GZFX.OB !!!

[basonista]

I have to side with Fill here.  He does the hard work with phone calls and DD that many people don't.  I would hope that everyone that plays the pennies realize how risky they are but I'm afraid that most just look at the riches you can gain and not the losses that can mount QUICKLY.  That said, I would be hard pressed to find a penny that I would consider an investment and not a trade.  Probably 90% or more of a penny's move is news based - and that is why I also believe that GZFX will be a mover in the coming weeks.  Do I have any pretentions to GZFX being a long term investment.  Hell no!  As soon as it looks like it's done making it's move, I'm out and looking for the next stock ready to run.

I've applauded fill many times on his hard work and will continue to do so.  Just remember to do your own DD.

[David Randolph]

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.

Disclosure: David Randolph is not an analyst, he's a trader/investor who manages 3 public portfolios at www.3stocksonfire.org.

www.3stocksonfire.org is a portfolio management service (know about our premium service) and a community of stock traders and investors. If you want to join the 3 Stocks on Fire Community, so you can exchange trading strategies and stock picks with us, please register (it's free, and it only takes about 10 seconds).

Thank you for your interest 

[fill_the_gap]

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.

[doyerdiligence]

ouch even david giving it the kiss of death

[doyerdiligence]

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.

are you high?
As of December 31, 2005, the Company had 3,291,733,490 shares of common stock issued and outstanding.

[rv]

doyer,
i think the statement about 925k shares was cut/paste that fill did of David from the past...

[rv]

sorry...925mill shares...thought that sounded low when i typed it...

[fill_the_gap]

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)   

[fill_the_gap]

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.

[Malum2006]

That does seem odd that he mentions the different business models yet that Press Release says what it does.

[doyerdiligence]

well i been bashing all the way and i think GZFX is a terd so smite me to negative if you want!!!!!

[fill_the_gap]

well i been bashing all the way and i think GZFX is a terd so smite me to negative if you want!!!!!

Dover,

3stocksonfire has worked hard to be different than other boards.
It is a forum for cordial discussion backed up with information.
A difference in opinion is certainly welcome, but please respect the members moving ahead.

This is not Raging Bull.  Really not sure what purpose the comment above serves in the forum?

-Jeff-

[doyerdiligence]

really, it's not rb? are you sure?
actually i just said that because people are getting on david for flip flopping, so i just thought i would state that i have always hated this stock.

[LiveLife]

Let's stay objective.

I admit that I am still a fan of GameZnFlix.  But my wife makes me trade according to the objective template. 

Looking at the chart, technicals don't look great.  But as a short-term swing trader, I look for the bottom of a downward trend.

If GZFX rebounds towards March 15th announcement with Circuit City going nationwide and current sell indicators move to buy indicator column, I will be buying.

GameZnFlix as a company model looks promising in a very competitive world of DVD/game rental business, but there are hurdles to overcome and grow.  March 15 is the next one, IMHO.

[doyerdiligence]

ya keep holding till march 15 while they keep peeling off shares