example, that Phillip Morris sells a product that is bad for health, tastes awfully, so over time the company would just drop dead, because consumers are smart enough. They aren't (let me just light up a cigarette while I write this ::)).

CPNE.OB sells the dream of financial independence. Most people won't make any money, but they'll keep trying and paying the subscription fee.

My view is CPNE.OB is about to earn $0.40 per share in 2007 and that should put the stock trading between $8 and $12 during the year. I'm not going to be shaken out of my conviction and analysis because the stock goes down 10% in one day.

In fact, as the stock already rose 14 fold over the past 12 months, it fell, from the top to bottom: 26% in April 2006, 39% in May, 31% in June, 28% in just one day in August, 18% in September, 46% in October and 28% in November 2006.

I need to be prepared for severe drawdowns if I want to be able to catch a big swing. They are part of the process. If one got scared in any of the previous pretty nasty drawdowns he would have missed a 1,500% advance. End of story.

I still see several bags of profit for CPNE.OB, but I don't know how many over the long term. What I know is that I see them and I'll have the patience to wait for them for as long as my fundamental study is not shaken by incoming fundamental information.

News

NatureWell Partners With Commerce Planet's Legacy Media to Launch Internet Consumer Marketing Campaign

http://biz.yahoo.com/prnews/070215/lath029.html?.v=91

Quote from: boatguy on February 15, 2007, 07:25:35 AM
News

NatureWell Partners With Commerce Planet's Legacy Media to Launch Internet Consumer Marketing Campaign

http://biz.yahoo.com/prnews/070215/lath029.html?.v=91

CPNE.OB would have made better if it kept that news on the quiet. Who wants to know about a partnership with a microscopic company? People will compare the two market caps and start wondering ... anyway, it doesn't change anything to what I wrote previously, it is a non event to CPNE.OB - but good news for NAWL.OB.

(thanks for posting :))

Looks like they are involved (invested in?) stock tout sites-

http://www.tradernewsalert.com

Whois search shows other tout sites from same mailer-

http://www.spamnation.info/tools/Domain.php?domain=unknownbulker005

I guess this is all part of internet marketing and they are buying domains

Quote from: David Randolph on February 15, 2007, 07:56:12 AM

Quote from: boatguy on February 15, 2007, 07:25:35 AM
News

NatureWell Partners With Commerce Planet's Legacy Media to Launch Internet Consumer Marketing Campaign

http://biz.yahoo.com/prnews/070215/lath029.html?.v=91

CPNE.OB would have made better if it kept that news on the quiet. Who wants to know about a partnership with a microscopic company? People will compare the two market caps and start wondering ... anyway, it doesn't change anything to what I wrote previously, it is a non event to CPNE.OB - but good news for NAWL.OB.

(thanks for posting :))

HI David. Great Service, this is my first post !! I am a big holder of CPNE. Just to clarify today's PR, it was actually put out by the OTHER company, Naturewell, not by CPNE itself. It just had a link to the Legacy Media operation and mentioned it was a subsidiary of CPNE. So it was put out by Naturewell, but if it gets some new folks aware of CPNE and its farflung operations, so much the better.

Actually, my question for you had to do with the prior PRess Release, the one where CPNE announced it had engaged Roth Capital and Craig-Hallum Group to do some undisclosed investment banking and financial svcs work for them. I did not see you give your take on THIS particular bit of info which hit just before the open yest.

Clearly they are looking for increased research coverage and entre into the money managers' boardrooms. But is there anything to read into this regarding possible deals, possible financings, the aggressiveness of CPNE management, etc? And why would they need TWO firms to do this, unless each is going to specialize in some area that the other will not cover. Coming on the heels (12 hrs later) of the PR on the sales of almost 5 million shares to unnamed institutions, it almost seemed these two PRs are linked and need to be read together to get a truer picture.

Thanks for your thoughts.

From Raging Bull:

The Party Takes A Turn For the Worst- The Planet Descends

http://www.otcjournal.com/archive/listserv/20070215-1.html


The stock and the company that could do no wrong has finally given investors something to think about and come back to earth a little. If you are concerned about the news that has come out of Commerce Planet over the past couple of days, you might want to step back and think about what it all really means.

Here\'s what happened. On Tuesday after the market closed, CPNE announced it had entered into two separate but similar agreements: Agreement 1 was the sale of 1.8 million unregistered shares from existing shareholders to institutional investors at $1.90. Agreement 2 stated the company would sell 3 million newly issued restricted shares to those same institutional investors- also at $1.90.

In typical knee jerk reaction fashion, the market sold off on the news. The stock sold off to $2.70 early, rebounded to $3, and closed at $2.81 as sellers processed this new information.

Now that a day has gone by, let\'s take a step back and think about what happened. As we all know, one of the problematic issues with this stock has been the supply coming from early financiers who have virtually a zero cost basis. If some of their stock was included in the 1.8 million shares sold to the institutions, isn\'t it better for the market to have those 1.8 million shares out there with a cost of $1.90, instead of a zero cost basis? It\'s 1.8 million shares that now has a higher cost basis.

Secondly, let\'s look at the 3 million newly issued shares. If you have been around microcap fund managers and know how they think, the deal actually makes sense. I am going to take the liberty of guessing the funds involved in this financing have been buying the stock in the open market. They are already familiar with the company, and have been having difficulty accumulating the stock without moving the market up signficantly. Here\'s what they want- a position that is meaningful to their fund.

What do they do after they have accumulated their position? Go out and tell all their buddies. It will be part of their mission to make sure this stock trades more efficiently in the future. And, if they have been buying in the open market, the average cost is bound to be well above $1.90.

Also- here\'s something else the individual investor probably doesn\'t think about. If a fund engages in a non-public transaction to purchase shares, they can enter into a non-disclosure agreement with the company, and obtain non public information without violating Reg D for the purpose of evaluating the investment.



The funds are writing the check. They have looked at the company, and they can get information we can\'t. They believe they will make a lot of money from $1.90- the total investment is over $9 million. Do you think they plan to turn around and hit the market with that size tomorrow?



There was only one surprising item disclosed in the press release on the funding. CPNE stated the pricing was based on a 10% discount to the average closing bid price of the stock over the past 20 trading days. It comes out at $1.90- seems like it should be higher. That would make the 20 day average $2.09- time flies when you\'re having fun.

If this stock is going to trade to efficient levels relative to their earnings, institutions have to get involved. Several have now been given a nice incentive to spread the word. I don\'t believe CPNE needed the money- I believe they took it in return for institutional participation.

I\'m going to keep the technical side of this very simple. The stock bounced off the 38.2% retracement easily today, but is still lurking in that neighborhood. I would call it a strong buy at that level.

If the stock sells off further, it is a pound the table screaming buy at $2.42 as long as that level holds. $2.20 would be your SSL. Next Tuesday, the 22nd- CPNE will announce Q4 guidance- we\'ll see what we have then.


(Voluntary Disclosure: Position- Long; ST Rating- Strong Buy)

Goldeneyes:
The OTC Journal guys who wrote that piece you mentioned made a bad mistake thinking the 3 million shares were to be issued by the company. They were sold by insiders and management and are not new shares.

They later on admitted their gaffe on their website, cited again on RB:

2/15/2007
Planet Correction- Today's Edition Inaccurate
Filed under: CPNE— OTCJournal Editor @ 7:41 am

In today's edition, I inadvertently published some incorrect information. I mistakenly read the press release to believe the company had issued 3 million new shares to institutional investors, when in fact the fund managers bought those shares from existing shareholders.

As I observed, the company didn't actually need the money. Therefore, the sale of those shares is actually better as their is no dillution. Net result is the same- the institutions have their position.

As the company grows, the cost basis for early shareholders will continue to go up. That is a logical progression.

While the facts were wrong, the interpretation was essentially unchanged. These events are a mild negative for the stock short term, positive longer term.

Comments and questions are welcome

I think we are already seeing the "mild short term negative" yesterday and today (and possibly tomorrow?).... but the positive longer term is, I hope, not too far ahead (starting perhaps on the 22nd?)

Thanks for the correction...I didn't knew it.

Regards

Hello everyone.
I have been running some numbers on CPNE.OB over the last few days and have decided to keep buying on any dips. This is the conclusion that I come to using the Ben Graham method. 9+(30*.7)*.28=8.40 per share. The formula is 9+(G*P)*FE. Where G=Growth rate, P=Percentage chance you think company will make earnings estimate, and FE= forward Earnings. The price of 8.40 is very conservative as you can see because I am only using .07 cents per quarter, and only figuring in a 70% chance of making those earnings. This gives us all a huge margin of error. Plenty of upside and the down side is limited. I love it!!     
The value I come up with using my spreadsheet is as follows. 4.31 per share based on earnings alone. 5.67 if I add in profitability using current ROIC, and 8.30 per share if I add in growth of 30%.  The first price is usually like a worse case scenario, the second price is usually what I use to make investment decisions and the third number is usually a fair valuation with safety built in.   

I would not mind posting my spreadsheet somewhere on the web so that others could use it and profit from it but I don't know how to do that. If anyone is interested in me doing so please let me know where to send it. It has the Ben Graham method on there as well as the Earnings valuation, ROIC valuation, and Growth valuation. Thanks. Tireslinger.  :)

Quote from: tireslinger on February 16, 2007, 09:20:11 AM
I would not mind posting my spreadsheet somewhere on the web so that others could use it and profit from it but I don't know how to do that. If anyone is interested in me doing so please let me know where to send it. It has the Ben Graham method on there as well as the Earnings valuation, ROIC valuation, and Growth valuation. Thanks. Tireslinger.  :)

under additional options...
please attach your sheet:
Allowed file types: txt, doc, pdf, jpg, gif, mpg, png, zip
Maximum attachment size allowed: 1500 KB, per post: 8

la onda. I didn't see .xls files on the list so maybe we will have to work it another way. Excel Spreadsheets use this extension. Thanks for your help though.

Quote from: tireslinger on February 16, 2007, 09:47:06 AM
la onda. I didn't see .xls files on the list so maybe we will have to work it another way. Excel Spreadsheets use this extension. Thanks for your help though.

You can zip the excel file and post it has a zip file.  Then anybody can unzip it a view it in excel.

Thanks Eggman. I had to go and download a zip utility. but here it is.

Hi folks,

This editor at the otcjournal who seems to have the longest and most correct track record on calling CPNE early had a response to a reader question that seemed to indicate a complete exit at $4-5...Any thoughts on this?

"Editor: I have heard estimates from fund managers who use valuation metrics that this stock could be $10. However, personally I am in the camp that $4 to $5 is a reasonable target- perhaps earlier than later this year. AT $4 to $5 I would offload our whole position, even though the stock might still go to $10. I believe we will see that because I have a high level of confidence in Q4 '06 and Q1 '07. I'm not sure where we go beyond there."

Thanks!

 ;D

Tireslingers spreadsheet

I promised sometimes ago a more comprehensive Business Model for CPNE. So here we go!

Lets first go through the assumptions:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=33482;image)

Increase in gross connections
This is the monthly percentage increase in gross connections from February 2007. 10% is significantly lower than the historical increase but we must assume that the company cannot sustain these growth rates for ever

Subscriber average lifetime
This is based on their latest Q10:

QuoteWe expense the media costs of advertising the first time the advertising takes place, except for direct-response advertising that is contracted with our advertising partners on a cost per customer acquired basis, which is capitalized and amortized over its expected period of future benefits. The capitalized costs of the advertising are amortized over the three-month period following the receipt of a trial order for our products and services.

I assume this means that the average lifetime of a new subscriber is 3 months. As this service is quite new the company might not have enough historical information to assess the lifetime. 3 months is therefore probably too conservative.

I am using the following Churn profile for new subscribers:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=33483;image)

Gross margin
This is based on the Gross margin for the first 9-month of 2006. No changes are foreseen.

Monthly non-subscription revenue
This is based on the revenue statement for the first 9-month of 2006. No changes are foreseen. This might be a bit conservative as their other businesses seems to do quite well.

Monthly subscription
I have set this lower than the standard subscription fee of 49.95 based on Eggman's talk with Mr. Michael Hill:

Quote from: eggman11 on February 08, 2007, 01:02:02 PM
I talked to the the Company (CEO Michael Hill)  and got some info........

The average subscriber subscribes to 1.5 different plans.

My Assumption is that the second subscription is cheaper than the first.

Monthly fixed cost
Based on the last 10Q with a monthly increase of 2%

Outstanding shares
As of September 2006

The assumptions is obviously critical for the forecasted P&L so please feel free to comment or suggest other assumptions. To the extent I have time I would be happy to revise the calculations with other assumptions  :)

So let Excel do its magic   ::)

Based on the assumptions in the previous post the subscriber development looks like this:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=33490;image)

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=33486;image)

Churn is normally defined as cancelled subscriptions over a periode divided with the average number of subscribers over the same period. Using this definition the monthly churn starts at around 30% and stabilize at 45% with the defined churn profile.

The long term profitability can therefore be condensed to two factors:

• The company's ability to reduce churn
• The company's ability to replace churned customers

just awesome Mike! applaud
Oliver

Excellent Michael!  Applause!

Thanks guys  ;D

After having analyzed the Subscriber development it is time to look at the profitability:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=33515;image)

I stop at EBITDA as Interest, Tax and Depreciations have historically been negligible.

Interest
I expect this to continue to be close to Zero as the company basically is debt free

Tax
The Company had net operating loss carryforwards of approximately $6,157,276 for federal income tax purposes. I would therefore expect the company to pay tax from next quarter.

Depreciations
The company's fixed assets are negligible and we can therefore ignore depreciations.

Below is the EPS based on the forecasted EBITDA and the share count as of September 2006

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=33497;image)

As said above I expect the company to pay taxes from next quarter and this will obviously reduce the EPS.

I forecast full year 2007 EPS to 2.29 (funny enough approximately the price I paid for my stocks). Taxes will reduce this so EPS after taxes might be as "low" as 1.6.

David has said that he has never analyzed a stock with such attractive fundamentals. Neither have I   ::)

With EPS at 1.6 this stock should trade anywhere between 16 and 32.

Let me finish with one warning. There are a lot of assumptions in these calculations. I believe I have been reasonable conservative but any changes to the assumptions can significant change the conclusions (in both directions  >:D)

Yes, thank you very much for the calculations and spreadsheets Michael and Tireslinger...I'll definitely be holding CPNE through the $4-5 range  :-*!

Quote from: Michael on February 17, 2007, 09:15:52 AM


David has said that he has never analyzed a stock with such attractive fundamentals. Neither have I   ::)

Thanks for the awesome write up Michael, I have always respected your style and your analysis.   :)  Do you really like CPNE more than XING back when it was $8 per share? That seemed like such a sure thing with hardly any downside whereas CPNE doesn't quite give me as much confidence (although it is still my third largest holding behing XING and SYX)

Quote from: trexkerry on February 17, 2007, 01:26:37 PM
Thanks for the awesome write up Michael, I have always respected your style and your analysis.   :)  Do you really like CPNE more than XING back when it was $8 per share? That seemed like such a sure thing with hardly any downside whereas CPNE doesn't quite give me as much confidence (although it is still my third largest holding behing XING and SYX)

Thanks for the kind words and congrats with your holdings. You must have made a killing in the market lately  :)

What is that about XING at 8  ??? I think I recommended XING at 5.5  ;)

It is two very different picks though. The risk with XING at 5.5 was very low in my opinion. This was and is a company with a solid business and superior products.

CPNE's risk profile is much higher but so is the potential return. I don't think I suggested a 1000% increase in XING's share price in fact I sold it at 7 (to buy it back again later at 6.5   :D)

1000% increase might sound aggressive but if you had bought CPNE in March last year that would be the profit you would have had today and I think it has the potential to show a similar increase this year.

I am sure it will be a roller coaster ride with a lot of opportunities to sell high and buy low but this is a stock I want to own as long as they continue to show impressive gross connections.

Thanks Micheal. Great Job!!!!!

I do own CPNE and have full confidence in what David and Michael analysis is but the biggest thing that worries me is its .OB extension

Having said that I was worried about OPBL.OB when I let it go near 4. Only to find it smacking 100% in my face in little under two weeks.

Sometimes you have to stare the 'risk' devil in eyes to get that kind of returns.

Quote from: Michael on February 17, 2007, 09:15:52 AM
Thanks guys  ;D

After having analyzed the Subscriber development it is time to look at the profitability:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=33500;image)

I stop at EBITDA as Interest, Tax and Depreciations have historically been negligible.

Interest
I expect this to continue to be close to Zero as the company basically is debt free

Tax
The Company had net operating loss carryforwards of approximately $6,157,276 for federal income tax purposes. I would therefore expect the company to pay tax from next quarter.

Depreciations
The company’s fixed assets are negligible and we can therefore ignore depreciations.

Below is the EPS based on the forecasted EBITDA and the share count as of September 2006

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=33497;image)

As said above I expect the company to pay taxes from next quarter and this will obviously reduce the EPS.

I forecast full year 2007 EPS to 2.29 (funny enough approximately the price I paid for my stocks). Taxes will reduce this so EPS after taxes might be as "low" as 1.6.

David has said that he has never analyzed a stock with such attractive fundamentals. Neither have I   ::)

With EPS at 1.6 this stock should trade anywhere between 16 and 32.

Let me finish with one warning. There are a lot of assumptions in these calculations. I believe I have been reasonable conservative but any changes to the assumptions can significant change the conclusions (in both directions  >:D)

Hi I have a question about how you calculated your EPS estimates. For example, you have CPNE EBITDA at 17,000,000 in 4Q07, and EPS of .80 eps, but I get 17,000,000 divided by 43,000,000 shares and get $.40 eps. How did you end up with $.80 eps.

Thanks,

Egg

Quote from: eggman11 on February 17, 2007, 08:53:24 PM
Hi I have a question about how you calculated your EPS estimates. For example, you have CPNE EBITDA at 17,000,000 in 4Q07, and EPS of .80 eps, but I get 17,000,000 divided by 43,000,000 shares and get $.40 eps. How did you end up with $.80 eps.

Thanks,

Egg

That was a bloody good question - applauds!

The model calculates all figures on a monthly basis but due to the limited space at 3SOF I had to add the monthly figures to quarters. The Copy and paste went wrong in the P&L :-\

I have replaced the wrong table in the original post with the corrected table below.

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=33515;image)

I have also double-checked the rest of the formulas and I believe they are correct. You can see the monthly figures here  (http://www.3stocksonfire.org/trading/index.php?topic=1948.msg89056#msg89056)

Thanks for pointing that mistake out!!!

Michael: You have done a fantsatic job of modeling with CPNE. I dont want to be one of those guys who nitpicks at such an effort...

but I am confused by your Q4 06 numbers (the numbers mgt will "prerelease" at the conf Thurs.)

Your Q4 numbers show almost NO sequential growth at all vs the Q3 06. Imean they seem to be flat as a pancake.

Revs Q3 actual = $7,627.5
Revs Q4 Michael = $7,655.1

EBITDA Q3 actual   = $3,102.0
EBITDA Q4 Michael = $3,216.9

Then I see this MONSTER jump you are estimating in both revenues and EBITDA sequentially from the Q4 06 to the Q1 07 ....a jump from $7.6 mil to almost $21 million in revs coming off a FLAT sequential the qtr before... and I have to say, Stop the Parade for a moment !!!

Are you SURE that you are meaning to estimate totally FLAT results sequentially in the Q4 ( and why would mgt be so eager to preannounce FLAT results at an investor conference via webcast live to the world??)....

Thanks much for your input.

Quote from: webby67 on February 18, 2007, 04:58:26 PM
Michael: You have done a fantsatic job of modeling with CPNE. I dont want to be one of those guys who nitpicks at such an effort...

but I am confused by your Q4 06 numbers (the numbers mgt will "prerelease" at the conf Thurs.)

Your Q4 numbers show almost NO sequential growth at all vs the Q3 06. Imean they seem to be flat as a pancake.

Revs Q3 actual = $7,627.5
Revs Q4 Michael = $7,655.1

EBITDA Q3 actual   = $3,102.0
EBITDA Q4 Michael = $3,216.9

Then I see this MONSTER jump you are estimating in both revenues and EBITDA sequentially from the Q4 06 to the Q1 07 ....a jump from $7.6 mil to almost $21 million in revs coming off a FLAT sequential the qtr before... and I have to say, Stop the Parade for a moment !!!

Are you SURE that you are meaning to estimate totally FLAT results sequentially in the Q4 ( and why would mgt be so eager to preannounce FLAT results at an investor conference via webcast live to the world??)....

Thanks much for your input.

This is a simplified model and one of the things I have ignored is their existing customer database, which obviously is wrong as they had $6 million in membership revenue in Q3 06. Due to the high churn this mainly affects next quarter and not the longer term forecasts.

Next quarter is probably the quarter that most people are interested in so I have used the night to make some refinements to the model, which gives a better forecast of the earnings. The following changes has been introduced:

• I estimate that they had an average of 40.000 members in Q3 paying $49.95 per month. That would probably give us an opening base of 50.000 which I churn 50% of over the first 3 month of 2006.
• I increase the fixed cost with $650K (this is the cost of the new business they have build)
• I have introduced a 30% tax after the tax allowance has been used. (I continue to ignore interest and depreciation as they are negligible)
• I am using average diluted shares as of September 06 to calculate EPS (54.6 million shares)

So here are the new assumptions:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=33541;image)

And the new forecast:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=33542;image)

Using diluted share count and introducing tax reduces the EPS for 2007 to 1.4. That still gives us a forward PE of 2.07. As said before I think the PE should be between 10 and 20 so there is still plenty of room for this stock to conitnue to go up ;)

Thanks for your comments Webby. I think the revised model gives a more realistic picture of CPNE's business. But remember that this is only a simple model and the real earnings can be very different >:D

Please keep asking questions it can only make the model better  :)

Michael, you've taken fundamental analysis on CPNE.OB to a deeper level, thanks a lot :)

My estimates were made just by estimating revenue and EPS for the 4th quarter of 2006 and then extrapolating those numbers for the following 4 quarters, which obviously doesn't consider the exceptional growth the company has been experiencing and probably will continue to experience.

You went further and accurately designed a revenue model that considered and projected recent growth trends into the future. Your rating should rise 10 points ... done ;)

Just considering 2006 4th quarter you get to an EPS number similar to mine, which is $0.09. Making my very simplistic (and therefore probably wrong by being too conservative) estimate of $0.36 EPS for 2007, that number alone should put the stock instantly trading at, say, $5.4 (a 15 times conservatively expected 2007 EPS?).

On Thursday we'll know more details about Q4 (http://biz.yahoo.com/prnews/070212/lam057.html?.v=82).

I know about rudynostalgia's concerns on CPNE.OB, but I think he's wrong when considering CPNE.OB, as he says, a "classic bait and switch" scheme. The Terms of Membership (http://www.onlinesupplier.com/sign_up.php#) of www.onlinesupplier.com clearly (in bold) say the credit card will be billed by $49.95 on a monthly basis if the free trial is not canceled over the 14 days free trial period and everybody knows this is the usual business practice (of course, some consumers don't know and get surprised, write complaints and all that stuff, but they're a small minority).

I tried to subscribe the service just to test if they write "you'll be billed $49.95 if you don't cancel your free trial within 14 days", but I couldn't provide a valid ZIP and telephone number (because I don't live in the US).

If you have the time and the will, please do it yourself and then post the results here. You don't have to actually activate your free trial, just go through part of the process to see if they make that warning, at www.onlinesupplier.com.

Anyway, even if they don't do the warning in the free trial activation process, the costumer accepts the Terms of Membership (http://www.onlinesupplier.com/sign_up.php#) so, the contract is legal  and there's no way to make a credit card charge back (what do you think of this rudynostalgia?).

Michael and I do this a bit differently, but we both expect costumers not to last long. I consider a monthly churn rate of 50%. Let me explain this with a simple example:

(not considering new costumer additions)
- The company enrolled 91,729 subscribers in January 2007 (http://www.marketwatch.com/news/story/commerce-planets-consumer-loyalty-group/story.aspx?guid=%7BE4AA8C17%2D40D9%2D4DD4%2DA297%2D94C5E73B8BE8%7D&dist=TQP_Mod_pressN)
- I estimate 45,864 will pay just January, they won't pay February, and that leaves just the other 45,864
- Only 22,932 will pay March
- Only 11,466 will pay April

... and on, and on. The great thing is that new subscriptions more than compensate this very high churn rate, because the service and commercial model is extremely appealing. However, it puts a cloud on the very long term, say, two or three years from now, because, then, every possible costumer was already enrolled and gave up on the service. But 2007 looks extremely positive and I believe the CEO has his ways to get new profitable businesses for CPNE.OB.

This is the Main Portfolio (http://www.3stocksonfire.org/3stocksonfire.php) and Michael's calculus perfectly fit this thread. He talks about $16 - $32 a share during the course of 2007, and that is conservative (it means an earnings multiple between 10 and 20), given that his estimates are met.

I'll continue holding and comparing actual numbers with estimates. For as long as the company keeps anything close to trend growth I'll keep holding the stock in the Main Portfolio (http://www.3stocksonfire.org/3stocksonfire.php).

webby67 requested me to comment on the following news:

• Commerce Planet Announces the Joint Engagement of Roth Capital Partners and Craig-Hallum Capital Group to Service Their Investment Banking Needs (http://biz.yahoo.com/prnews/070214/law067.html?.v=86)
PR Newswire (Wed, Feb 14)

I don't consider the news as a relevant event to the share price. Any company can engage Roth Capital Partners and Craig-Hallum Capital Group (the company just has to pay ;D)

I guess Michael Hill, the CEO of CPNE.OB, has many ideas to produce very profitable business models over the internet, and just can't stand still. I believe there are so many things that can and need to be done in this area that CPNE's growth potential is beyond our imagination.

I'll continue holding CPNE.OB.

Quote from: David Randolph on February 19, 2007, 10:29:29 AM

I tried to subscribe the service just to test if they write "you'll be billed $49.95 if you don't cancel your free trial within 14 days", but I couldn't provide a valid ZIP and telephone number (because I don't live in the US).

If you have the time and the will, please do it yourself and then post the results here. You don't have to actually activate your free trial, just go through part of the process to see if they make that warning, at www.onlinesupplier.com.

I got to the final page before having to put in my credit card number and it does have a warning at the bottom that the customer will have to pay $49.95 per month if they don't cancel.  Probably most people are so excited to start that they don't read the fine print.  I have attached an image of this screen shot, see the link at the end of the post.

This reminds me of what a lot of my credit card companies do.  They send me a $10 or $20 check to sign up for a free month of their "Credit Protector Monitoring Service" but by cashing the check you have to pay something like $49.99 per month for the service.  I always cash these checks and then call the company to cancel within a week, before I even get my intro package.   ;D  Each one of those is another share of XING (not for long it looks like though)  :D :D

To answer David's question about chargebacks: even a valid contract can be contested. It's an automatic process and the credit card issuer assumes the customer is correct. The customer has to do no more than say he changed his mind. Some cards (such as Amex and several large Visa/Mc issuers), give the customer an immediate credit while they investigate. The investigation consists of sending a letter to the company that posted the charge. They then must reply with an explanation. It then goes back to the customer, who has a right to reply and on and on. This is a long drawn out process and in the vast number of cases, the credit card issuer decides in favor of the customer. If there are a large number of complaiints, the card issuer will then either revoke the charging company's right to charge or hit them with a penalty percentage  on the charges they make. These charges can range up to and sometimes over 10% (usual costs of processing a card are in the 2 - 3% range, with Amex being a bit higher.)

Michael
Thanks for your updated earnings and subscription model. As I look at it, the really key variables are the gross new and churn... but particularly the Gross New as I think you have done a pretty conservative job on the churn. We could tinker with a lot of other variables a bit.. tax rate, shares out, small changes in margin, but really the ability of CPNE to attract new subscribers monthly and keep them for a few months at least seems to be key to the entire investment thesis.

Since you are the keeper of the model, can you determine how sensitive the bottom line is to percentage changes in Gross New subscribers?

That is, if you plug in 10% less (arbitrary number) new gross subscribers vs your current model in any given qtr, what is the bottom line impact? You could also do a churn sensitivity and see if churn is 5% greater or less than your model, what the eps impact is (or ebitda if you prefer).

To my own relatively new eye, your Gross New assumptions for 2007 seem rather aggressive. Your Q1 07 represents a DOUBLING of new adds over Q4 06 and this lofty level then gets doubled again by the Q4 of 07. That is astounding to say the least... possibly TOO astounding? This then leads to an eps estimate for 07 of well over $1.00 -- actually $1.40 mostly taxed in your model -- which seems.... shall we say... ambitious for a company that just did 6 cents totally untaxed in the Q3 of 06.

But hey, if they can pull off even half of what you are estimating, this is a moonshot. if they match your estimates full bore, this is a intergalactic shot.

Quote from: webby67 on February 19, 2007, 06:29:47 PM
Michael
Thanks for your updated earnings and subscription model. As I look at it, the really key variables are the gross new and churn... but particularly the Gross New as I think you have done a pretty conservative job on the churn. We could tinker with a lot of other variables a bit.. tax rate, shares out, small changes in margin, but really the ability of CPNE to attract new subscribers monthly and keep them for a few months at least seems to be key to the entire investment thesis.

Since you are the keeper of the model, can you determine how sensitive the bottom line is to percentage changes in Gross New subscribers?

That is, if you plug in 10% less (arbitrary number) new gross subscribers vs your current model in any given qtr, what is the bottom line impact? You could also do a churn sensitivity and see if churn is 5% greater or less than your model, what the eps impact is (or ebitda if you prefer).

Hi Webby

That is exactly why I made the model. It make it much easier to assess the effect of any changes in VPNE's business and you are pointing at the two most critical assumptions Gross Connections and Churn:

Quote from: Michael on February 17, 2007, 07:53:22 AM
The long term profitability can therefore be condensed to two factors:

• The company's ability to reduce churn
• The company's ability to replace churned customers

Below are two simulations with different Gross connections and Churn assumptions.

The first scenario basically shows what happens if there is Zero growth in gross connections from this month.

In the second scenario I assume that only 90% of the subscriber churns. I think this is quite realistic. Some clients might like the service and some might just forget that they signed up and continue to pay.

And finally here is a simulation that shows what happens if the company announce a drop in gross connections this month to 50.000 instead of the expected 10% growth compared to January gross connections.

(Nice to see that it is not the end of the world - it might be a good buying opportunity if this happens and the share drops >:D)

Michael
Thanks very much for all your efforts. Great Job !

CPNE is bumpin today.

Quote from: das317 on February 20, 2007, 02:06:39 PM
CPNE is bumpin today.

Yes the chart is a beauty. We are once again at all time high but that was expected so let's talk about something else  ;)

Do you know the origin of the word bumpin?

It goes back to an advertising Game Burger King started selling in 2006 (yes there were some rapers that used the word before that but Burger King really made it part of the English Language!).

Now here is the interesting thing. Burger King started selling the game for an additional $3.99 with any value meal. 3.99 is a good (very, very short term) target for CPNE  ;D

You can read more here: http://encyclopedia.thefreedictionary.com/Big+Bumpin'

So what do you prefer a share from CPNE or a value meal from Burger King with a game?

Interesting.  You're making me hungry!

hehe, Michael has the fundamentalist's coolness :)

He wasn't surprised or excited with CPNE's 18% rise yesterday. As he said:

QuoteWe are once again at all time high but that was expected so let's talk about something else ;)

It was expected!

Actually on my chart the all time high for CPNE.OB is $58 in 2001. But that doesn't mean much for the future ... and of course CPNE.OB is at an all time high in market cap terms.

By the way, the current market cap is 47,313,084*$3.43 = $162,283,878. Given Michael's 2007 net income estimate of $76,342,987, the stock is trading at a forward earnings multiple of 2.13, so, it may very well rise 10 fold from the current closing price of $3.43.

Of course, for that Michael's estimates need to be met. We'll compare estimates with actual results as information becomes available.

Yesterday there was an SEC file out (http://www.sec.gov/Archives/edgar/data/1028070/000091957407001460/d748686_13g.txt), saying JLF Asset Management, L.L.C. held 3,037,500 shares of the company, or 6.42%, and that puts the current share count at:

3,037,500/0.0642 = 47,313,084 shares outstanding.

Over the Q3 10-Q there were 47,299,323, so practically there wasn't any dilution since then, giving more confidence that the company isn't lying or misleading investors to get their money.

As Tokyopua wrote yesterday:

QuoteMaybe this is part of why the stock is back up today to about the levels it was prior to Valentines day when the supposed "dillution" happened.  All those investors who mistakenly thought it was dillution bailed, but now there is definitive news out showing it wasnt dillution.  This is where it pays to know the rules and hold through the market reactions.  Glad I added to my position during all that noise ;)

Tomorrow we'll hear about Q4, 2006:

«Commerce Planet's presentation at the conference is scheduled for February 22nd at 8:30 am (PST) in the Ritz Ballroom, Salon 5. While attendance at the conference is by invitation only, the entire presentation, including the 2006 Q-4 guidance which will be discussed, will be available via a free public live webcast at http://www.wsw.com/webcast/roth9/cpne.ob/ . Users may access the free webcast by going to the link provided and entering their name, company name and e-mail address at the designated start time, and can access the archived presentation for up to a year thereafter.»

Michael's latest estimate calls for $11,730,047 Q4 revenue. My estimate written on the first page of this thread calls for $11,215,705. Let's see what the actual numbers are.

Nice breakaway gap yesterday, I'll continue holding CPNE.OB with strong hands.

Hello everyone!! I had to work the last couple of days so I was not able to hang out here on the board. I sure was glad to see CPNE.OB having a nice run before their Investor's Conference tomorrow. I wonder if they will leak some news today  to help get this thing above 4.00? I must admit that it is tempting to take some profits here but, I think I will take a long term approach and not sell until I see a good reason to. My near term target price remains 8.30 per share. I agree with David that after the conference tomorrow we will most likely see 5 dollars over the next month. Good luck to all. Tireslinger. 

Does that look like an island reversal on the chart?  :o

Quote from: realcoolhead on February 21, 2007, 08:27:46 AM
Does that look like an island reversal on the chart?  :o

No realcoolhead, that technical pattern can only happen after a prolonged descending trend, when the stock gaps down, stays down for a month or two, and then it gaps up, leaving that area "alone" on the chart, making it an island.

CPNE's chart doesn't fit the description :)

AEY is a good example: (by the way, AEY looks attractive, nice candidate for the Main (http://www.3stocksonfire.org/3stocksonfire.php))

I see, the key word is "prolonged" ... thanks.

Quote from: David Randolph on February 21, 2007, 08:36:58 AM

No realcoolhead, that technical pattern can only happen after a prolonged descending trend, when the stock gaps down, stays down for a month or two, and then it gaps up, leaving that area "alone" on the chart, making it an island.

CPNE's chart doesn't fit the description :)

AEY is a good example: (by the way, AEY looks attractive, nice candidate for the [ur=http://www.3stocksonfire.org/3stocksonfire.php]Main[/url])

Commerce Planet, Inc. (CPNE) @ 8:30 AM PST will be speaking at the Roth 2007 OC conference.

Is there a live Webcast or conference call so we can hear the information being presented real time?

Company:                      Commerce Planet, Inc.
Ticker Symbol & Exchange:     CPNE (OTC:BB)
Phone:                        (805) 964-9126 x 3134
Web:                          http://www.commerceplanet.com
Date of Presentation:         February 22, 2007 8:30am Salon 5

Commerce Planet is a publicly traded, internet based media company
(CPNE.OB). The Company offers online media products, lead generation
services and marketing tools to its clients. Commerce Planet offers
an internet turnkey solution through its network of wholly owned
subsidiaries, Consumer Loyalty Group, Legacy Media, OS Imaging and
Interaccurate.

Each subsidiary specializes in a specific niche of the online media
industry. Their combined services are designed to address all the
needs of their partners including: membership loyalty programs;
direct response consumer marketing; affiliate list management; email
deployment, live chat services, phone sales & customer service and
printing & fulfillment services.


This is what I took off of the conferences website so if anyone is in the area, you now know what room the presentation is to be done in. I cannot tell if there is anyway to check it out live though.

Quote from: lancefur on February 21, 2007, 12:52:29 PM
Is there a live Webcast or conference call so we can hear the information being presented real time?

«Commerce Planet's presentation at the conference is scheduled for February 22nd at 8:30 am (PST) in the Ritz Ballroom, Salon 5. While attendance at the conference is by invitation only, the entire presentation, including the 2006 Q-4 guidance which will be discussed, will be available via a free public live webcast at http://www.wsw.com/webcast/roth9/cpne.ob/ . Users may access the free webcast by going to the link provided and entering their name, company name and e-mail address at the designated start time, and can access the archived presentation for up to a year thereafter.»

Some news out, basically further info on the V day shares sales. 

If I read it correctly there is no real change to that transaction or its meaning, though my guess is that worst case the company may need to record a temporary liability on their balance sheet of up to 8% of the transaction price should there be complications in the selling of the shares by the purchasing parties.  (CPNE needs to correctly register the shares, etc. otherwise the purchasing parties wouldnt be able to sell them, etc., its just insuring the buyers that they can sell should they wish to without complications.)  Once those condidtions are met or the shares are sold by the buyers, then that liability would no longer hold.

Pretty much a non-event as far as I am concerned, though at first I was a little concerned to see the headline after hours the day before earnings are to be released  ;)

http://biz.yahoo.com/e/070221/cpne.ob8-k.html

tokyopua
As I understand it, the full-fledged earnings are NOT being released tomorrow. The company is presenting at an Institutional Investor Conference, which will be webcast as David posted the link, and at that presentation the chairman will provide some GUIDANCE on 4th quarter results.

It is essentially a "pre-announcement" of most likely Q4 revenues and maybe even eps or some ebitda type number. At least that is how I read the PR from a week or so ago... GUIDANCE for last qtrs results, not an EARNINGS RELEASE.

My understanding is that the full-bore earnings are to be sometime next week. But who knows, maybe they WILL release a full income statement....

And I imagine much or most of the presentation tmw will be about the company, what it does, what its strategies are, how it plans to grow, etc etc to whet the appetites of the small cap invitation-only investors.

Quote from: webby67 on February 21, 2007, 07:19:19 PM
tokyopua
As I understand it, the full-fledged earnings are NOT being released tomorrow. The company is presenting at an Institutional Investor Conference, which will be webcast as David posted the link, and at that presentation the chairman will provide some GUIDANCE on 4th quarter results.

It is essentially a "pre-announcement" of most likely Q4 revenues and maybe even eps or some ebitda type number. At least that is how I read the PR from a week or so ago... GUIDANCE for last qtrs results, not an EARNINGS RELEASE.

My understanding is that the full-bore earnings are to be sometime next week. But who knows, maybe they WILL release a full income statement....

And I imagine much or most of the presentation tmw will be about the company, what it does, what its strategies are, how it plans to grow, etc etc to whet the appetites of the small cap invitation-only investors.

Yes, you are right, I should have said "before guidance is released" or something like that, its not official earnings as far as I can tell either.  It really isnt clear *exactly* what is happening tomorrow in their presentation, but there should be some clues as to earnings, here is to hoping they are good!

Hmmm...I knew JFL rang a bell...I recall the below article that 1st appeared in the WSJ about a year and a half ago...Seems to indicate that JLF may dump short term?

Is this the same JFL-- again, please forgive my newbieness :)



"Lifting the curtains on hedge-fund window dressing
Wednesday, September 07, 2005

By Jesse Eisinger, The Wall Street Journal



There are several names for it but the most common are Painting the Tape or Portfolio Window-Dressing.

That's when a fund manager buys lots of shares in a specific company they already own, helping push the share price higher and thereby helping to dress up performance figures. Such practices have historically focused on the last day or days of the quarter, since mutual-fund managers focus intently on quarterly performance figures.

The practice was never widespread, but was too common for comfort. Regulators have rarely done much about the curious movements of certain stocks in the final days of a quarter or a month.

But now it appears as if strange movements are appearing at the end of the month. Why? It may be because of the proliferation of hedge funds. Many hedge-fund investors get monthly updates. A down month sets off red flags for hot-money investors and can cause an unwanted exodus of cash.

"Hedge-fund investors have been typically much more short-term-oriented and driven more by monthly returns. It's a short-sighted way of looking at it," says Barry Colvin, the president of Tremont Capital, a "fund of funds" that also tracks hedge-fund data.

The practice of tape-painting usually takes place in stocks with small market values that don't trade a lot of shares. The low volume of trading means a big buyer can move the share price more easily. In the old days, when portfolio managers actually talked to live traders, they might instruct them to "buy it sloppy" -- to disregard price for the purchase.

Often -- but not always -- the share prices recede in the days following the quarter or month. A fund manager investing in a smaller stock can hang on to the stock, rather than sell right after the quarter. Also, a spurt of buying can lure followers. But eventually, the big holder in the smallish stock has to sell, and the exit isn't so pretty. So why do it? Usually investors like to buy low and sell high, but on the last day of the month, the rule becomes buy high and sell wherever or whenever. The reason is that every little bit helps to make a portfolio's monthly record as good as it can be.

One reason that such practices aren't more widespread is that when a big fund plays around with a small stock, it probably won't have a huge impact on its overall performance. Therefore, such practices are usually the purview of smaller funds, where a big move in a smallish stock can have an impact on overall monthly or quarterly performance.

Last Wednesday was the last day of trading in August. It had its share of striking stock charts that look like the letter L lying on its side. In other words, the stocks were trading flattish until the last hour of trading or so and then shot up on heavy volume.

Among them:


Medical Properties Trust, a health-care real-estate investment trust with a market value of about $430 million, was up 50 cents, or 4.8 percent.


True Religion, a $340 million market cap maker of one of those brands of jeans that women actually pay 240 bucks for, was up 46 cents, or 3.1 percent.


Golf Galaxy, an owner golf-supply stores with just over $200 million in market value, was up $1.25, or 6.8 percent.


Nano Proprietary, a nanotechnology company with just over $250 million in market cap that is traded on the bulletin board, was up 19 cents, or 8.4 percent.


Pico Holdings, which runs a water company and owns land in Nevada, and has a market cap of just over $400 million, was up $1.20, or 4.1 percent.


Those were big one-day jumps, especially since all of these stocks beat the performance of the small-stock tracking index, the Russell 2000, which was up just under 2 percent that day. All but Medical Properties have moved higher since Aug. 31.

It's impossible for outsiders without access to the trading records to know what happened for sure. But there is one common thread: They are all stocks that were owned recently by JLF Asset Management, a roughly $500 million hedge fund run by Jeff Feinberg, according to recent Securities and Exchange Commission filings.

As of an Aug. 31 proxy filing with the SEC, JLF owned 6 percent of Medical Properties Trust.

As of a July 22 SEC filing, Mr. Feinberg was listed as a 5.4 percent holder of True Religion.

As of an Aug. 11 SEC filing, Mr. Feinberg owned 6.2 percent of Golf Galaxy.

JLF owned 6.2 million shares, or about 6.2 percent, of Nano Proprietary as of the latest SEC filing.

JLF had 404,000 shares, or 2.5 percent, of Pico Holdings as of June 30. JLF was listed as a selling shareholder in a July 14 offering document.

I sent Mr. Feinberg an email detailing the movements in these five and 10 other companies that his funds were listed as owning as of the latest filings that had noteworthy, but less significant, moves on the last day of August. When he called me back, he told me he wouldn't comment on specific positions and trades.

But he told me: "There's no incentive for me to do anything like you are insinuating," adding, "Almost half the companies I don't own and the vast majority we have not transacted in recently."

I asked him about the five stocks listed above and one other, and he repeated the line above. He then ended the phone call.

Mr. Feinberg started his hedge fund in 1999 and developed a reputation as an active trader and griller of managements. He says he has compounded annual returns since then of 22 percent. He says that after having taken a sabbatical for several months in 2002 to spend time with his three children, he reopened at the beginning of 2003. He was up 15 percent in 2003 and up more than 18 percent in 2004, he says. Since he was down in 2002, when he reopened, he honorably declined to take a performance fee until he got back to even, a common industry practice for an ongoing fund.

Year-to-date, he says he is up more than 5 percent. In July, he was up 9 percent, he said. But in August things didn't go so well: His fund lost 2 percent, he says. It's not hard to see one reason that might be: Abercrombie &amp; Fitch, of which JLF owned 437,100 shares as of June 30, was down 29 percent in the August after having issued a disappointing forecast.

August might have been even tougher if his other positions hadn't rallied on the last day."

jmcarr2,

Looks like in the article they refer to JLF Asset Management, but in the CPNE agreement its JLF Partners I, L.P., and JLP Partners II, L.P., so its not 100% clear that it is the same group.

But even if it is, there is a difference between buying on the open market in last few days of the quarter to window dress vs. entering into an agreement well in advance of a mid quarter purchase at a fixed price that is not on the open market, and thus wont move the stock (asside from the lemmings who bailed while screaming dillution, lol).. 

In fact, if it is the same group that adds to the bullish case here as the article you posted cites that JLF is known "for grilling managment" or something like that, which means he really pushes management and asks lots of questions.
So that would indicate that the purchase was made after really doing lots of DD and also that they will pressure them to perform after the purchase as well.

Hi tokyopua,

Yes...The foolish lemmings were helpful in boosting the portfolio :).

Assuming that it is the same (sole) small San Diego hedge fund referred to, at least we can garner that the end of month seems to be the selling time if their other assets don't do well. When will JLF be able to sell these shares?

It probably won't have a worse effect than a collective group of short profit driven daytraders owning the same number of shares. It's just kind of a large number of shares to be in the same hands with such small CPNE daily volume. Maybe we can assertain how well the hedgefund is doing month to month to make an educated guess as to whether or not JLF will "dump"  :D

Well, like Michael said, there will be lots of ups and downs along the road-- it should be a real good learning experience for me to keep a "realcoolhead".

Best Regards

Oooops :o

Sorry tokyopua, I meant "ascertain"...I just saw a very gnarly definition of "assertain" on urbandictionary.com...

Hey, this newly designed site of CPNE is way cool! >:D

http://www.consumerloyalty.com/

Quote from: jmccar2 on February 21, 2007, 10:20:16 PM
Hi tokyopua,

Yes...The foolish lemmings were helpful in boosting the portfolio :).

Assuming that it is the same (sole) small San Diego hedge fund referred to, at least we can garner that the end of month seems to be the selling time if their other assets don't do well. When will JLF be able to sell these shares?

It probably won't have a worse effect than a collective group of short profit driven daytraders owning the same number of shares. It's just kind of a large number of shares to be in the same hands with such small CPNE daily volume. Maybe we can assertain how well the hedgefund is doing month to month to make an educated guess as to whether or not JLF will "dump"  :D

Well, like Michael said, there will be lots of ups and downs along the road-- it should be a real good learning experience for me to keep a "realcoolhead".

Best Regards

Hmm, I guess that would be good info if someone could sleuth that, i.e. how soon they can sell.    I suppose that a mass sell by them would be equivalent of the dillution scenario we calculated in terms of a short term price drop, though probably not as bad since obviously they wouldnt be selling at $1.9.   However, hedge funds are smart, they want the most they can get for their shares, so I would think they would unload gradually anyway so as not to depress the market for their own shares.

Quote from: realcoolhead on February 21, 2007, 10:45:35 PM
Hey, this newly designed site of CPNE is way cool! >:D

http://www.consumerloyalty.com/

Nice face lift, good to see they are improving the website.

Quote from: nullzero on February 21, 2007, 11:24:22 PM

Quote from: realcoolhead on February 21, 2007, 10:45:35 PM
Hey, this newly designed site of CPNE is way cool! >:D

http://www.consumerloyalty.com/

Nice face lift, good to see they are improving the website.

This is not the main website, it appears to be a new subsidiary or something.

A glimpse of the future, perhaps???

I just went to that new Consumer Loyalty Group website, very spiffy.

Anyway, I clicked under Membership Programs and five topic headings came up. They described the current membership offerings under "Income and Investment" -- online supplier and the investing for success real estate programs are here; and under Shopping/Discounts tag which has buydiscount and some other shopping related programs.

But there are 3 topic tabs that all say "COMING SOON"

-- Education

-- Career

-- Finance

are we getting a sneak peek of where the membership programs are heading to in the near future???  Verrrry interesting...... ;)

As you know, this news was out:

• COMMERCE PLANET Files SEC form 8-K, Amendments to Articles of Inc. or Bylaws; Change in Fiscal Year, Other Events, Fi (//http://)
EDGAR Online (Wed 5:13pm)

It is a non-event. Basically it is saying JLF Parties can't sell those unregistered shares (which are included in the number of outstanding shares) without CPNE's prior registration of those shares. If CPNE doesn't register the shares, JLF Parties can't sell them, so CPNE agreed to some penalties if that's the case.

I don't think it matters all that much who owns the shares, or if they will sell sooner or later. What matters is the fundamental value of each share. If JLF Parties decides to sell, someone else will be glad to buy, what's the problem? A short term dip? That's not a problem.

QuoteBut there are 3 topic tabs that all say "COMING SOON"

-- Education

-- Career

-- Finance

are we getting a sneak peek of where the membership programs are heading to in the near future???  Verrrry interesting......  ;)

Yes webby67, no doubt the company will continue to explore and expand its successful business model into other areas. www.investinginsuccess.com is another website that I think may attract many subscriptions.

Basically, what CPNE.OB is all about is creating and selling high margin subscription services over the internet. www.3stocksonfire.org could be one of their subsidiaries ;) (the only difference is 3 Stocks churn rate is almost zero, and CPNE's is probably about 50% a month - another big difference is they have well over 100,000 subscribers and 3 Stocks has only 151 ;D (but I love them all :-*)). We'll probably get more clues about the actual churn rate today.

Now, the big deal today is the guidance that we'll get on 4th quarter numbers, at 11:30 ET. Between me and Michael, we expect revenues at about $11.5 M and EPS of $0.09 for the quarter.

If, instead of $0.09, they report, say $0.10 EPS, I think CPNE.OB shares would be at $6 in no later than April 2007. But we'll just see about that.

I'm not planning to sell the shares held on the Main Portfolio (http://www.3stocksonfire.org/3stocksonfire.php) whatever happens today, since I don't make intraday decisions on this Portfolio and I see outstanding long term value.

news out !
Commerce Planet, Inc. Provides Pre-Filing Guidance for 2006 Results
Thursday February 22, 7:00 am ET

GOLETA, Calif.--(BUSINESS WIRE)--Commerce Planet, Inc. (OTCBB:CPNE - News), an online media company, and its wholly owned subsidiaries expect to report $8.6 million in profit for fiscal 2006. The 2006 profit represents a complete turn around from fiscal 2005's net loss of ($6.3) million. Commerce Planet expects to report 2006 consolidated revenue of $27.4 million and combined revenue including inter-segment transactions of $34.7 million, which represents year-over-year growth of 275% versus 2005 consolidated revenues of $7.3 million. Earnings for the year ending December 31, 2006 are expected to be $0.18 per weighted average share versus ($0.17) per weighted average share for fiscal 2005. These expectations are based on preliminary financial data and are subject to the final closing of the Company's books and records for the fiscal year.

Michael Hill, CEO, stated, "As our numbers represent, the Company is extremely healthy with strong future growth potential. We intend on leveraging the infrastructure we have built to keep our upward momentum for 2007. I am extremely proud of our management team for their continued commitment to excellence and seamless execution of our strategic initiatives. Their passion and dedication to Commerce Planet has lead to our current level of success."

As I do the math on the guidance, the numbers for Q4 are OK, but not really great, and they are well below what Michael and David were looking for.

Revs about 8.8 mil and eps of about 8 cents for Q4. I know that Q1 is really gonna be the breakout qtr, but these Q4 numbers are  not all THAT great and I dont know why Mr. Hill was in such a hurry to get them out at this Roth Conf with all the advance hoopla and week-ahead PR announcing it .....  ???

I hope I have made an error somewhere, but this smells like "selloff" to me....

Thanks la-onda :)

- 4th quarter EPS came in bang in line with what myself and Michael were expecting, that is $0.09 (the $0.18 reported for the full year minus the $0.09 the company already had over the first 3 quarters).

- On revenues, I have doubts about considering the $27.4 M or the $34.7 M number, and that's a big difference. For the first 3 quarters they had revenues of $18.645 M, but I couldn't find out under revenue recognition policies if this is consolidated revenue or "combined revenue including inter-segment transactions".

On that it depends if they had Q4 revenues of $8.755 M (not all that much growth) or Q4 revenues of $16 M, which would represent incredible quarter on quarter revenue growth.

We need to check this out ...

It would be better if they reported the numbers on a quarterly basis, because that way everybody would see the $0.09 EPS, multiply by 4 quarters and get $0.36, apply an average 16 times earnings multiple and push the stock towards $5.76.

This way they may see, instead, $0.18 EPS, means trailing earnings multiple at $3.32/$0.18 = 18.4, not so cool.

But the truth is: the company met our projections on EPS terms (I wonder about revenue), so it's on track. But I wonder about revenue growth ... let me check some more things.

David:
On the revenues, I think the $27 mil is the one to go with. The higher number represents raw revs by biz unit but there are a lot of intersegment transfers and double counts that have to be eliminated before getting the actual revenue number. So the higher number is really not a number I use or look at much in their reporting.

On eps, I am confused about whether they are talking about Basic EPS or FULLY DILUTED eps. My basic eps shows 10 cents for the first 3 qtrs; diluted eps is 9 cents.

Now if they earned about 8.6 million in net income for the year (as per the PR) then their 18 cents would be BASIC eps, since if you divide 8.6 million by the diluted share base (around 54-55 million) you get just 16 cents.

So I am assuming they reported BASIC EPS today, which means it would be just 8 cents for the Q4, put on top of the 10 cents basic already reported for the first 3 qtrs, leaving 18 cents total.

I prefer using fully diluted nos myself, but 8.6 million divided by the fully diluted share base just does not compute to 18 cents for the year.

So I think the eps for Q4 may NOT be as good as all that...

please correct me if I am in error...

Webby67 is right, comparable revenues for the 4th quarter were just $8.755 M, well below our $11.5 M average estimate. Probably this has to do with what someone posted somewhere on this thread (I think it was Michael), saying they had very conservative revenue recognition policies, and waited 3 weeks for credit cards to settle everything, so the last 3 weeks of December, which were the strongest, didn't count for this quarter, just for Q1 2007.

Yes, I believe there can be some sell off on the news, but this is the Main Portfolio (http://www.3stocksonfire.org/3stocksonfire.php), and I still see EPS growing a lot in 2007, and that will mean a lot higher share price.

Therefore I'll continue holding CPNE.OB as a long term investment.

(just read webby67's last post, he's right on the EPS number too, diluted EPS for the 4Q was just $0.08, $0.09 is the "basic" EPS number)

David
Just to show that I'm not all doom and gloom, here are some positive nuggets from what I can tease out of the numbers (all are approximates)

-- Revenues were up sequentially from Q3 by about 15.3%; this is actually an acceleration of the sequential growth rate from the 7.6% recorded in Q3 vs Q2 (and revs were up an unbelievable 80% sequentially in Q2 so it moved everything to a new, much higher plateau)

-- Net Income grew sequentially by about 24% over Q3. Not bad, in fact very good !!

-- Margins improved as well... I calculate net profit margin in Q4 of about 43.5%-44.0%, versus 40.8% in Q3.

I dont know if Mr. Hill plans on giving any rough guidance for 2007 in his talk today, but it SURE WOULD HELP !!! :-*

Good Morning!! What a beautiful day. I hope all is well with everyone. I was looking at the projections for CPNE.OB that Micheal was gracious enough to do for us and decided that it would be fun for all of us to be able to make our own projections and assumptions and turn them in here on the board. We all have different input and views about how the coming quarters will go so I created a spreadsheet that would make it simple to project  the full year 07 financial s  for CPNE.OB based on Michaels layout.  Just use the white spaces at the bottom where it says Projected growth to make your estimated growth assumptions. This is something that I just threw together this morning so don' be to critical of this spreadsheet. Thanks.  :)

 ;D I love this web community!!! Great Coverage on CPNE.OB WEBBY67, and of course David. The key words that I heard were that the last 3 weeks of December were not counted. We ran some numbers in a past thread that was talking about CPNE new customer growth and how much they were contributing to the last few months of the year. If memory serves me correctly these were some significant numbers. I will go back and try to find the threads. Thanks.
tireslinger

 ;) I found it. From David's Analysis



Let's consider monthly growth in November was also 50% from the prior month, October. I get 17,993 new subscriptions in October, that means $898,725 in new revenues for that month.

Now let's consider a very high costumer churn of 50%, each month (I don't know if this is too high or not, it depends on the quality of the service).

October contributes with $898,725 + $449,362 + $224,681 = $1,572,768 for Q4.

November contributes with $1,797,475 + $898,737 = $2,696,212

And December gives $3,594,951 in new revenues.

Sum this up and get $7,863,931 in new revenues for Q4, 2006.

Of the $7,627,533 Q3 revenue, $6,036,364 came from subscriptions. The rest came from the company's other subsidiaries, that is, $1,591,169, which we will leave constant.

Assuming the same monthly churn of 50%, the $6,036,364 obtained in Q3, divided by the 3 months, are $2,012,121.

So, this gives me just $1,006,060 for October, $503,030 for November and $251,515 for December. That is a $1,760,605 revenue contribution for Q4.

Summing it all I get $11,215,705 for 4th quarter revenues. If they maintain the net profit margin of Q3, which was 40.83%, net income for the quarter will be $4,579,219, which translates into $0.0964 EPS.

David:
I am hoping we can at least hold 3.00 on this selloff at the start, but I wouldnt be shocked to see that breached on the downside, at least for a while.

oops,,, too late.. even as I type we are almost at 3.00

Hill better blow the cover off the ball at his presentation in two hours....

Added more @$2.90

I just finished listening to the Roth Capital Partners presentation and I really liked the presentation.

Beside the continued stock buy back I paid notice to this part:

Each new customer is worth $175.

We know that each customer in average sign 1.5 subscriptions so each new subscription is worth $117. This validates our churn model.

I will update the model over the weekend. (a bit busy this week).

I am surprised that the stock is down today. Yes they fell short of our forecast but not with much. A model always have a lot of uncertainty and now we have certainty.

Look at the PE and the growth and if you think the stock is trading at fair value. Well sell.

I think it is a bargain,

thanks for your remarks Michael... I hope you are right.. I have a feeling I did everything wrong today.. I first sold XING at the open and then rebought much higher in the afternoon :-(. And I was buying more of CPNE all day long to see it tank at the end of the day.... :-(.
I am surprised to see such a severe reaction to the release of financial data that look pretty good.. I wonder whether we are not missing something, It is OTCBB after all (I still have CHID in memory)...

just came back from lunch and a short walk. Actually i planned to sell when it bounced back to $3.24, but then i decided to wait for the webcast at 11:30am. And yes, I liked the presentation also, but too bad CPNE did not hold the line at $3.00, but take a look at eh PE and the Growth, i do not think it is trading at fair value; therefore, i bought more around the bottom and i am pretty confident with its medium or long term.

This will take some time to recover...I read somewhere that the next support level after 2.75 is 2.25  :-[

Americanbulls has posted a Sell-If:

http://americanbulls.com/StockPage.asp?CompanyTicker=CPNE&MarketTicker=OTC&TYP=S

Does anybody see a silver lining here?

Hello everyone!!
I was wondering if any one could tell me how much interest expense CPNE had to pay out in this quarter for the retirement of the 5 million in debt that they had. This number could have adversly affected quarter in a negative way and should be deducted from the bottom line. This would fall under the category of Non recurring expenses or one time charges. Since CPNE has retired most all of their debt this will not be a charge to EBTDA in the coming quarters.

jmccar: The only silver lining I still see here is that the stock remains fundamentally CHEAP based on expected '07 earnings. that has to count for SOMETHING... :-\

tire: we wont know the actual amount of that early retirement charge until the company files its full financials probably next week. It was mentioned very very briefly in today's presentation, but not as to the specific number.

jmmcar,
That is exactly why I would not sell the stock today in fact I bought more. I need to see the financials to get a complete picture of the quarter. I think the quarter was better than most people thought it was. Yes sales were light but, we also should remember that the last three weeks of december were not figured into the equation. 1st Quarter 07 could be a shocker!!!

Quote from: webby67 on February 22, 2007, 07:18:03 PM
jmccar: The only silver lining I still see here is that the stock remains fundamentally CHEAP based on expected '07 earnings. that has to count for SOMETHING... :-\

tire: we wont know the actual amount of that early retirement charge until the company files its full financials probably next week. It was mentioned very very briefly in today's presentation, but not as to the specific number.

then i do NOT understand why it is down so much today and everyone is so unconfident about CPNE, well.. i believe it can not be bearish for long.

David,

Normally a 16% decline would have had me waiting to pull the trigger,lose my position then wait and wait and wait as it kept bouncing back up.But since I have been on board with 3SOF I have learned to have no worries on the fluctuations. I guess it doesn't hurt to still be up over 20% since the recommendation though  ;). Keep up the good work!
Brad

I have always been the type of investor that panics and sells at the bottom even though I thought I knew better. Then I would look at the stocks a few months down the road and it would have doubled in price and all of the same people that I use to discuss the stock with on the message boards would be saying "man I sure am glad I stuck it out and was patient. All the weak hands got shaken out a few months ago" hahaha ha" Its not so funny when your one of those weak hands. I am trying to focus on the big picture for CPNE.OB and the long term potential this stocks has. I think that being here on this board with all of these polite and informed people(much different from yahoo boards) will help keep me a lot calmer and help me to regain my confidence in myself.

Good read-- http://www.otcjournal.com/otcb/?p=373

David, a while back, you stated:

"For now I'm going to stick with about $0.10 EPS a quarter, that is, $0.40 EPS in 2007, and a fair earnings multiple of 36, due to the company's fat gross and net profit margins. That means $14.4 a share to be achieved during the course of 2007, and I'll keep holding for as long as my expectation is confirmed by incoming developments."

Do OTCBB stocks ever reach a "fair earnings multiple"?  Can CPNL ever reach a 36 PE without first becoming listed on NASDAQ?  I always thought that OTCBB stocks traded at a significant discount.  Would not a 10 PE be more appropriate before then?

Thanks webby, tire and dcrlin-- what a great link...I checked the otcjournal a couple times today and the editor suggested it wouldn't be before this weekend that he addressed CPNE. Coming from this fellow, who's been warning of a knee-jerk sell-off (on ANY kind of news) for a couple days now, this is comforting news. Just for the record, I'm extremely heavy on CPNE and have no intention of selling 1 share until (at very earliest) Q1 earnings are out.

Here's another silver lining (if it means anything)...Up .12 in after hours trading:

http://money.cnn.com/quote/quote.html?symb=CPNE

Budd, I saw this discussion also on the ragingbull site, where some were of the opinion that an OTC stock should now have the expectation of the industry average PE (I think it was mentioned that none have ever achieved it)...20-25 PE was suggested as reasonable. It's a great question that won't be relevant anymore once CPNE goes Nasdaq! :D

summarized CPNE slides from Roth conference:

cheers from SG
Oliver

Thanks for that La-londa, I saw that on the slide show today-- it definitely was a slick presentation :)

The proper PE valuation debate for a OB stock has been raging on ragingbull and a one conservative poster has indicated that as a rule of thuumb he attaches a PE of 10 to OTC stocks and 5 for Chinese...General consenses seems to be that with growth rates taken into account, this is a moot point...However...with todays numbers out (yes, I know 3 week delay on enrollment figures, etc.), my deepest fear is that revenue growth was due in large part to the billing dept. dragging their feet for a while on cancelling subscriptions at onlinesupplier...Now, maybe it's just me, but I noticed a scale down in rip-off report activity that seemed to coincide with preparations for this conference today. Somebody please assure me that revenues aren't (weren't)largely dependent on unsavory automatic billing practices. Here's a post from a (supercilious) ragingbull poster who tried the service-- I don't know how recently--

"i told you guys pay $50 and become memeber in 2 days. you will never touch this stock again .. i sold my remaining shares in 3.30s and am out.

GL .. don't forget to see the POS hype by becoming a member of onlinesupplier.com

if you don't puke once you go through the site, remain long"

Spelling errors and puerile writing style aside, what do you guys think about CPNE's ethical billing practices, product offering (I understand you have to pay before you see range of products) getting in the way of growth. Was the 3-week delay information that was passed by Hill to Eggman spin to mask this in any way?

Also, I need to amend my previous post...I will also sell short if David makes the call  :)

EMA 20 as first support

also check:
http://www.stockta.com/cgi-bin/analysis.pl?symb=CPNE&num1=3&cobrand=windchart&mode=stock

Hi La-londa,

Here's the quote I referred to earlier:

"Nice to see most of you guys try to put a positive spin on the day's action, but the fact it we had a high-volume reversal day today, on the most shares in nearly 7 months. That caused a fair amount of damage to the chart, shook out a bunch of stock - some, I'm sure, reluctantly - and set everyone back. "Buy on the rumor, sell on the news" and all that... Remember, yesterday was a bad day for the stock too, on low volume.

I did some averaging up at the end of the day, when the 2.80 level seemed to provide some support, but it has been an ugly day, no matter how you slice it.

The good thing is that the 2.75 level that provided support in the last few days has not been violated. If we can hold that level and have some brave souls step up, we may see the stock rally again next week. It will have to be new investors, not just the "usual suspects" who inhabit this board. The fast stochastics went to hell today, from 90+ to 15 - that's ugly too. If we crack 2.70 on a closing basis, the next logical support would be the 50 day MA, at 2.25 or so.

As I warned earlier, the fundamentals will only carry you so far, then the demand/supply picture rules the trading.

The Bull"

I know it goes against the nature of portfolio, but would it be within the realm of acceptability to perhaps sell off and buy back in at a lower level if these drastic drops occur?  Or, am I just being a Nervous Nelly who maybe should grow some  more courage or give up trading  ???

Thanks  :)

"

Quote from: jmccar2 on February 22, 2007, 11:50:44 PM
I know it goes against the nature of portfolio, but would it be within the realm of acceptability to perhaps sell off and buy back in at a lower level if these drastic drops occur?  Or, am I just being a Nervous Nelly who maybe should grow some  more courage or give up trading  ???
"

I suppose you will get different answers, but one key about trading to realize is that the final decision is/should be yours.  I have ridden a few of these high expectation stocks like CHID and GV back down to where they came from, so have elected to do that less based on technicals and have elected instead to take profits more often when the chart goes against me, then try to get back in.  Maybe it works differently for different people, but I have made more money since I got a little more ruthless in that regard. 

I should qualify here that I know more about technical analysis than I do about fundamental analysis, so I am just working better with what I know now.  I am trying to balance that by reading Mastering Fundamental Analysis, etc., so that I can do more of the long term investing like David does.

I sold CPNE this morning, got a bad fill at 3.07 because Etrade took forever to cancel my first bid of 3.20 that got passed up  >:( but hey, that is what happens when trading BB stocks, I asked them and they actually have to call the floor so it takes more time supposedly).  But I see the potential being discussed here for CPNE, so for another $10 I know I can be part of it again soon  :D   Or for free if I buy with my Bank of America account  ;)

We all will trade differently, but best of luck to us all, and may we continue learning from each other, that is always worth more longer term than the money lost or gained in a single day  :)

Intereting debate and day for CPNC. As ever .OB stocks have higher volatility than main stream stocks, therefore the risk reward is amplified. You have to KNOW what your strategy is with your position 1) If you are holding long term then you would have a stop (mental or hard) that would sit some distance below a longer term MA or ATR. If you were holding for short term gains only then you would be quicker to take profits.
David shows the perfect setup there 1) He is holding his long term position 2) He sold his short term position
If you um and err about the strategy for holding the stock then you will nearly always get a dissapointing exit to your trade.

Quote from: jmccar2 on February 22, 2007, 11:50:44 PM
I know it goes against the nature of portfolio, but would it be within the realm of acceptability to perhaps sell off and buy back in at a lower level if these drastic drops occur? Or, am I just being a Nervous Nelly who maybe should grow some  more courage or give up trading  ???

The problem you have though jmccar2 is that you only know you are in a drastic sell off after it has occured.

If you apply short term long term strategies to your holdings you would know when or when not to exit more clearly and with less emotion.

I am holding my CPNE longer term, I was nicely in the green before, and am still in the green. I dodn't sell because CPNE hadn't reached the type of price my entry and holding reasons are set for.

Good Trading

Thank you both very much for the personal and succinct responses :). I have made my decision that I'm staying long on CPNE unless otherwise directed by this site. It is my own view that to sell a stock with this potential now, while somewhat in the red, would be a mistake. I need practice maintaining strong hands through short term dips anyways-- that's worth any (reasonable) potential loss!

This thread has a lot of emotions and "juice" :)

Let's take care of the emotional side first. Some of you are nervous about holding CPNE.OB, not because of the fundamentals, the chart or the news, but because you're not respecting basic money management rules and are too heavily invested in one single stock. No man can be calm and unemotional about stocks when he has a big chunk of his money at risk in one single stock. What's that thing of "I bought more", "I'm buying more", "I kept buying"? I guess you're trying to get more confident by holding more shares, but that works in the opposite way, the more you invest, the more your fears and imagination will grow.

The path to "stronger hands" also has to do with managing risk. For example, I never average down or up. I always invest a fixed portion of capital in each stock,  in the Main (http://www.3stocksonfire.org/3stocksonfire.php)'s case, 6.66%. To be full invested I need 15 different stocks, it doesn't matter how much I like one or another. It is a simple money management rule that has kept me out of trouble - for example, yesterday CPNE.OB went down, as you're very well aware, 16%, yet the Main (http://www.3stocksonfire.org/3stocksonfire.php) went down a manageable 1.51%.

If one's capital is not enough to spread it through 15 stocks, spread it just through 5 or 10 stocks, but, my advice is for you to divide it in equal parts and invest an equal part in each stock you want to invest.

It is hard enough to know what and when to buy, you don't need the trouble of considering "how much" to buy. That should be set before the game begins and shouldn't be changed without careful and in depth strategic thought. The "buy more" reaction when the stock fails to meet expectations and turns south is a sure way to disaster.

Now the juice.

QuoteDo OTCBB stocks ever reach a "fair earnings multiple"?  Can CPNL ever reach a 36 PE without first becoming listed on NASDAQ?  I always thought that OTCBB stocks traded at a significant discount.  Would not a 10 PE be more appropriate before then?

No, my experience and study of hundreds of stocks doesn't show that discount in valuation regarding OTCBB traded stocks. They file the same SEC files as companies traded on national exchanges. In fact, I find most OTCBB stocks to be trading above what could be considered their "natural" or "average" multiples, maybe because they're usually very small companies so the growth potential is bigger.

Reviewing fundamentals:

• Market cap is $132 M.  Commerce Planet, Inc. (OTCBB:CPNE) is a publicly traded, internet-based media company. The Company offers online media products, lead generation services and direct marketing tools to its client partners. Commerce Planet offers an internet turnkey media solution through its network of wholly owned subsidiaries, which include Consumer Loyalty Group, Inc., Legacy Media Inc., OS Imaging, Inc. and Interaccurate, Inc.
• No dilution through the course of 2006 or expected going forward
• Balance sheet is strong, debt was reduced to $0
• Revenue grew from $7.34 M in 2005 to $27.4 M in 2006.
• EPS was $0.18 in 2006, which means the stock is trading at a trailing earnings multiple of 15.5. We don't know about 2007 EPS, but there's the possibility of extremely strong growth, as it happened in 2006

About that $5 M issue, we'll have to wait for the 10-Q, but CPNE doesn't need to fatten its net profit margin, it's very fat already. What the company needs now is strong revenue growth. That has been happening, according to January enrollment numbers.

When the news came out we saw that the numbers were below what I, Michael and others were expecting, so the stock sold off, instead of rallying like we hoped. This sell off has brought it to fairly attractive levels, because, with just a bit of growth CPNE.OB will easily earn $0.4 per share in 2007, and that should warrant at least a $8 price per share (the EPS number can be a lot higher).

The way I see it, there's no potential of dilution because the balance sheet is strong enough and insiders own a big chunk of the company, and with the projects and sales model these guys have on hand, the potential is huge. Sure, the stock can go down another 10 or 15%, but I'm prepared for that. I won't buy more because that can weaken my hands.

CPNE.OB can give the Main Portfolio (http://www.3stocksonfire.org/3stocksonfire.php) a 200% plus return in 2007 and I won't let go of that for as long as I'm convinced it will happen. I'm not going to sell if it goes down 10 or 15% and I won't sell if it goes up 20 or 30% either.

If all of this fails - that's always a possibility - and say, Michael Hill is arrested, the company goes bankrupt and the stock is delisted overnight, the Main (http://www.3stocksonfire.org/3stocksonfire.php) will lose 6.66%, that would be tough, but I'm always prepared for all possible scenarios, nothing can surprise me in the stock market. Considering and preparing for all possibilities, instead of building fear, increases confidence. I'm in control of the situation whatever happens. The market can't harm me, only I can harm myself. And I won't do it, I love myself too much LOL.

Be cool guys, level your exposure and consider using sound money management rules so that when you grow old you can say: "I was a successful investor. I beat that devil's game" >:D

Excellent post, David. You hit it on the nail saying that the key to have a strong hand is through strict money management!

Now a minor question: when you say you apply a fixed 6.66%, is it the 6.66% of your initial investment? or 6.66% of the current equity? Looking at that you have 12 positions and only 14.97% cash available, I guess it is the later?

I have a suggestion in terms of money management: how about selling a portion of position when it becomes too large? For example, SYX is currently 11.3% of the portfolio (it reached 12% at its height), shall we sell some SYX, say, when it becomes 15% of the entire portfolio? There are 3 justifications: for one, it can decrease the portfolio volatility; for two, when a position appreciates a lot, the upside potential becomes smaller (If the target for SYX is $60+, at $15 it was a 4-bagger but when it goes to $40, it "only" has 50% more to go ...); for three, you free up capital to buy other promising stocks.

Quote from: David Randolph on February 23, 2007, 05:08:15 AM

The path to "stronger hands" also has to do with managing risk. For example, I never average down or up. I always invest a fixed portion of capital in each stock,  in the Main (http://www.3stocksonfire.org/3stocksonfire.php)'s case, 6.66%. To be full invested I need 15 different stocks, it doesn't matter how much I like one or another. It is a simple money management rule that has kept me out of trouble - for example, yesterday CPNE.OB went down, as you're very well aware, 16%, yet the Main (http://www.3stocksonfire.org/3stocksonfire.php) went down a manageable 1.51%.

FYI, didnt see this on Yahoo yet, not big news.
 

SOURCE: Form 144

ISSUER: COMMERCEPLANET INC
SYMBOL: CPNE


FILER: HOLLOWAY CLIFFORD M
TITLE: Shareholder
BROKER: PENSON FINANCIAL SERVICES INC
RESTRICTED SHARES TO SELL: 100,000        DATE REGISTERED: 2/20/2007
APPROXIMATE DATE OF SALE: 2/21/2007

  The Form 144 is filed with the Securities and Exchange Commission to
  reflect the intention of any holder of restricted stock to sell those
  shares.  After the 144 is mailed to the S.E.C., the filer is permitted
  to sell the shares, or any fraction of them, within 90 days.

Form 144 Data Source: The Washington Service
                      ([email protected] or 301-913-5100)


  (END) Dow Jones Newswires

  02-22-07 2318ET

23:18 022207

tokyopua; I lost you.

How is Clifford Holloway the brother of CPNE CEO Michael Hill?

Quote from: webby67 on February 23, 2007, 10:58:12 AM
tokyopua; I lost you.

How is Clifford Holloway the brother of CPNE CEO Michael Hill?

I lost myself, lol.  Will edit that post. 

Here's a good outlook:

http://www.smallcapnetwork.com/scb/index.php?s=cpne

Nice, quiet, steady uptrend day for CPNE.

And we again held the 20 day MA line nicely (now at 2.79).

We got rid of a lot of "fast money" momo types yesterday (and yes that includes dear ol' David's 3stox fast portfolio holdings!!  :D)

and now the stock is in stronger hands who understand the story better and are patient to see the growth unfold (and that includes David's Main Portfolio holdings too  8).

Pretty soon, I'll betcha David will wish he'd kept the CPNE in the 3 stocks portfolio too...  ;D

Hey everybody!!! What would have CPNE have earned in net income if not for the expense of retiring that 5 million in debt?  Now thats worth talking about!!!!! ;)

Quote from: webby67 on February 23, 2007, 04:39:56 PM
Nice, quiet, steady uptrend day for CPNE.

And we again held the 20 day MA line nicely (now at 2.79).

We got rid of a lot of "fast money" momo types yesterday (and yes that includes dear ol' David's 3stox fast portfolio holdings!!  :D)

and now the stock is in stronger hands who understand the story better and are patient to see the growth unfold (and that includes David's Main Portfolio holdings too  8).

Pretty soon, I'll betcha David will wish he'd kept the CPNE in the 3 stocks portfolio too...  ;D

CPNE is still trading above 20 day MA, so we still see the sign of the bullish trend. But the MACD indicate weak bearish signal. And for the current trading volume, I don't think CPNE will be on fire againt shortly, but David just like David said, there should be no worries for long term.

It is time to look at our model again.

Any model is only as good as its predictive power and the Q4 results deviated quite significant from our forecast. The revenue forecast was in particular lower than expected (8.7 million against a forecast of 11.8 million).

With the benefit of hindsight it is quite clear what went wrong. My assumption about churn from their existing base going into Q4 was way off base. They already announced that they had 125,000  (http://www.integratir.com/newsrelease.asp?news=2130955996&ticker=CPNE&lang=EN) gross connections in Q2 06 and even though gross connections probably was lower in Q3 (as they made no announcement) you would expect above 100,000 gross connections in Q3 as well and unfortunately some of these new subscribers did as expected churn in Q4

To get a better feel for their business I have tried to estimate the average subscriber base for the last 2 years based on the reported revenue figures:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=33830;image)

Based on their different press releases we know approximately how many gross subscriptions they made in the second and fourth quarter of 2006 so we can now do some reverse engineering ::)

Basically the target is to find a churn pattern that gives an average subscriber lifetime of approximately 3 months and can explain the historical revenue and subscriber development. After a lot of trial and errors I found that the best assumption is that 60% of gross additions churn in the quarter they subscribe and the rest churn in the next quarter.

In the table below I have estimated the subscriber development historically and going forward. I increase gross connections with 5% per month going forward except for February 07 when it drops 5% (February has 10% less days so you would expect that gross connections would be lower):

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=33831;image)

As said before:

Quote from: Michael on February 17, 2007, 07:53:22 AM
The long term profitability can therefore be condensed to two factors:

• The company's ability to reduce churn
• The company's ability to replace churned customers

So it is not surprising that when we make changes to these; the result on the forecast is dramatic:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=33832;image)

EPS for 2007 is now expected to be around 57 cents. The sharp drop compared to previous forecast is mainly due to the lower subscriber base going out of Q4, which again is due to the churn from the subscribers added in Q3.

With 57 cents the forward PE is 5.12. I still think it is very cheap especially with the top and bottom line growth:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=33835;image)

Sorry for the probably pretty borrowing write up and especially the erroneous forecast for Q4.

For every adjustment I make to the model I feel better about its predictive power. The next crucial time is the earnings for Q1. There are beers for everybody in the Fish Market in Maputo if I am more than 2 cents of the mark  :D

Michael,

Thanks again for another in depth analysis!

Brad

great analysis Michael

I sold it at 3.43 and got in again at 2.95  I hope I'm not too greedy  ;D

QuoteNow a minor question: when you say you apply a fixed 6.66%, is it the 6.66% of your initial investment? or 6.66% of the current equity? Looking at that you have 12 positions and only 14.97% cash available, I guess it is the later?

Yes, the latter, 6.66% of total equity. The stocks held rose so the cash portion of the portfolio declined, so I really don't have cash available to put 6.66% of capital in three new positions now, just two or so.

QuoteI have a suggestion in terms of money management: how about selling a portion of position when it becomes too large? For example, SYX is currently 11.3% of the portfolio (it reached 12% at its height), shall we sell some SYX, say, when it becomes 15% of the entire portfolio? There are 3 justifications: for one, it can decrease the portfolio volatility; for two, when a position appreciates a lot, the upside potential becomes smaller (If the target for SYX is $60+, at $15 it was a 4-bagger but when it goes to $40, it "only" has 50% more to go ...); for three, you free up capital to buy other promising stocks.

I believe that isn't the right course of action, because, if the stock was up 100% it probably is because it has very attractive fundamentals, and it will probably rise another 100% with more certainty than a new pick (and even a $1 B market cap can rise 100 fold). If the weight of the stock on the Main (http://www.3stocksonfire.org/3stocksonfire.php) rises on the stock's own merits, I can't punish that stellar performer by reducing the Main's exposure to it. Let's call it my way of averaging up.

There's a better way to reduce SYX's exposure on the Main. Other picks rise faster, catching up. MSI did just that, it helped reducing SYX weight on the Portfolio ;)

But this is an open debate, we'll keep talking on the subject, perhaps on the Money Management discussion (http://www.3stocksonfire.org/trading/index.php?topic=8225.0) thread at the Member's Corner.

Quote from: tireslinger on February 23, 2007, 08:27:26 PM
Hey everybody!!! What would have CPNE have earned in net income if not for the expense of retiring that 5 million in debt?  Now thats worth talking about!!!!! ;)

Absolutely tireslinger, you're right. Without paying that $4.31 M in long term debt, CPNE's 2006 net income would have been not $8.7 M but $13 M, and then the trailing earnings multiple would be 10.6. Now there's no more long term debt, so just by this effect probably the 2007 number will be a lot higher than the 2006 net income.

Ahhh, Michael did all the work (and much better than I would do), so I can relax a bit ... thanks a lot !

He sees $0.12 EPS for Q1 2007, give or take $0.02 (or else I will fly to Maputo to get those beers :D). That should be enough to put CPNE between $5 and $6. Then we'll see what happens next.

It's a pity www.onlinesupplier.com has such a high churn rate, that will perhaps put a cap on valuation, because investors will fear that when they sell to all possible costumers, revenues will go down month after month, because the service is a pos. But I'm confident in management's ability to invent new internet business models, maybe with less churn rate.

For now, they have growing revenues, growing profits, a strong balance sheet and an attractive valuation, and that will put a floor on any dip. There can only be upside surprises at this stage in my opinion.

I'll continue holding CPNE with strong hands.

Quote from: tireslinger on February 23, 2007, 08:27:26 PM
Hey everybody!!! What would have CPNE have earned in net income if not for the expense of retiring that 5 million in debt?  Now thats worth talking about!!!!! ;)

Quote from: David Randolph
Absolutely tireslinger, you're right. Without paying that $4.31 M in long term debt, CPNE's 2006 net income would have been not $8.7 M but $13 M, and then the trailing earnings multiple would be 10.6. Now there's no more long term debt, so just by this effect probably the 2007 number will be a lot higher than the 2006 net income.

No, paying off long term debt does not reduce net income, it is strictly a balance sheet item, much as if you issue long term debt for cash flow purposes you do not report the proceeds as net income.  They will benefit from not having any more interest expense as a result of this, so net income will be higher in the future as interest expense decreases net income, but the payment of the debt itself did not have any impact on net income. 

[/quote
No, paying off long term debt does not reduce net income, it is strictly a balance sheet item, much as if you issue long term debt for cash flow purposes you do not report the proceeds as net income.  They will benefit from not having any more interest expense as a result of this, so net income will be higher in the future as interest expense decreases net income, but the payment of the debt itself did not have any impact on net income. 
[/quote]



I'm sorry Trex but, I am going to have to disagree with you on this issue Since the company stated that they paid the debt off with cash EARNED through the business in 06. If they had not of used that Cash flow to pay off the debt it would have drifted to the bottom line.
If they had of used cash that was already in the bank to pay that debt then it would not count towards the net income.
Interest expense will be reduced to nothing unless the company decides to take on more debt, but they really don't need to at this point because the company is generating cash on its own.

I agree with Trex.  The cash that CPNE used to pay long term debt had already "drifted to the bottom line."  CPNE simply used the cash generated and accounted for as "net income" to pay the long term debt.  As a result, cash on hand decreases, liabilities decrease, but net income remains constant.  There may be some expenses incurred in retiring the debt (accelerated interest, legal fees) that alter net income, however.

Question. What would the net income have been if they had not used the cash flow that the company was generating to pay of the debt?
For instance  I pay my bills each month from the cash flow that my job generates and each month I have money left over. Thats net income. If I have an unexpected bill show up that month then my net income would be less in that month because of the extra expense that is not a part of my normal household operations.

Why the big sell-off today? Did I miss something?

Might not this be those restricted shares coming to market??, as of the filing noted by tokyopua?

Today hurts.  I try not to look at daily fluctuations, but this is a big one from where I purchased over 3.

Quote from: trexkerry on February 26, 2007, 10:16:47 AM
No, paying off long term debt does not reduce net income, it is strictly a balance sheet item, much as if you issue long term debt for cash flow purposes you do not report the proceeds as net income.  They will benefit from not having any more interest expense as a result of this, so net income will be higher in the future as interest expense decreases net income, but the payment of the debt itself did not have any impact on net income. 

Hmmm.. I think David is doing too many updates these days or maybe we just misunderstood his comments. Anyhow paying off debt does not affect the bottom line short term and has in fact as trex rightly stated a positive long term effect.

Quote from: das317 on February 26, 2007, 12:44:52 PM
Today hurts.  I try not to look at daily fluctuations, but this is a big one from where I purchased over 3.

Yes this for sure is not one of the best days for CPNE shareholders. OTCBB stocks are notoriously volatile so what can go up 20% one day can drop 30% the next. So be sure to only invest what you can afford to lose and do your homework!

When that is said I still have a very good feeling about holding the stock. I think that the uncertainty that we are seeing the last couple of days have to do with some of the insiders selling stocks. I am always very suspicious when insiders sell stocks as nobody knows the business better than they do but you always have to put it in context. If I had started a business from scratch in my garage I would probably also like to see some cool cash after a couple of years. Now these guys sold a small percentage of their stock to an institutional investor instead of dumping them in the open market which tells me a couple of things:

First of all there are some serious money that are willing to invest in the company and second the management are concerned about the investors in the company. The timing of the sale is also quite understandable. The company has just delivered some outstanding results so this would be a time when there is enough buying interest to support the price even when insiders are selling.

I expect the company to post 12 cents earnings per share for this quarter and I am pretty confident in that forecast. This company's profitability really depends on the gross connections and we already know that they made more 90,000 subscriptions in January and even though February will probably be lower due to the fewer days in the month I don't see any reasons why the consistent growth in subscriptions wouldn't continue.

I am back in here at 2.35, the ascending trendline HAS to act as support.

I am not so sure.. this looks like massive insider selling and seems that there is not enough buying interest as people are questioning the story behind CPNE.. More and more reminiscent of CHID story :-(. I hope I am wrong because I too decided to ignore volatility (at least I am trying to :-)). 

Quote from: raspi on February 26, 2007, 04:07:57 PM
I am not so sure.. this looks like massive insider selling and seems that there is not enough buying interest as people are questioning the story behind CPNE.. More and more reminiscent of CHID story :-(. I hope I am wrong because I too decided to ignore volatility (at least I am trying to :-)). 

It was experiences like CHID and GV that led me to sell above $3, but recall that CHID was a chinese OTC stock that we really had little visibility into, there were deeper issues we didnt know about.  Plus, it got to be 2X its 50sma.  That was way extended.   CPNE right now is only 18 cents above its 50sma.  Also, its halfway down the weekly candle from beginning of Feb, which is also a possible support based on usual candlestick action.  Not to mention the ascending support trendline at about 2.32 as of tomorrow.  Also, there is the fact that the long term pattern was a classic cup and handle breakout.

I admit that even all this might not have been enough to get me back in the stock, but having both David and Michael so bullish on it as a long term pick, I couldnt resist getting back in. 

"It was experiences like CHID and GV that led me to sell above $3..."

Me too, although bought some at $2.78 on the last dip.  So, now I'm a long term holder. 

I have to believe, though, that this decline will be short lived.  There was a similar high-volume sell off in the middle of October from $1.80 to $0.97.  The fundamentals appear to be fine. 

Quote from: Michael on February 26, 2007, 02:56:44 PM

Quote from: trexkerry on February 26, 2007, 10:16:47 AM
No, paying off long term debt does not reduce net income, it is strictly a balance sheet item, much as if you issue long term debt for cash flow purposes you do not report the proceeds as net income.  They will benefit from not having any more interest expense as a result of this, so net income will be higher in the future as interest expense decreases net income, but the payment of the debt itself did not have any impact on net income. 

TrexKerry you are right and I was wrong. Net income is the same no matter what you do with it. I don't know what I was thinking. I guess that I just could not get past the part of them paying it with cash earned from operations. Thanks for setting me straight. I am not a rookie investor it just seems that way today. Sorry guys.  ???

David, Michael 

Not sure if I understand the concept of why we should not average down 3SOF stock picks. If you are think CPNE is a great long term pick and if a member just signed up today they most likely would start buying CPNE today along with the rest of the portfolio. My past experiences with averaging down were almost always negative...but the great investor Warren Buffet always waited to buy a great companies stock and lower prices....almost always waited for a correction....or a sell off on negative news.  The difference for me is in the past is I might have been buying more of a terrible company. Part of the reason for my membership is that you use a fundamental type of investing...something I was not that good with. I have more technical skills...which means I would have to trade for a living or basically be in front of the computer all day to catch the stock at the right price.

So the question is do we buy more.  ;D

I couldn't help myself... I bought at the close with a limit order for 2.39 and got filled for 2.35.  Maybe my luck is changing! as usually I'm the guy who buys at the top of the day only to see things sink toward the close. I'm hoping this was just sellers looking to lock in some good profits froms the high 1.00s and move on to (what they might consider) better things. David and others have outlined the fundamental reasons for ownership here and we need to stay focused on that untill they prove otherwise.

                                                              m

 ;D Just roll with the punches guy's!!! Tomorrow is another day. Today was just one day in a long line of days yet to come.  ;D

The volitility today was not uncommon for those following this pick, but what has me a bit worried is that both the Dow and  Nasdaq seem to be overbought with recent all time highs. With Greenspan's warnings earlier today and with further warnings on the subprime mortgage market not to mention oil and geopolitical concerns (Iran) I am looking at how volitile stocks such as CPNE.OB will continue to ratchet upwards with what looks like stormy weather ahead.

With this backdrop I sold 75% of my holdings today and I'll sit on the sidelines for a while. Call me a nervous Nellie, I don't care. I'm up nearly 20% YTD so I can sit back and wait it out and lock in profits.

I am curious as to why all the insider selling today on CPNE.OB. Makes me wonder if common shareholders like us are being kept out of the loop on something.

Quote from: capricho on February 26, 2007, 09:29:19 PM
The volitility today was not uncommon for those following this pick, but what has me a bit worried is that both the Dow and  Nasdaq seem to be overbought with recent all time highs. With Greenspan's warnings earlier today and with further warnings on the subprime mortgage market not to mention oil and geopolitical concerns (Iran) I am looking at how volitile stocks such as CPNE.OB will continue to ratchet upwards with what looks like stormy weather ahead.

With this backdrop I sold 75% of my holdings today and I'll sit on the sidelines for a while. Call me a nervous Nellie, I don't care. I'm up nearly 20% YTD so I can sit back and wait it out and lock in profits.

I am curious as to why all the insider selling today on CPNE.OB. Makes me wonder if common shareholders like us are being kept out of the loop on something.

Cant blame anyone for taking profits, and things are getting a bit tough out there. 

But can you elaborate on the insider selling?  I am not married to my shared bought today, and if there is some big insider selling I might bail yet again lol.

I got ahead of myself in assuming insider selling, but I do smell something wrong when the stock plunges so much with no news announcements and of course the first thing I think is insider selling, as Raspi above also alluded to.

I made a previous post about the fact that customers really don't have much good to say about the service that CPNE.OB engages in, and I, quite frankly, don't believe in supporting companies that have apparently little regard for its customers. One could argue that perhaps poor customer service is already factored into the stock price--as David had suggested was the case with PFSW--but for a long term prospect I'd rather support and invest in companies that treat its customers well.

And so having said that, I feel it would be refreshing for 3SOF to consider companies that not only have potentially high stock appreciation--for which we all know David is quite skilled at detecting--but have also adopted excellent customer service, and better yet, practice a triple bottom line business philosophy.

Just my $.02 worth

After taking a look at some of the products online supplier provides for selling on ebay. It seems it would be almost impossible to make a living selling these products unless you are selling an enormous amount. Some of the products they sample on there website for selling are things such as an ACER lcd screen with a suggested retail of $230 and they'll sell it to you for $203 or something. I looked up the same screen on ebay and saw it for$195, so how are you supposed to make money if you buy the product at a worthless premium plus online supplier charging you money every time you sell the item as well. And on ebay no one is looking to pay retail prices. Ebay is cluttered with discount prices because there are so many people starting there own online stores so as competition gets more fierce prices will continue to drop. So it looks to me like the costs are way to high through online supplier to run a legitimate business. They're are many other ways to make money with ebay businesses through wholesale jobbers though this involves your own shipping and finding inventory. Though the margins are way higher, im in the works of possibly doing an ebay store as well as sell locally with  gross margins of up to 100% +. The fundamental #'s for CPNE are looking great but im beginning to think they just have a good sales pitch. Living off of those one time subscribers. I mean 90k in January thats quite a bit. Who knows though, from briefly looking at the products and the prices they offer them to you for. They sell them to you for the  price ebay buyers would be willing to pay for it if not higher than what ebayers are wanting to pay.

While i was hot on this stock looking at the #'s and the business model is great. Though on the customer side it looks like a losing battle to me. And customer satisfaction is whats gonna make or break a business over the long haul.

Hmmmnnn Now what to do, Thinking of possibly buying some in the $2 area ;)

100%  :o yo fous, hit a brother up.

Quote from: pompano on February 26, 2007, 11:52:20 PM
100%  :o yo fous, hit a brother up.

Haha sorry Pompano,

This is a solo venture ;) Just something i want to do on the side to make a couple bux ;) I went to a trade show in vegas the other week to do some research and contact some suppliers. I'm stumped for time with a lot of other stuff goin on right now though with my other business and school. But eventually i'll likely go forward with it.

You and me both, GL.  8)

Lots of different perspectives here, its time for a chart when there is lots of conjecture and all else fails.

I bought expecting the simple trend line I have drawn to hold.  The trend line rises about $.02 per day, and should be about $2.31 tomorrow.  If that trend line is seriously breached I will rethink my position.

From the editor of the otcjournal:

Editor: "I am informed some stupid sellers filed to sell about 1 million shares under 144. Looking into it tomorrow. In my opinion, Q1 will be a blowout. I strongly recommend buying on this meltdown. "

Quote from: jmccar2 on February 27, 2007, 12:28:19 AM
From the editor of the otcjournal:

Editor: "I am informed some stupid sellers filed to sell about 1 million shares under 144. Looking into it tomorrow. In my opinion, Q1 will be a blowout. I strongly recommend buying on this meltdown. "

That OTC guy might be off by an order of magnitude, I posted earlier about the 144 form, it was only 100K shares, not 1 million, unless there has been others but I searched and didnt find any so far...  Here is my original post contents:

-------------
FYI, didnt see this on Yahoo yet, not big news.
 

SOURCE: Form 144

ISSUER: COMMERCEPLANET INC
SYMBOL: CPNE


FILER: HOLLOWAY CLIFFORD M
TITLE: Shareholder
BROKER: PENSON FINANCIAL SERVICES INC
RESTRICTED SHARES TO SELL: 100,000        DATE REGISTERED: 2/20/2007
APPROXIMATE DATE OF SALE: 2/21/2007

  The Form 144 is filed with the Securities and Exchange Commission to
  reflect the intention of any holder of restricted stock to sell those
  shares.  After the 144 is mailed to the S.E.C., the filer is permitted
  to sell the shares, or any fraction of them, within 90 days.

Form 144 Data Source: The Washington Service
                      ([email protected] or 301-913-5100)


  (END) Dow Jones Newswires

  02-22-07 2318ET

23:18 022207
------------------------------

That was quite a Humpty Dumpty fall. But I will suggest to stick with David's recommendation and strategy.

I'm sorry Tokyo, didn't see that before... You had it 1st!

Also, what about Efund or Dutchess dumping?

Does the bar on this chart seem to indicate a large institutional sell?

http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?ticker=cpne

Quote from: jmccar2 on February 27, 2007, 01:01:23 AM
Does the bar on this chart seem to indicate a large institutional sell?

http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?ticker=cpne

Better to look at a longer term picture, seems buys outweigh sells in the last month:

http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?t=CPNE&range=30&mgp=0&hdate=&x=18&y=15

Though honestly I stopped looking at Iwatch that much recently, though Livelife used to use it a lot...

Quote from: fous on February 26, 2007, 11:48:52 PM
Hmmmnnn Now what to do, Thinking of possibly buying some in the $2 area ;)

fous,

That area should be good for at least a technical bounce if it sells off that much, and given the fact that the selloffs on Thursday and yesterday were on the heaviest volume since August, 2006, and the fact that 1.92 is IN PLAY from the H&S Top breakdown, you might get it.

Math:

3.48 high

2.70 neckline (the more conservative of the 2.70 - 2.68 neckline)

3.48 - 2.70 = 0.78 points

2.70 - 0.78 = Target: 1.92 IN PLAY

Prior to the big move up on January 30 (David's entry/timing was excellent), the highs of January 8, 17 and 29 were 1.92...1.92...1.92, so former resistance "should be" support if it sells off that much.

CPNE is down almost 32% in just 4 days, so a re-test of that broken 2.70-2.68 neckline should be expected.  Anything above 2.70, the 1.92 target goes ON HOLD.

Good luck if you play it.

There are so many great posts on this thread I don't know where to begin.

Let's see ... the net income/debt payments issue is solved, Michael and Trexkerry were right, I and tireslinger were wrong.

As for yesterday's sell off, I have a plausible explanation, as I've read several books on Hedge Fund's trading strategies. JLF Asset Management had those 3,037,500 shares bought at $1.90 that he couldn't sell. So what do you do when you can't sell but want to book a secure profit?

You hedge your position by selling the stock short. Most hedge funds are not interested in big directional gains, they look for small but certain profits, that's why they're called "hedge funds".

I also worry about the issues raised by fous and Capricho. The costumer churn rate is so high that we know CPNE's service, specifically www.onlinesupplier.com service, sucks. It couldn't be any other way around, because the sentences they have on their homepage are so strong that almost everybody will feel disappointed later. The churn rate is so high that we could say CPNE.OB doesn't sell a subscription based service, but a one time show service, because almost everybody cancels it before the month is over.

So the question is: how many suckers are outthere that don't understand they can't set up a successful e-commerce business paying just $50 a month?

The answer is: dozens of millions

Everybody I talked to was interested in subscribing the service, in trying to get out of their miserable jobs or getting some extra chips of income at the end of the month. They believe in most of the things they ear, they think it is so easy to develop a business, they believe they just never had that "go for it" attitude ::)

Here in Portugal there's a company (it probably has operations in the US too), which sells a vacuum cleaner for $2,000 a piece. It's almost unbelievable, but because of the way they sell, almost everybody buys it! (of the 4 million or so families in Portugal, I guess about 3 million suckers bought it!).

Do costumers feel satisfied after they bought it? Well, most of them just hide the miserable thing, but some complain ... despite that, is that vacuum cleaner marketing company an awesome business? Of course it is!

The thing one needs to see, in my opinion, is that CPNE.OB now has quite a strong balance sheet (hence there's no need or motive to dilute shareholder's value) and it is a growing and very profitable company. They have several other projects beyond www.onlinesupplier.com which will probably replace it when there are no more fools around ... but that can be years from now.

For now, as Michael says, this company is about to make at least $0.5 EPS in 2007.

I'll continue holding CPNE.OB.

(just one more thing that I forgot: no, you don't buy more. I can be wrong. Risk control/diversification is the most important thing for long term successful trading. I have a 6.66% of capital position in CPNE.OB like I initially do in all other stocks that I buy (actually in this case it is just 6% of the Main (http://www.3stocksonfire.org/3stocksonfire.php) now, because other holdings rose, so CPNE's weight declined). No more and no less.)

Sorry for the language used on this update, I didn't meant to go overboard like that, I guess I'm also a bit nervous about holding CPNE.OB, since it is such a controversial stock.

This is why I urge everybody not to take too much exposure to this stock, it has huge potential, but risk is also quite high. CPNE.OB is the only OTCBB traded stock on the Main (http://www.3stocksonfire.org/3stocksonfire.php) and I expect the Main to keep out of that type of stocks.

This is a high reward/high risk type of trade, keep that in mind.

For the next updates I'll take a look into all other websites and businesses of the company, to see if over the longer term there's the possibility of it overcoming the problem of the very high churn rate of www.onlinesupplier.com.

David, please take a look at:

http://www.alexa.com/data/details/traffic_details?url=www.onlinesupplier.com

This is very disturbing... could it be that, words traval fast on internet, people are fed up with them already?

onlinesupplier.com
Avg. Review for onlinesupplier.com:
Traffic Rank for onlinesupplier.com:  9,179

That traffic rank is still great....in the top 10,000 out of over a Billion websites.

My understanding, though, is that traffic has dropped in February compared to January..Can anyone substantiate?

Quote from: jmccar2 on February 27, 2007, 10:53:14 AM
My understanding, though, is that traffic has dropped in February compared to January..Can anyone substantiate?

It did drop compared to Januaury.  But it was up compared to July through October.

http://www.alexa.com/data/details/traffic_details?url=www.onlinesupplier.com

You need to check the correct timeframes just as in stocks.

Its traffic rank is not all that impressive, I know of a 2 person company that had a 9000 rank at one point, and there are 1 man operations out there with better traffic.  What was impressive however was their ability to monetize traffic, as per what we saw in all the models in this thread.

I sold CPNE for a small loss at 2.29.  Not because of Alexa data, just that I dont know what to think about this stock anymore, and because it dropped below my carefully constructed trendline.  Also the H&S scenario Melf pointed out was something I totally didnt look at (applaud Melf)...

Thoughts from a newbie:

While the traffic to onlinesupplier looks like it dropped significantly in the latter half of Feb. (which could be due to the somewhat seasonal nature of this market) and the churn rate is probably pretty high and rapid, it looks as though investinginsuccess could be coming online nicely to boost profits. The web traffic seems to have picked up with this latter site and my bet is that the churn rate and frequency with this foreclosure/property acquisition site is lower. The profit margin could be higher as well.

I have confidence in this management group to keep finding lucrative niches and longer lasting customers. I think eventually they will hit their stride with several profitable markets that have staying power.

Baptism by fire: I'm heavily invested in CPNE (at 2.90!) despite my better sense and David's warnings to evenly distribute among all stocks in portfolio (next time I'll listen better :o). Needless to say, I've been walking on pins and needles for the last couple days, but I faced my inner demons and my view is that I'm going to stay long. It's not because I have to lock in a loss if I sell or that I don't believe that some of the projected earnings calculations may have extrapolated too much on what may be perhaps a seasonal and ephemeral growth trend, but because I have confidence in this company.  8)

Now if there's anymore 144's filed I may reconsider this :)

With CPNE.OB I've learned that strong revenue and profit growth is important, that a fat net profit margin is important, but that's not all.

For the market to attach a high valuation to a stock of this type on a sustainable basis the company also needs a long term sustainable business model, not something based on a greater fool type of thing.

As realcoolhead warned, maybe in this fast information age, consumers get educated must faster and there aren't as many fools around anymore as I thought (perhaps I was defending a mental position given by my position in the market).

Anyway, I recommended this stock at $2.08 on the Fire Portfolio, sold at $3.2, and recommended it for the Main at $2.30, so I'm losing just 3% on this trade. I feel sorry for all that bought higher and have a loss, but you know, the stock market is a risky game, there never are certainties, unfortunately ???

I'll keep the stock under radar. I'm interested in seeing for how long they can keep www.onlinesupplier.com selling the way it has been selling. I'm also interested in seeing management's ability to create new revenue streams.

I'll try to sell it on a rally towards $2.30 today, I feel there will be one after the open, perhaps a strong one, as the stock touched the 50 days SMA support. But I'll make sure that I'll sell it on the first hour of trading.

David.  You are selling some of your best picks at bargain prices.  I know that yesteday's sell-off was bad, but the sell-off had nothing to do with valuation.  Most people attribute the sell-off to "rumors" that the Chinese government was going to impose capital gains taxes as a way to minimize "speculation."  Turns out that the rumor was false.  The markets are poised to recover.  There's still time to cancel your sell orders. 

I must agree with budjas.. David has been emphasizing patience and cool head in stocks holding for past 6 moths and than after one day of major decline he decides to close all his positions no matter how much he liked the fundamentals.... If 3SOF members did not sell their positions in CPNE this morning we could have been at $3.. But I still very much enjoy this rebound  :)

For David to be this reactive and fearful of the market makes me think something is going to go down... I am out today on all long positions on the market. We are now trading only up +50 dow and +8 on nasd... If this was a true strong rebound we should of seen trading over 150 and a close above +100 but its not looking like thats going to play out.

Time will tell if David is right...My experience here is that he is quick to make these decisons...right or wrong.  As he often says, the market will tell him if he made the right choice.

Me?  I sold all my long positions except SYX, WCG, and CPNE.  I'm on a hair trigger with them though...  I also have a couple of pennies that I've had for awhile. ..small positions.  Only reason I didn't sell CPNE was that it bounced early.

After five years of investing, the one thing that I have learned is protection of capital is paramount.  You can't go wrong in cash, you won't get rich but you d*** sure won't lose your $$.

SYX and CPNE were the one's I planned on keeping as well with a stop, but before I knew it, my low sell orders executed... CPNE went while I was upgrading the order! Well, I gave in all my profits between May and August 2006, so no I'd rather stay out until an opportune moment shows up.

OUCH...52k worth of CPNE sold at 9:31 AM for 41k. Now, in after hours trading, it's worth 46.5k  >:(

Quote from: jmccar2 on February 28, 2007, 07:51:56 PM
OUCH...52k worth of CPNE sold at 9:31 AM for 41k. Now, in after hours trading, it's worth 46.5k  >:(

Well I sold mine this this afternoon....and I'm glad I'm out for now. 

CPNE has a lot of overhang above; it probably will not go above the 9ema anytime soon.   I also belive the market will have another pretty good plunge soon.

Thanks for that. I'm glad you watched the market a bit and were able to maximize your exit. As I watched the market seem to stabilize and perform in some cases  ;), I decided to leave my money in OFI-- I thought a safer bet, but now there seems to be a new rash of insider selling here...It's clear to me that Estes is liquidating his entire stock and the more I look, the safer (even) CPNE looks to me now. I am getting a crash course in the value of diversification  :)

Form 10KSB for COMMERCE PLANET

http://biz.yahoo.com/e/070301/cpne.ob10ksb.html (http://biz.yahoo.com/e/070301/cpne.ob10ksb.html)

$.20 for the year.  Awesome.  This will be back to $3 tomorrow.

Quote from: buddjas1 on March 01, 2007, 09:24:49 PM
$.20 for the year.  Awesome.  This will be back to $3 tomorrow.

I sure hope you are right. I still hold a nice position in this and would love that type of a run.

Any comments on this new SEC filling guys?
COMMERCEPLANET, INC. OFFERING UP TO 11,893,500 COMMON SHARES
http://www.integratir.com/cfiling.asp?theurl=filing%2Ephp%3Frepo%3Dtenk%26ipage%3D4749345%26doc%3D1%26total%3D90%26source%3D817%26&ticker=CPNE&lang=EN&alt=&title=

Quote from: raspi on March 16, 2007, 06:22:20 PM
Any comments on this new SEC filling guys?
COMMERCEPLANET, INC. OFFERING UP TO 11,893,500 COMMON SHARES
http://www.integratir.com/cfiling.asp?theurl=filing%2Ephp%3Frepo%3Dtenk%26ipage%3D4749345%26doc%3D1%26total%3D90%26source%3D817%26&ticker=CPNE&lang=EN&alt=&title=

I admit I didnt look through the whole doc, but just picking out this bit it looks like potentially a 7.5% dilution of the stock by comparing current outstanding shares to proposed outstanding shares:

   
Common stock outstanding as of March 6, 2007
 
50,106,252 shares
 
Common stock to be registered
 
7,987,500 shares

Common stock underlying warrants to be registered
 
3,906,000 shares

Common stock to be outstanding after this Offering
 
54,012,252 shares


Im not in CPNE, but hope I am wrong somehow for the sake of those still in it.

what's worse is that all the institutions that bought LAST MONTH are already bailing.  I see this falling maybe to 1.50 next week.

Quote from: buddjas1 on March 16, 2007, 10:49:45 PM
what's worse is that all the institutions that bought LAST MONTH are already bailing.  I see this falling maybe to 1.50 next week.

Hmmm.... I wish you were right that would be a great buying opportunity but I do think you are a bit too pessimistic here:

As you can see in the slide below Outstanding shares have gone down from 66.1 million in the start of 2006 to now 54.0 million. Not bad for a penny stock  :)

The registration of the stock was already agreed at the time of the sale of the shares:

QuoteThe closings for both transactions are expected to take place, subject to customary conditions, the week of February 12, 2007. The Company has agreed to register the resale of the shares sold in these transactions.

So this SEC filling is not a surprise. The registration of the shares gives the institutional investors the opportunity to sell the shares in the open market but it doesn't mean that they will sell them. I personally find it hard to believe that they bought the shares for $1.9 last month and will sell them this month at prices down to $1.5  ::)

As said I hope you are right. I for sure wouldn't mind adding shares on any significant dip  >:D

I agree with Michael, this does not mean that they will sell. It's hard to believe that they would sell 7 cents above the price they got in. It reminds me of XING.. their investors were selling at least 100% above their initial entry point.

Quote from: Michael on March 17, 2007, 02:54:03 AM

Quote from: buddjas1 on March 16, 2007, 10:49:45 PM
what's worse is that all the institutions that bought LAST MONTH are already bailing.  I see this falling maybe to 1.50 next week.

Hmmm.... I wish you were right that would be a great buying opportunity but I do think you are a bit too pessimistic here:

As you can see in the slide below Outstanding shares have gone down from 66.1 million in the start of 2006 to now 54.0 million. Not bad for a penny stock  :)

The registration of the stock was already agreed at the time of the sale of the shares:

QuoteThe closings for both transactions are expected to take place, subject to customary conditions, the week of February 12, 2007. The Company has agreed to register the resale of the shares sold in these transactions.

So this SEC filling is not a surprise. The registration of the shares gives the institutional investors the opportunity to sell the shares in the open market but it doesn't mean that they will sell them. I personally find it hard to believe that they bought the shares for $1.9 last month and will sell them this month at prices down to $1.5  ::)

As said I hope you are right. I for sure wouldn't mind adding shares on any significant dip  >:D

Michael, I remember in February on this thread when we were calculating shares outstanding it was less that 50K, I posted that it was 47.3 at the time.  So isnt this dillution compared to recent levels?

Hi Tokyo,

Quote from: tokyopua on March 17, 2007, 11:17:23 AM
Michael, I remember in February on this thread when we were calculating shares outstanding it was less that 50K, I posted that it was 47.3 at the time.  So isnt this dillution compared to recent levels?

I think there have been some confussion in this thread about outstanding shares and fully diluted share count.

The chart is looking very nice today  :)

I wonder if there is any hope for this one... Company stopped issuing their PRs.. Share price keeps falling.

I'm still watching this one. My question is, Will this fall to the $1.50 level? Or is this a retest of these levels? Micheal,any thoughts? thanks.

looks like CPNE could be close to a rebound level here, I think it should see support  at 1.65-67, but it would be nice to see a reversal candle at these levels.  Michael seems to be pretty keen on the fundamentals here (and having a look at them, I have to agree - I'm really not quite sure what the fly in the ointment is, unless its dilution - I see there was some in February, and there was siginifcant dilution between 05 and 06).  In any case, the share price is below the level of instituional purchase in February, which, provided they didn't just go and sell all the shares in the open market, should mean that they considered this "good value".

The only other thing to consider is that CPNE did go up over 10-fold in the last year, which is really a pretty astounding run when you think about it, so to see a 50% pullback from its highs last month, while dramatic, could also be seen as reasonable.

I think you could probably get away with an entry here and a stop around 1.55 (or more conservatively at 1.43, below the 200MA).  That still leaves about 10% risk from an entry at this level, but considering the upside potential, this isn't so bad.  Still, it would be nice to see some signs that it has found support at this level before making an entry.

A stock like this i watch with no intention of buying.But,if it becomes apparent even to me that it's oversold,i might nibble, and if it starts going up,then i buy more. If that's a seat of the pants way of doing things,so be it. A stock i'm in now is IAAC. Watched it go down down down. Now it's going up up up. I bought before it bottomed and after. Takes weeks or months. Just so it's profitable.

There's $1.50. Now do I buy?

I bought a little.. expecting a bounce of MA200 as everybody.. I even saw alerts on CPNE on some yahoo message boards

news out. and a good one
http://biz.yahoo.com/bw/070402/20070402006353.html?.v=1

CommercePlanet Provides Stock Repurchase Program Update
Monday April 2, 4:59 pm ET

GOLETA, Calif.--(BUSINESS WIRE)--CommercePlanet, Inc. (OTCBB:CPNE - News) today provided an update on the Company's stock repurchase program. As of today, the Board of Directors has purchased approximately $1,000,000 of the Company's outstanding common stock pursuant to its stock repurchase program.

The Company has been making open market repurchases of its open stock since the inception of the program in November 2006. According to the program, CommercePlanet may repurchase up to $2,000,000 of its common outstanding stock through open market or privately negotiated transactions at prices deemed appropriate by management. The timing and amount of repurchase transactions under the program depend on market conditions and other considerations and are made in compliance with applicable federal and state securities laws and regulations. The purchases are funded from available working capital. The stock repurchase program will be effective through December 31, 2007.

"This stock repurchase program is an indication of the tremendous confidence we have in the strategic direction of the company and our ability to execute on our operational plan in the longer term," stated Michael Hill, Chairman of the Board and Chief Executive Officer. "We believe that at our current stock price valuation, continuing this program makes good sense and sends the message that we feel the market does not yet fully appreciate the opportunity that CommercePlanet affords."

Membership Growth and Quarterly Guidance

In addition, the Company announced today that, effective with the quarter ended March 2007, the Company will replace monthly and quarterly membership numbers that it had previously reported with more relevant quarterly financial guidance. "CommercePlanet has continued to grow and at this stage in our development, we believe it is important to structure the financial metrics we provide to shareholders so that they have the most meaningful information about our Company," said Mr. Hill.

Nice buy Raspi. Very timely. I'm still watching.

nice bounce back  ;)

--------------------------------------------------------------------------------
Had been on my screen of "quotes" and noticed a nice gain today.  May be time to watch this one closer.

 

http://biz.yahoo.com/bw/070412/20070412006045.html?.v=1

I think we are OK  :). This should soon go to $4  >:D

Commerce Planet, Inc. Provides Preliminary First Quarter 2007 Financial Results
Thursday April 12, 6:38 pm ET

GOLETA, Calif.--(BUSINESS WIRE)--Commerce Planet, Inc. (OTCBB:CPNE - News), an online media company, and its wholly owned subsidiaries today reported preliminary operating income and revenues for the first quarter of 2007, ended March 31, 2007.

ADVERTISEMENT
The company expects operating income, including non-cash items of $0.5 million, to be $4.1 million for the first quarter of 2007, up approximately 650% from operating income of $0.5 million for the same period in 2006. Consolidated revenue is expected to be approximately $13.0 million for the first quarter of 2007, an increase of 230% compared with $3.9 million for the same period in 2006. These financial results are based on preliminary financial data and are subject to the final closing of the Company's books and records.

Michael Hill, CEO of Commerce Planet, stated, "This quarter we saw the positive impact of the infrastructure build out over recent quarters and the solid execution of our corporate strategy. Our cash operating income, excluding the non-cash expenses of $.05 million, equates to $4.6 million for the quarter. Looking ahead, we believe we have put the building blocks in place for continued growth as we expect to benefit from organic growth as well as from expansion opportunities, which we continuously explore as part of our long-term growth strategy."

I nevered bought this,but keep it on my radar. Why is it selling off like this? Sell on the news?All the earnings priced in? A return to $1.50? Stay tuned>

I sold at $2.3 but I don't understand this stock at all.... If I did investing would be much easier.. I think this continuous selling pressure into any kind of news must indicate more dilution.

I expected the sell off.  I usually don't hold thru earnings so I sold most of mine at about 2.13 and then the remainder today at $2.33.

The earnings was not that great and most investors in CPNE are looking for a short term profit.  I'm a little nervous about the monthly churn rate and whether earning will continue to grow.

P.S. The DowJones & Nasdaq have major NEGATIVE divergences at right now. They are both at the top of their channels (rising wedges).  I think the market will sell off so I am completely in cash now. Please be careful....

This is how I see CPNE on the chart.
Any comments?
Please let me know if I charted it incorrectly.

"The earnings was not that great and most investors in CPNE are looking for a short term profit."

I agree that many traders may be looking for short term profit in CPNE, but I disagree that the earnings were not that great.  They'll probably be in the 10 cents range again.  We're going to have in the range of 30 cents EPS.  The dropoff hasn't occurred like many expected. 

This is a sketchy stock though.  Sure wish I took some profit above 3.  Still holding from basically the current levels before the run, sold half for small loss.

fyi:
Commerce Planet Reports Preliminary Revenue & Operating Income for the 2nd Quarter of 2007
Monday , August 06, 2007 08:33ET

GOLETA, Calif., Aug 06, 2007 (BUSINESS WIRE) -- Commerce Planet, Inc. (OTCBB:CPNE) today reported preliminary revenues and operating income for the second quarter of 2007, posting the sixth consecutive quarter of profitability. Revenue for the quarter ending June 30, 2007 is expected to be in the range of $10,500,000 to $11,000,000, an increase of 48% to 55% from revenue of $7,086,818 for the same period in 2006. Year-to-date revenue is expected to be in the range of $23,750,000 to $24,250,000, an increase of 116% to 120% from revenue of $11,019,161 for the same period in 2006.

Operating income for the quarter ending June 30, 2007 is expected to be in the range of $1,900,000 to $2,100,000, compared to $2,475,588 for the same period in 2006, reflecting additional costs incurred as a result of poor quality sign-ups during the first quarter of the year. Year-to-date operating income is expected to be in the range of $6,000,000 to $6,200,000, an increase of 100% to 105% from operating income of $3,010,175 for the same period in 2006. The Company's complete financial results can be viewed in its Form 10-QSB filing for the quarter ended June 30, 2007.

"We are pleased with our preliminary results for the second quarter, which reflect the success of our initiatives to increase the quality of our sign-ups and position the Company to become a leading online media company," said Michael Hill, Chief Executive Officer of Commerce Planet. "During the second quarter of 2007, we reduced our advertising spend to focus our marketing investment in areas that provided higher quality sign-ups. This strategy was to offset the increase in poor quality sign-ups we, and the industry overall, was experiencing in the first quarter of the year. While membership revenues were sequentially lower during the second quarter as a result of our lower advertising spend, we did generate significant income and will have more than doubled our revenue and nearly tripled our income for same period, last year. Additionally, we believe we have re-established a better quality revenue stream and thus positioned ourselves for more sustainable long-term growth."

Mr. Hill continued, "As a consequence of the lower-quality sign-ups in the first quarter of the year, we did experience a higher than normal return rate and chargeback rate during the second quarter which negatively impacted costs. Despite the higher return rate, gross revenues are still expected to have increased 48% to 55% in the second quarter year-over-year. It is also important to note that on a six-month basis, both net profit and EBIDTA margins are expected to improve, thus validating the strength of our business model. In addition, our financial position remains strong with a debt-free balance sheet."

President Charlie Gugliuzza added, "During the quarter we strategically refocused the Company on lead generation and data acquisition by launching new web properties, expanding our Costa Rican call center and augmenting our customer tools with White Email Deployment Network. Also, subsequent to the end of the quarter, we expanded our marketing efforts in video ad serving and lead generation through the launch of MyFlick.com. These initiatives will further strengthen our competitive advantage as we continue to transform Commerce Planet into a leading online media company. Furthermore, we have taken action to help qualify the customer leads at the point of acquisition by implementing a series of customer verification tools."

Moving up with volume, squeeze on :)

bought today...this will go wild....good news today...chart ready firework if we break 0.96