Double or nothing: EYII

[ehos]

Thank you for the clarification David!

What do you think the profit margin for EYII would be?  Do you think it's closer to 5% or higher?  And is there any way to figure it out?

[AussieTrader]

Randolph:  I guess HYRF.OB rises a lot because the company has no history of issuing shares, warrants and options to pay for expenses as EYII.OB did. EYII.OB stock is paying the price of its past over the short term, but in the end fundamentals wil be reflected on the stock price.

I was surprised by the stocks failure today I must admit. To re-afirm what David has said I see that Market Pulse (compnay who releases presss release for certain companies to the news wires) disclosed this information on their last press release for EYII:

MP has been compensated in free trading shares of common stock, available for public trading as follows: EYI Industries Inc. compensation from a third party shareholder: two million seven hundred fifty thousand free trading shares of stock in EYI Industries Inc., already delivered from a third party shareholder. To date, MP has sold two million fifty thousand shares of stock in EYI Industries Inc. for proceeds totaling two hundred sixty nine thousand and six hundred dollars

[David Randolph]

David,

I'm confused.

HYRF manufacturers the filter and EYII is the distributor.

http://biz.yahoo.com/iw/050927/096389.html

The contract specifies what the Chinese distributor will pay for the product, but what I don't see what EYII is paying HYRF for the product.

I guess, from HYRF's CEO interview, EYII.OB sells the product to CEIEC for $20 and pays HYRF $14. EYII's profit margin is 30% on each Code Blue Water Filtration System sold to CEIEC.

EYII.OB benefits of having exclusive distribution rights for Code Blue worldwide for a period of 5 years. Probably HYRF.OB moved production from Switzerland to China to increase its profit margin.

David, thank you so much for your analysis.  May I ask where you find such information on executed options?  That would have been very comforting to see that intraday as my nice little nest egg plummetted to earth in a violent fashion.  With 22M shares possible to sell via these options, as you said, there can't be many left.  Perhaps the stock is finally ready to run over the next few days?   Wink

I've picked that information on the last 10-Q SEC filing of the company, which was published on August 18th. I have a paid service with all SEC filings and news for each company, but you can find it free on the internet, perhaps on www.sec.gov.

The stock may run higher anytime, when stocks for sale end it will shoot higher. I don't know exactly when it will happen, but volume yesterday being so high is a help.

David, just ignore my previous comment.

The code Blue Filter system comprises the following

The Pitcher , $13 and
The Filter, $7.

The recently signed contract stipulates just the Filter! So we should be expecting another contract or addendum to the current contract to include Pitchers as well. If the Pitchers are included, then the contract value increases substantially!!

I believe the contract talks about a Code Blue Water Filtration System which is comprised of the Filter and the Pitcher.

Thank you for the clarification David!

What do you think the profit margin for EYII would be?  Do you think it's closer to 5% or higher?  And is there any way to figure it out?

It is 30%. HYRF's CEO said his company will get 70% of the deal with CEIEC, so EYII gets 30%. But the 30% for EYII are pure profit, HYRF.OB still has the cost of production of the product. In simple terms, EYII.OB sells each Code Blue for $20 and pays $14 to HYRF.OB. EYII's profit margin is $6 for each Code Blue sold to CEIEC (it is higher if sold to somebody else, because the price would be higher, CEIEC has a big quantity discount). HYRF's profit margin depends at what cost they can produce the product in China, I bet the cost is pretty low 

I was surprised by the stocks failure today I must admit. To re-affirm what David has said I see that Market Pulse (compnay who releases press release for certain companies to the news wires) disclosed this information on their last press release for EYII:

MP has been compensated in free trading shares of common stock, available for public trading as follows: EYI Industries Inc. compensation from a third party shareholder: two million seven hundred fifty thousand free trading shares of stock in EYI Industries Inc., already delivered from a third party shareholder. To date, MP has sold two million fifty thousand shares of stock in EYI Industries Inc. for proceeds totaling two hundred sixty nine thousand and six hundred dollars

Thanks aussietrader for another proof of what I've been saying: since the company had big liquidity problems until now it paid everything with stocks, warrants and options. Even Press Releases  Well, probably Market Pulse is done selling their shares now (big price to pay to get known) and eventually all this publicity, in the end, will put the stock where its fundamental value is, much higher than the current market price.

[starfire]

David, this is from their 8K (complete text file)
"
Purchase Plan

Year 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units          Total
2006   100,000     400,000     2,000,000   3,500,000 (filter)item  6,000,000
2007 4,500,000   5,500,000     6,500,000   7,500,000 (filter)item 24,000,000
Total: 30,000,000 Code Blue Water Filtration Systems
"
The above says just 'filter'! Also the math works out i.e 30M units times $7 = $210M.

However, HYRF's PR indicates a minimum order amount of $42M, includes pitchers & filters!!!

Hopefully there will be a clarification soon!

[Ramsburg]

I'm enjoying very much the general technical behaviour of EYII. Despite the stock is going down today, and selling off after the 3 recent pushes (read David's explanation on this), I believe the general pattern is turning quite bullish.

The stocks is making successive higher lows, and the high of yesterday's rally was already higher than the last one... Taking in consideration the big volume watched on the last rallies, the selling pressure is definitively weaker now, which means that at any moment one of the future rallies could lead the stock price to impressive numbers (several bags ahead of current price).

I've been trading EYII on the last weeks on my personal portfolio, buying and selling on these moves, but now there's one thing I'm sure... I'm not selling EYII no more... I may lose my position when the big rocket move starts...

Regards !

[KCScott]

According to the last 10Q:

http://yahoo.brand.edgar-online.com/fetchFilingFrameset.aspx?FilingID=3868961&Type=HTML

As of June 30:
WEIGHTED AVERAGE NUMBER OF
COMMON STOCK SHARES OUSTANDING

FOR BASIC AND DILUTED CALCULATION                      157,060,345

The Math on the China deal - EYII making 30% profit of the total sale:

30% of $42,000,000 = $ 12,600,000 - Guaranteed
30% of $ 210,000,000 = $ 63,000,000 - If filled in full

Using the "math" of these profits from the China deal as applied to the share price:

Guaranteed $12.6m profit= .08 per share profit
Total $ 63m profit if exercised in full = .40 per share profit

I'd appreciate comment on these calculations

Thanks in advance

[TRUNK]

Ceo has a new interview about the contract

http://www.agoracom.com/executive/eyi%20industries-sept27/player.html

He says he reads all of the message boards online

Said he wants to move into Phillipines, Malaysia etc. etc. next

[pastate]

what do you think about this stock , are we ganna see it above $1 in one year  like what hyrf.ob done 

[KCScott]

Ceo has a new interview about the contract

http://www.agoracom.com/executive/eyi%20industries-sept27/player.html

He says he reads all of the message boards online

Said he wants to move into Phillipines, Malaysia etc. etc. next

Great interview - Applaud for posting it.

The only thing I wasn't too thrilled to hear was the immediate range he set for the stock price .10-.15

A good salesperson needs to know when to stop talking. 

[digitx]

Ceo has a new interview about the contract

http://www.agoracom.com/executive/eyi%20industries-sept27/player.html

He says he reads all of the message boards online

Said he wants to move into Phillipines, Malaysia etc. etc. next

Great interview - Applaud for posting it.

The only thing I wasn't too thrilled to hear was the immediate range he set for the stock price .10-.15

A good salesperson needs to know when to stop talking. 

So basically he set the price already which is less than some people bought it for. Any opnions?

[TRUNK]

The only thing I wasn't too thrilled to hear was the immediate range he set for the stock price .10-.15

A good salesperson needs to know when to stop talking. 

No, thats not correct. He said quite the opposite.

He was referring to .10 to .15 cents being the current price- He said if investors can grab shares in this range (its a steal).  He went on to say EYI stock is an enormous value and then again at the end reiterated that the stock is undervalued

[digitx]

The only thing I wasn't too thrilled to hear was the immediate range he set for the stock price .10-.15

A good salesperson needs to know when to stop talking. 

No, thats not correct. He said quite the opposite.

He was referring to .10 to .15 cents being the current price- He said if investors can grab shares in this range (its a steal).  He went on to say EYI stock is an enormous value and then again at the end reiterated that the stock is undervalued

Thank you Trunk for the clear-up. I was wondering after I listened to him twice. You are right there. I appreciate your input.

[KCScott]

The only thing I wasn't too thrilled to hear was the immediate range he set for the stock price .10-.15

A good salesperson needs to know when to stop talking. 

No, thats not correct. He said quite the opposite.

He was referring to .10 to .15 cents being the current price- He said if investors can grab shares in this range (its a steal).  He went on to say EYI stock is an enormous value and then again at the end reiterated that the stock is undervalued

JMO, by Sargeant saying "if you can get shares in this range" he sets a range - Again a good example of saying something that can be misread by the market.

Rather than debate this single sentance, I will again reiterate, how well the interview as a whole came across. This may end up being a longer term hold than I planned, but I like their product and the Razor Blade model is one I know well.

[catrader]

consolidating at 0.10 you would say?  it twice gone to 0.18 and I haven't sold.  Guess the 3rd time I will for sure.  Hope it gets there soon.

[David Randolph]

I want to present a chart comparison based on the same fundamental problem from two completely different companies. Do you remember when I bought AMEP.OB at $0.0198? I said I would hold the stock for the long term, and wouldn't sell even if it fell down below support. I changed my plan along the way and ended up selling for a 22% loss, when the stock indeed broke support

It looked everything was right for AMEP.OB to shoot higher, but everytime the stock rallied heavy selling kicked in and the stock fell back quickly, just like it is happening now with EYII.OB. I investigated a bit and AMEP.OB had the same «options and warrants problem» that I've talked about concerning EYII.OB on this thread.

Traders got tired (me included), sold their shares breaking support, but ... suddenly, there were no more AMEP.OB shares available for sale. Nothing, those people that had options and warrants that were converted to common stock run out of shares. Here's what followed:



So, I'm trying to learn from past mistakes and experiences here. Same situation, same outcome? Probably !

On EYII.OB we have awesome fundamentals but the stock price doesn't reflect that, everytime there's a rally the stock quickly falls back on heavy selling. Possibly EYII.OB will even break the ascending support line I'm considering because traders will get discouraged by the market action, but that doesn't mean anything, when stocks available for sale from people who converted options and warrants to common stock end, EYII.OB will probably shot up 5 or 10 fold just like AMEP did.

Here's EYII's chart, but don't forget AMEP's story if EYII breaks support 



If EYII does what I'm saying I will probably pick up a truck of shares, of course, that has nothing to do with the $1,000,000 experience, but it would be just too good of an opportunity to have just $1,000 invested.

Good luck to all those holding !