3SOF

A New Partnership: Circuit City and GameZnflix
Mar 29 2006 8:07:33 pm
Stock Market Analysis by Lonny Rosenfeld
 
When I wrote my first article on GameZnflix (OTC BB:GZFX) last November I stated that I very rarely write about penny stocks, but I thought this one had a lot of potential. So far I have proved myself to be correct. On Friday, March 24th Circuit City (CC) announced that is will go ahead with a nationwide release of the GameZnflix movie and rental service. In the fourth calendar quarter of 2005, the two companies tested offering the GameZnFlix services at a limited number of Circuit City Superstores and online at circuitcity.com. After concluding the tests, the services will now be expanded to include Circuit City Superstores across the United States and will continue to be available nationwide on Circuit City's website. (MARKET WIRE via COMTEX)

"We want to offer a variety of products and services to our customers and the GameZnFlix's program allows our customers to experience the convenience of renting both movies and games through the mail," said Bill Cimino, director of corporate communications for Circuit City.

The agreement calls for a rollout of GameZnFlix's service by offering prepaid service cards at each of Circuit City's Superstores. The agreement calls for adding between 45 and 110 locations each month until full deployment is reached prior to the 2006 holiday season. Financial terms of the agreement are not being disclosed.

"This relationship is a win-win for both companies," said John Fleming, chairman and chief executive officer of GameZnFlix, Inc. "Circuit City continues to prove to be one of the top destinations for movie-lovers and video gamers alike and by co-marketing with GameZnFlix, Circuit City can continue to fulfill its customers' needs by adding our rental services to its product line."

For those readers who are unaware of this company, 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.

As anyone would expect, shares of GZFX received a huge pop at the open Monday morning. Shares surged more than 125% early in the day to trade at $.0209 on extremely heavy volume. As Monday progressed shares trimmed these gains in half. GZFX last traded Wednesday at $.0134, up 12.61% for the day. Trading for the first half of this week has been relatively predictable. Almost everyone had expected a big gain early Monday, followed by some profit taking later in the day and Tuesday. Wednesday was another day where many investors either bought back in after selling early Monday or others jumped off the sidelines to get in at a more reasonable price.

Given now that it is known that the Circuit City deal is in full effect, what does this mean for the future of GameZnflix? Clearly as I have stated months ago, the potential is truly there for this partnership to be a success. Circuit City has done its part; they have opened the door for a relatively unknown company. Now it is the job of GameZnflix to step up to the plate. This is the big leagues now, do not strike out.

I know many you reading this article are reading this because you are either share holders of this company, have been share holders, or you are thinking about becoming a shareholder. Remember this is a penny stock, so of course there is a high level of risk involved, but is that high level of risk a risk worth taking?




Looking at the 6-month chart above, there are very well defined support and resistance levels. These will be the areas that will dictate trade for the short term. There is currently resistance located at $.021; this was reinforced on Monday's trading when shares topped off at $.0209. There is also support located at $.012, this was the low of the day on Wednesday before shares bounced off this level and ended the day higher.

What can be expected of shares of GZFX over the course of the next few months? I would expect to see a lot of volatility as investors try to weigh the future of this company from any news releases concerning the Circuit City partnership. There is a strong likelihood that shares of GZFX will move significantly higher from their present level. Circuit City is no laughing matter, this company would not have reached out and extended its hands to GameZnflix if it did not think it would benefit as well from this deal.

This is truly a company to watch and it will be very interesting to see how this partnership evolves in the future.

For those new to GameZnFlix, I would like to mention that Circuit City also partnered with a tiny new company several years ago called Netflix.   -LiveLife-
-----------------------------------------------------------------------------------------------------------


The same Circuit City executives are involved with launching GZFX this time.
They certainly learned alot from the Netflix launch. 
Always best to be 2nd in a case like this.

My play remains for the website tonight? and then AAFES next week, imo.

Looking great !

New Website !   

http://www.gameznflix.com/default.aspx?sp=all

I would add today for sure if cash were available.  My position is maxed out in GZFX.

If AAFES hits Monday-Tuesday, we head over 2 cents, imo.

Today has held up well.  They should be done with filings for awhile.

We head up from here, imo.   

They will announce AAFES this week, imo.   

And they never announced the new website.  So that may also hit the wire.  But AAFES is the deal that will move the stock over 2 cents, imo.

fill the gap...what does AAEFS stand for? and what makes you think it's a more valuable deal than CC....I'm trying to establish a short term long position on this...actually managed to get 200K shares today at ave. price of $0.0154  down already!

but I kinda like the chart and am looking for it to test $0.0209 at tle least pretty soon.

your thoughts are appreciated! 

Army and Air Force Exchange Service. Learn more here:

http://www.aafes.com

I loaded up more today also. Too bad it went down but will no doubt go up soon. It's been very strock and will test .02 and beat it soon. Probably with the AAEFS news that's expected.

AAFES stands for Army Air Force Exchange Service and it is basically the main store that us Army and Air Force types go to do a lot of our shopping such as for clothes, electronics, household and garden items, etc.  The advantage for us to shop there is that they will price match an identical item from a civilian store and we don't have to pay sales taxes on what we buy.  Plus if you live on a military reservation, the store is usually not far away.

I believe the CC deal is bigger since it will reach a wider customer base than the AAFES deal can.  I haven't look at the exact number of soldiers and airmen in the Army and AF recently but we are talking way less than a million so it's a more limited number of customers than CC would see (unless I am way off).  One advantage to this is that the age structure in the military is like a pyramid where the younger members far outnumber us geezers and alot of them are game players.  GZFX offering games for rent should really appeal to this age group while the movies should appeal to all ages.  They need to bring back their miitary discount though and maybe they will when they do the AAFES launch.  I'm still not convinced this will be an earth mover for GZFX.  Don't get me wrong, this will be a good deal for GZFX being in the PXs and BXs around the US and overseas - every additional outlet for selling a product will result in more sales.  I just don't think this will be a huge mover like CC should have been or will be.  And especially with the King Kong size float that is inevitable.  I would be surprised if some of those shares haven't already hit the market.  It's going to be tough to move up too much with so much supply.

Quote from: jsintexas on April 04, 2006, 02:44:52 PM
I didn't mean it as an insult.  I mean that if there is all this "potential", especially with a "AAEFS rumor", why is it going down?  I would think that it would be trickling up, not down.

Basonista,

Your post is correct.

I got in average .0076 and will be selling quite a bit tomorrow to protect the portfolio.

Malum 2006,

My concern is that AAFES is not a well known name.  It is a giant deal for sure, but is it already built in?  People have been talking like it is a done deal on all the boards.

Seems that everyone may be selling the AAFES news when it does come.

Do what works for you.  I will buy back in for a trade at a later date.  Tomorrow, without news at the open, I will sell quite a bit.

i'm really surprised to hear that so many here are panic selling.  really, what is different about GnF's business plan or potential from yesterday or last week? because we've traded down two days after trading up for 3 days everyone thinks the sky is falling?  we are still up a heck of a lot from our pre circuit city national roll-out news, and are still above the lows for the stock since that news.  i've done my research, and i still believe strongly that GnF is undervalued.  I will be very surprised if this stock does not make a parabolic move upwards in the near future.  in the meantime, i intend to hold my shares.

First of all, I have been here for months, even holding when it printed .006's.  So I am far from a panic seller.  In fact, I spent weeks here with no other posters present.  I resent the comments above.

What changed for me was the most recent filing.  25 billion Authorized is one thing.  But they basically announced selling billions to market.  A big difference when they hit O/S.

Another deciding factor is that I am up nearly 100%.  Giving back principal when it produces a candle like today (closing near low too) is not quality trading.  I got the second round of buys in .012's and will not give that all back.  I can always get back in. 

I see many traders waiting for AAFES news to sell it all off.  So the pop may be limited due to the billions of shares.

The main factor is that the upcoming Q will produce a major selloff.  The sub count will remain low as CC has not rolled out.  They added 2 billion shares to the float the last filing.  And this filing will be no different.

GZFX is not worth anything from a fundamental perspective.  The name CC is what keeps it up.  The VOD satellite deal and e-golf is fluff.  Read the filings and you will see that they spend a fortune each month.  And the sub count is not growing very quickly.  Chip hopes breakeven by year end. 

You cannot blame people for flipping.  Until people can trust the company and they bring some revenue in, flipping is the only option here.

Understand that this is all my opinion.  But I have spent over a year here.  Even said at one point that I would wear a 3SOF tee-shirt for a year if a double was not produced.  Very few believed in me and GZFX at the time.  So please respect that I come to the table and back up my sale with reasons.

I will certainly be back.  It depends on the chart and if news is expected.  I know this company well and will always keep it close on the Streamer.

Good luck.

GZFX is no longer in my portfolio.  I will wait until after the filing to evaluate again.

It was a nice 100% plus return from .0076.  So well worth the trade.

Quote from: godspeed06 on April 13, 2006, 08:45:40 PM
50ma will be taken out on monday. 5ma continues to fall and will soon drop below the 50ma, 20ma will soon start a downward trend. cmf is on its way back down to the -.50-.70 range again. macd will soon go negative... i let myself be blinded by this companies service and what i thought was its actual value. normally with pinks youre isolated from their service, in fact, usually they dont even do anything. this one is so easily compared to netflix that you really think youve got something, but its no netflix... yet. dont let the pr's and hope keep blinding you. ive ignored the technicals for too long thinking that news at any time would override them... well that was naive. time to start looking at the charts, and it doesnt look good. it makes me sick, but i think this will trend down to .005. 

i applaud the regulars on here that flipped and studied the charts. fill the gap and so on. i wont make this mistake again. i plan on buying in again at some point later this year. but i need to see whats going on with the A/S and how well the cc deal actually goes.

Godspeed, I agree.

It will also further decline when the Q arrives.  Holding it now when all indicators point down is asking to lose money. 

The hopes of large returns vanished when the major dilution set it.  So many people are waiting for some news to just sell and get out of GZFX right now.  So any news is hit hard with even more selling.  A vicious cycle.

And other boards are pointing out that GZFX Agreement with Golden Gate allows for Short Selling! This is not good because it can already be shorted in Berlin. 

The price looks to head well below a penny in the weeks ahead.