3SOF

1. Profile

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

2. Technical Analysis

2.1. Long Term Chart



GZFX had a huge run in 2003 and 2004. Since then it collapsed to prior levels. Penny stocks work a lot like this.

2.2. Medium Term Chart



The stock had another bullish streak in October and November, but since then it is trending down. If history is any guide it will come back down to previous levels around $0.0020 (it is trading at $0.0071 now).

2.3. Short Term Chart



With so many spikes (bad fills) it is hard to know which price was really traded and which wasn't. Anyway, this is an extremely volatile penny stock, with enough volume too (well it trades about $1,000,000 a day, enough for me to trade $1,000  ).

The problem is the stock is trending down. Usually penny stocks have a bull run from time to time (with years between them) and GZFX just had its run 

3. Fundamental Analysis

3.1. Number of Shares Outstanding

Unfortunately my fundamental data service doesn't cover GZFX. But reading their 10Q forms with the SEC I find that the company had 771,801,665 shares outstanding in March 28, 2005, 925,001,665 in June 30, 2005, 1,205,868,867 in September 30th and an outstanding 3,291,733,490 shares in December 31st 

This tells me the company always sells shares in the open market when there is volume. And get this:



3.2. Working Capital

I don't have data on this, but at the last 10Q report, the company had 7,504,741 in total assets and just 462,332 as total liabilities, so it may continue operations for, at least, some time.

3.3. Revenues

In the four 2005 quarters, revenues were: $161,773 on the 1st quarter, $243,982 on Q2, $130,607 on Q3 and $139,929 on Q4, for a total of $676,291 in 2005. Business doesn't seem to be growing lately.

3.4. Net income

In the four 2005 quarters, net income was: ($816,010) on the 1st quarter, ($844,689) in Q2, ($1,223,535) in Q3 and ($1,355,298) in Q4, for a total of ($4,239,532) in 2005. Net losses are going up 

4. General Overview

Unfortunately I think this company won't survive for long. Revenues may grow some, but in the long term technological advances will probably kill this business model. I think it would have been a great business some years ago, but now ... just think of these two factors killing any kind of video rental business:

1) Now we can download movies from the internet
2) DVD prices are coming down fast. It isn't all that much more expensive to buy a DVD movie than to rent one. Why rent if I can buy for almost similar prices? (prices may be similar in the future, if current trends continue).

This is why MOVI, BlockBuster, NetFlix and ultimately GZFX.OB shares are collapsing. These companies probably won't survive in the long run with current business models. Video movie rental business is probably dying.

So my recommendation is to avoid this group of companies, for as long as they keep their current business model.

I agree 100% on your GZFX analysis. I posted a while back (to one of the GZFX threads) about the toxic financing deal that potentially requires GZFX to issue an unlimited amount of shares to Golden Gate. One to steer well clear of in my opinion as there are many better risk reward plays out there.

You are correct.  I understand and respect the comments based on simple analysis.

Do you think Circuit City would partner with a failing business model? Or perhaps, GZFX will be purchased.  Circuit City has done much dd to allow them as a partner. 

This is a play on the news coming.  All of this will happen within weeks.

GZFX will make a nice run, imo.  Downside is limited near term as the Circuit City anticipation will hold it up.

** This is a trade and not an investment.

David,

Your comments from a short time ago.  You titled the thread, GZFX- LOVE THE CONCEPT.

What has changed ?  You confuse members at times.

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

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

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

The company already has revenues:

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

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

It's current market cap is $7.59M.

A couple of weeks ago this news was out:

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

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

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

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

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

Again, this is a trade.  The worst possible news is factored in at this time.
Short term, a deal with Circuit City is worth much more than todays level.

You are missing the point looking at it as a long term investment.
I am a trader.  And I think this will double from here before March 15th.
Limited downside as the Circuit City anticipation will give it support, imo.

GZFX is in much better shape (6 Million in Cash) than when it struck the deal with Circuit City.  Circuit City is the # 2 USA retailer of electronics behind Best Buy.  They have plenty of companies trying to get in with them.  Ask yourselves why they chose to partner with GZFX if the company was in trouble. 

Check back here into March.  A string of positive news is about to hit.
This company is 110% further along than when it was 15 cents.  Yes, more dilution, and that is why I say it is a great trade from here with a Short term target of March.

You will soon see why they filed the 10K early.  And you will see why a Eurpoean Investor recently paid 3 cents per share.  Sometimes you need to look beyond the numbers.

No need to comment further.  Let it play out to March.

If I am wrong, I will gladly admit it.  And I will wear the 3SOF T-Shirt everyday for a year. (wash it of course)   

QuoteDavid,
Your comments from a short time ago.  You titled the thread, GZFX- LOVE THE CONCEPT.
What has changed ?  You confuse members at times.

That is a valid question/comment.  I think it would be more confusing to new members, since it takes a few months to understand the intricacies of the mind of "The David." In a nutshell, David changes his opinion frequently on stocks or the market in general as new information presents itself. I think this is a good thing. David is pretty good at listening to what a stock or the market is telling him and adjusting his plan accordingly. Though I can understand how it will cause confusion at time. Fill, your GZFX example is nothing next to David's seesawing on his market sentiment LOL . Here's the anthology:

"I think the general market is entering into Bear mode, something that can take it down more than 40% over the next two years." - Jan 3

"I really feel there isn't much upside on this market and the smart money is distributing shares to the general public. We are on a distribution phase, making a top for a steep decline after all the seasonal buys are out of the way." - Jan 5

"Basically, I was wrong and Metro, willey, and other folks, were right. The market took off to the upside and never looked back, closing Friday at new highs." - Jan 8

"After Friday's big sell off, I'm starting to think that maybe I wasn't wrong on my end of the year article (Riding the Storm)" - Jan 23

"We're definetely in a bull market" - Feb 9

LOLOL  (so I save all the 3SoF daily updates, ok?)!

David,

It is amazing how you completely changed views from your original writeup saying GZFX-LOVE THE CONCEPT.  Forget the stock, you raved about the concept.  Now the concept is going to fail ?

True, Video On Demand is the next wave.  The rental companies you listed will remain due to cost.

And they will adapt to the new VOD future.  But VOD will cost alot per game or per movie.  So the concept remains a valid business.

Who wants to pay for a game that may cost $ 60.00 to find out that they do not like it ?

This is the beauty of unlimited rentals.  Or pay for a DVD and upload fee for each movie ?  People are typically not watching movies on their PC's, so the transfer will have to take place.  A cable provider cannot possibly pay licensing for every release at this time.  And you saw firsthand what happened to a Previous 3SOF pick IFLB.  It is too expensive for the copyrights.

But most people are not ready to download movies, burn them to a DVD and then view.  It would cost much more than a $ 9.99 monthly unlimited to do it anyway.

And you also get into Copyright laws.  It gets very expensive for the rights.

So VOD is much further in the future.  GZFX is getting ready for it though.

And if this is all so obvious, why is Circuit City choosing to partner with little old GZFX ?
Press Release Source: GameZnFlix, Inc.


GameZnFlix, Inc. Signs Lease for Its Own Proprietary Channel to Be Broadcasted via Satellite
Tuesday January 17, 9:30 am ET


FRANKLIN, KY--(MARKET WIRE)--Jan 17, 2006 -- GameZnFlix, Inc. (OTC BB:GZFX.OB - News), an online provider of DVDs and video games for rent or purchase, plans to launch its own proprietary channel on IntelSat America 5, a satellite transponder aimed toward Ethnic, Christian, Military and other communities in the United States. The new video/movie channel -- a collaboration between GameZnFlix and Hit Media, LLC, a Florida-based marketing firm with roots in the satellite and video distribution industries -- will primarily serve as a marketing tool to millions of viewers in the U.S., Canada and the Caribbean.
ADVERTISEMENT

Flowers Jewelry Lingerie 
Electronics Chocolate Game Consoles



The satellite delivery model -- provided by Pittsburgh International Telecommunications, Inc. -- will also serve as a GameZnFlix's download station to those same customers.

CEO John Fleming, GameZnFlix, Inc., stated, "This is the first step towards our company moving into the direct download to personal entertainment systems across the United States. We have been working closely with Pittsburgh International Telecommunications, Inc. and Hit Media, LLC over the past year on this project. We are pleased to make this announcement."

Al Stem, CEO, Pittsburgh International Telecommunications, Inc., added, "The timing of this service offering is good. Consumer demand, satellite technology and environmental economics all seem to be lining up favorably. Pittsburgh International Telecommunications, Inc. is excited to be a part of its launch. We're excited to be a part of this pioneering content-delivery innovation with both GameZnFlix and Hit Media."

GameZnFlix is a company that offers video games/DVDs for rental or purchase on the Internet with access to over 40,000 titles. With four different membership levels beginning at $8.99 a month to annual membership with an average price of $20.75 per month, subscribers can rent a combination of both video games and/or DVD movies with no late fees or due dates or members can purchase video games and/or DVD movie titles at a membership discount.

Pittsburgh International Telecommunications, Inc. is a leading provider of direct-to-home broadcasting services for ethnic, religious, medical and business channels from around the world. Within this market, Pittsburgh International Telecommunications, Inc. delivers a wide range of programming that targets international communities in the U.S. and the Caribbean. These networks broadcast educational programs, news, sports and movies.

Pittsburgh International Telecommunications, Inc. continues to expand its scope of services to a growing customer base including, but not limited to, enterprise customers, major international telecommunications carriers, television networks, government agencies, and universities. Video Services include uplinking and downlinking to major networks such as ABC, CBS, CNN, ESPN, FOX, MSNBC and NBC as well as numerous individual stations and businesses. The Company provides voice and data services between the U.S. and a number of countries in South America, Europe and Africa.

Certain statements in this news release may contain forward-looking information within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. All statements, other than statements of fact included in this release, including, without limitation, statements regarding potential future plans and objectives of the company, are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Technical complications that may arise could prevent the prompt implementation of any strategically significant plan(s) outlined above. The company cautions that these forward looking statements are further qualified by other factors including, but not limited to those set forth in the company's Form 10-KSB filing and other filings with the United States Securities and Exchange Commission (available at http://www.sec.gov/). The company undertakes no obligation to publicly update or revise any statements in this release, whether as a result of new information, future events or otherwise.

For further information regarding GameZnFlix, please contact GameZnFlix, Inc. corporate offices at 1 (888) 542-6817, or visit www.gameznflix.com. For further information regarding Pittsburgh International Telecommunications, Inc., visit www.pitcomm.com.



Contact:
     Contact:
     GameZnFlix, Inc.
     1 (888) 542-6817
     http://www.gameznflix.com
     
     Pittsburgh International Telecommunications, Inc.
     http://www.pitcomm.com
     


--------------------------------------------------------------------------------
Source: GameZnFlix, Inc.

fill, notice this. When I wrote the first comment:

QuoteIt's current market cap is $7.59M.

And now the market cap is $23.04M. This company is selling shares in the open market in bulk and the trend is down ... but, you maybe be right and it may go up short term because of some news. I would use those news to get out of the position.

I frequently change views. A trader must do that to survive. On GZFX I wasn't considering the whole picture at the first analysis, mainly the fundamentals on an historic context (revenues are declining, losses are growing).

Good luck 

David,

Fair enough.  Thank you for replying. 

-Jeff-

Press Release Source: GameZnFlix, Inc.


GameZnFlix Acquires DVDavenue, LLC
Friday February 10, 1:57 pm ET


FRANKLIN, KY--(MARKET WIRE)--Feb 10, 2006 -- GameZnFlix, Inc. (OTC BB:GZFX.OB - News), an online provider of DVDs and video games for rent or purchase, today announced it has acquired DVDavenue, LLC., an online provider of DVDs for rent, based near Washington D.C.
ADVERTISEMENT


Financial terms of the transaction were not disclosed.

"This is a great acquisition for GameZnFlix as this will result in increasing our membership base, acquiring thousands of titles and adding a new distribution facility," said Donald "Chip" Gallent, President of GameZnFlix.

"We feel that consolidation of the online DVD rental market is overdue and that becoming part of GameZnFlix offers our customers more value per rental dollar spent," said Richard Thomas, Managing Partner of DVDavenue, LLC.

As part of the transaction, existing DVDavenue customers will be transitioned over to GameZnFlix's service. The transition is slated to be completed within 30 to 60 days.

GameZnFlix Chairman and CEO John Fleming added, "As we grow our business model we will continue to look for acquisitions where there is a solid business fit. The DVDavenue acquisition met our requirements and the management of both companies see the benefits for members of both services."

GameZnFlix is a company that offers video games/DVD movies for rental or purchase on the Internet with access to over 40,000 games and movie titles. With different membership levels beginning at $8.99 a month subscribers can rent a combination of both video games and/or DVD movies with no late fees or due dates or members can purchase video games and/or DVD movie titles at a membership discount.

Certain statements in this news release may contain forward-looking information within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. All statements, other than statements of fact included in this release, including, without limitation, statements regarding potential future plans and objectives of the company, are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Technical complications that may arise could prevent the prompt implementation of any strategically significant plan(s) outlined above. The company cautions that these forward looking statements are further qualified by other factors including, but not limited to those set forth in the company's Form 10-KSB filing and other filings with the United States Securities and Exchange Commission (available at http://www.sec.gov/). The company undertakes no obligation to publicly update or revise any statements in this release, whether as a result of new information, future events or otherwise.



Contact:
     For further information, please contact GameZnFlix, Inc. corporate offices
     at
     1 (888) 542-6817
     Source Website: http://www.gameznflix.com
     


--------------------------------------------------------------------------------
Source: GameZnFlix, Inc.

Fill the gap, Glad to see you are in the green today!!

Good Luck

DVDmarketplace.com Signs GameZnFlix Inc. as a Featured Merchant
Monday February 13, 9:25 am ET

VANCOUVER, BC--(MARKET WIRE)--Feb 13, 2006 -- Steve Gaspar, President of VMH VideoMovieHouse.com (OTC BB:VMHVF.OB - News), is pleased to announce that VMH VideoMovieHouse.com subsidiary http://dvdmarketplace.com, the company's new innovative on-line DVD marketplace, has added http://gameznflix.com (OTC BB:GZFX.OB - News), a seller/renter of DVDs and video games on the Internet, to its growing roster of on-line merchants. This strategic move allows GameZnFlix Inc. the opportunity to market its surplus inventory of previously viewed DVDs to the ever-expanding database of customers buying their DVDs at http://dvdmarketplace.com.

GameZnFlix Inc. brings previously viewed content to the DVDmarketplace.com community. DVDmarketplace.com intends to help GameZnFlix Inc. realize additional revenues by providing them with an effective on-line vehicle to sell their previously viewed DVDs.

According to Brian Holden, Marketing Director for http://dvdmarketplace.com: "DVDmarketplace.com recognizes the opportunities associated with bringing buyers/sellers together using its new proprietary third-party sales platform. Our goal is to create the premier DVD buyer/seller community on the Internet and allow DVDmarketplace.com customers the opportunity to buy products from an array of merchants who, as a whole, offer the widest selection of new/used DVDs. We intend to secure some of the largest new/used DVD vendors on the Internet today. Featuring merchants such as GameZnFlix Inc. is part of this long-term strategy."

Customer/Merchant update:

Anybody with a credit card looking to sell their new or used DVDs can simply register as a seller on the site and compete alongside http://dvdmarketplace.com's featured merchants. Buyers and sellers, large and small, looking to sell a DVD simply find the movie on the site by UPC or title. Then the seller simply clicks the red link on the movie cover "Sell yours here." Have a movie you are looking to sell? Sell it on DVDmarketplace.com.

Fill,

What's your sell time frame, short term and long term target for GZFX?

Thanks.

dcrlin

dcrlin,

My time frame is very short.  I will evaluate before March 5th-15th.

And my target remains near .0125 - .015 before March 5th.

If they get the Circuit City deal, the target is 3 cents and above, imo.

If they can parlay the website, AAFES military deal and some other news, it is very possible.

If they somehow lose Circuit City, it will not be pretty.  That is why I will evaluate again ahead of the 5th-15th.  10 days written notice of cancellation must be given.

-Jeff-

fill,

Sometimes it's hard to exit penny stock, so I want to get out while it's still in uptrend.  I now have a plan and I would exit this trade very soon.

Thanks for your post.  I have learned a lot from your analysis.

dcrlin

Quote from: fill_the_gap on February 13, 2006, 07:51:01 PM
dcrlin,

My time frame is very short.  I will evaluate before March 5th-15th.

And my target remains near .0125 - .015 before March 5th.

If they get the Circuit City deal, the target is 3 cents and above, imo.

If they can parlay the website, AAFES military deal and some other news, it is very possible.

If they somehow lose Circuit City, it will not be pretty.  That is why I will evaluate again ahead of the 5th-15th.  10 days written notice of cancellation must be given.

-Jeff-