16
More on TradeShow Marketing (TSHO)
Topics: penny stocksI have been deluged by emails, and a few comments, regarding my article on TradeShow Marketing (pink sheets:TSHO).
Many of you thought it was unfair to compare Tradeshow Marketing to Spongetech (pink sheets:SPNG). Perhaps, but the comparison was drawn first by Skymark Research, the company that has been hired to pump Tradeshow. I thought — and still think — it is odd to promote a stock on the basis that its chart might one day look like this:
That said, both charts show the importance of volume to these promotions. If Tradeshow Marketing cannot sustain its volume, I suspect it will drop just like Spongetech's stock did.
I agree wholeheartedly with those of you took the time to write about further factual investigation. You can help. If you know any of the following please comment:
– where can I see a copy of the contract with Cesari Direct that so many of you believe to be critical?
– why does the link to the company's website on the Yahoo! Finance profile page for TradeShow Marketing redirect to a Spanish adult site (not safe for work)?
– how much will TV media buys cost for the infomercials, and how will they be paid for?
– how many squeegees must be sold to put the company in the black?
– who is the "third party" paying Skymark Research $5,000/month to pump the stock (see Skymark's disclosure on its emails).
DISCLOSURE: No position.
Related posts:
It would appear that you didn't like my last comment about you studying to be an idiot. You better do a little more research on spng. As I mentioned Spng just won a lawsuit against Spongeables, who's CEO was one of the "experts" Kaja Whitehead of The Post, suggested SPNG could not do more than 10m in sales. It would appear that he was trying to save his company which was stealing SPNG business by using a PHONY name to confuse the public.
As I said, before you write, do a little more research other than repeat the venom spewed by bashers.
You're gaining points in my book, for now engaging in a real and upfront conversation and exploration of the facts! I respect that, and a very timely response.
.
Very much appreciated. And good questions:
.
In reply to the first part of your article, (were you following SPNG at the time?) SPNG's numbers were called into question the second their accounting firm "Drakeford & Drakeford, LLC" was under investigation. At that instant, Skymark issued a precautionary sell (~$0.15), and the Strong Sell at $0.10.
.
SPNG's accounting firm had its license revoked, therefore they have to re-audit their entire financial standing- from annual reports to quarterly reports, all of their financial information was rendered void- that's basically why the stock has crashed (also the following "E", and subsequent de-listing by the SEC for not meeting reporting requirements). That and, the lack of updates from the SPNG regarding this MAJOR issue.
.
———
.
In reply to your questions:
.
—
.
#1. Regarding the Contract with Cesari Direct, there have been multiple PR's regarding this-
..a) http://www.prnewswire.com/news-releases/tradeshow-marketing-company-announces-agreement-with-infomercial-production-specialist-cesari-direct-62323132.html
..b) http://www.reuters.com/article/idUS181586+28-Oct-2009+PRN20091028
..c) If you really wish, you can call/email Cesari and confirm this relationship- that's what I did for myself.
.
#2. Tradeshow's website is http://www.tsho.com. Pinksheets.com, and all official websites for information have this correct. Yahoo Finance may want to look at firing their data feed.
.
#3. TV media buy costs are purchased with a media test, and future airings are ran from revenues generated on the previous run. It's what's called MER- Media Efficiency Ratio. If it is above 2.0 (which means you make 2x the money you spend), then you air more commercials. If this MER ratio is below 1.0- obviously you do not continue to air and lose money. You just go onto the next product…
.
..a) "An infomercial media test cost is typically $10,000-$15,000…" link: http://www.infomercialdrtv.com/
.
..b) "Most clients budget anywhere from $20,000 – $30,000 per price point. This generally buys anywhere from 8-15 telecasts." link: http://www.hawthorneinfomercialmarketing.com/FAQs.htm
.
..c) "A direct response television media test is designed to provide the marketer with a read on the viability of successfully selling their product on TV. The media test usually runs over one to two weeks and $10-$20,000 is typically budgeted." link: http://drtvbuyer.blogspot.com/2007/02/common-drtv-mistakes-companies-makes.html
.
..d) And how will they pay for it? "Our Chief Executive Officer advanced the Company approximately $30,000 for the purchase of inventory, advertising, and other operating expenses." – taken right from their last quarterly report. That even pays for the most expensive media-buy.
.
#4. How many squeegees must be sold to put the company in the black? (for everyone else, this means profitable without debt) Well considering the avg. infomercial production can be done for less than $250k, and their balance sheet has approx. $500k (rounded up) of liabilities to be paid: that would be 750k divided by $5 (profit expected on each unit) = 150,000 units sold- being conservative. That would require 0.15% of the viewing population to convert into sales. Considering Cesari Direct's work on George Foreman Grill (they pretty did the entire campaign), had a 44% conversion rate… 0.15% does not sound out of the ball-park.
.
#5. The "third-party" is probably the company, and it wouldn't surprise me if it was. And why not? Skymark gives proper exposure and guidance to companies, and cherry-picks who they recommend. $5,000 I'd say is a fair compensation for the incredible work they have done, and never compromising or losing their investors money- that's something I can appreciate. I pay $50/month to be a member…well worth it.
.
But even Skymark aside, TSHO's business plan just makes sense. Less than $250k/infomercial, with a successful commercial being $20-70M in revenue. With the $20M low-end, you could film, produce and air 20 professional commercials, have only one successful and still break even.
.
Now all that is fine and dandy, but here's the main point: Cesari Direct has a 70% success rate. Sold, sealed and delivered: http://seattle.bizjournals.com/seattle/stories/1997/11/03/focus15.html
.
I appreciate the dialogue, and your genuine pursuit of the truth. I too share this goal, not to prove or disprove TSHO- but to arrive at an accurate conclusion about this investment. If that happens to be that TSHO is not a good investment, I will be the first to admit it- but not on blind faith. Rather with careful examination and review of the evidence, to arrive at an accurate conclusion.
.
.
James M. – maone15
You're gaining points in my book, for now engaging in a real and upfront conversation and exploration of the facts! I respect that, and a very timely response.
.
Very much appreciated. And good questions:
.
In reply to the first part of your article, (were you following SPNG at the time?) SPNG's numbers were called into question the second their accounting firm "Drakeford & Drakeford, LLC" was under investigation. At that instant, Skymark issued a precautionary sell (~$0.15), and the Strong Sell at $0.10.
.
SPNG's accounting firm had its license revoked, therefore they have to re-audit their entire financial standing- from annual reports to quarterly reports, all of their financial information was rendered void- that's basically why the stock has crashed (also the following "E", and subsequent de-listing by the SEC for not meeting reporting requirements). That and, the lack of updates from the SPNG regarding this MAJOR issue.
.
———
.
In reply to your questions:
.
—
.
#1. Regarding the Contract with Cesari Direct, there have been multiple PR's regarding this-
..a) http://www.prnewswire.com/news-releases/tradeshow-marketing-company-announces-agreement-with-infomercial-production-specialist-cesari-direct-62323132.html
..b) http://www.reuters.com/article/idUS181586+28-Oct-2009+PRN20091028
..c) If you really wish, you can call/email Cesari and confirm this relationship- that's what I did for myself.
.
#2. Tradeshow's website is http://www.tsho.com. Pinksheets.com, and all official websites for information have this correct. Yahoo Finance may want to look at firing their data feed.
.
#3. TV media buy costs are purchased with a media test, and future airings are ran from revenues generated on the previous run. It's what's called MER- Media Efficiency Ratio. If it is above 2.0 (which means you make 2x the money you spend), then you air more commercials. If this MER ratio is below 1.0- obviously you do not continue to air and lose money. You just go onto the next product…
.
..a) "An infomercial media test cost is typically $10,000-$15,000…" link: http://www.infomercialdrtv.com/
.
..b) "Most clients budget anywhere from $20,000 – $30,000 per price point. This generally buys anywhere from 8-15 telecasts." link: http://www.hawthorneinfomercialmarketing.com/FAQs.htm
.
..c) "A direct response television media test is designed to provide the marketer with a read on the viability of successfully selling their product on TV. The media test usually runs over one to two weeks and $10-$20,000 is typically budgeted." link: http://drtvbuyer.blogspot.com/2007/02/common-drtv-mistakes-companies-makes.html
.
..d) And how will they pay for it? "Our Chief Executive Officer advanced the Company approximately $30,000 for the purchase of inventory, advertising, and other operating expenses." – taken right from their last quarterly report. That even pays for the most expensive media-buy.
.
#4. How many squeegees must be sold to put the company in the black? (for everyone else, this means profitable without debt) Well considering the avg. infomercial production can be done for less than $250k, and their balance sheet has approx. $500k (rounded up) of liabilities to be paid: that would be 750k divided by $5 (profit expected on each unit) = 150,000 units sold- being conservative. That would require 0.15% of the viewing population to convert into sales. Considering Cesari Direct's work on George Foreman Grill (they pretty did the entire campaign), had a 44% conversion rate… 0.15% does not sound out of the ball-park.
.
#5. The "third-party" is probably the company, and it wouldn't surprise me if it was. And why not? Skymark gives proper exposure and guidance to companies, and cherry-picks who they recommend. $5,000 I'd say is a fair compensation for the incredible work they have done, and never compromising or losing their investors money- that's something I can appreciate. I pay $50/month to be a member…well worth it.
.
But even Skymark aside, TSHO's business plan just makes sense. Less than $250k/infomercial, with a successful commercial being $20-70M in revenue. With the $20M low-end, you could film, produce and air 20 professional commercials, have only one successful and still break even.
.
Now all that is fine and dandy, but here's the main point: Cesari Direct has a 70% success rate. Sold, sealed and delivered: http://seattle.bizjournals.com/seattle/stories/1997/11/03/focus15.html
.
I appreciate the dialogue, and your genuine pursuit of the truth. I too share this goal, not to prove or disprove TSHO- but to arrive at an accurate conclusion about this investment. If that happens to be that TSHO is not a good investment, I will be the first to admit it- but not on blind faith. Rather with careful examination and review of the evidence, to arrive at an accurate conclusion.
.
.
James M. – maone15
@James: appreciate all the good info. I didn't see anything in the links about the terms of the deal with Cesari, which is really what interests me. Do you know the terms or have a general understanding you can share with us? To me understanding these terms are critical to any back-of-the-envelope assessment of prospects.
My comments about Skymark were not intended to imply that it avoided any necessary disclosures. From what I can tell it disclosed the financial relationship except the identity of the payor. That identity is important in my view because a third party (and I have no reason now to doubt their representation that its a third party not the company) only pays that kind of money if it has a substantial share base to unload. The coverage will likely end and the volume might dry up as soon as it is done selling.
Anyways thanks again and keep us updated as you learn more.
@MS: The terms of all contracts can be found in TSHO's financial filings.
.
Cesari Direct was paid half in cash, and half in shares for their work- so they have a vested interest in the success of the infomercial. No % interest in the sales- which means bottom line goes to TSHO. Cesari Direct is also compensated $4k/month for campaign management.
.
Mike Wadham, the "pitchman" in the infomercial, is entitled to 2% of the gross sales, and received 50,000 shares for his work. So his entire interest is in the success of the infomercial.
.
All this can be found under Note 8. of their financial filings.
.
(sorry for the double post before, there is quite the delay time from submitting to actually being posted. You can delete the double if you wish)
.
Well- any party that hires Skymark, understands the tight scrutiny they instill on a stock and its entire operations before recommending it. I highly doubt Skymark would risk ruining their reputation on recommending some Pink Sheet that just wanted to skip town with a quick buck. Plus, TSHO's business plan makes much more sense to hold the shares and wait for it to execute, rather than to sell now- especially for an insider who actually understands this business. (and from the way it trades, you barely see any trades go through on the bid).
.
One thing Skymark is known for, is for recommendations that continue to do well- JAZZ, KERX, SUMT, SIRI, usually they either get bought out, or start to have major stake-holders come in. JAZZ now has huge institutional holders, KERX is starting to see some as well. But all because the companies are real, and continue to drive the stock price because of the company: when you have a company that is performing, stock price will follow.
.
TSHO will also, as the comparison to SPNG was meant to demonstrate, gain massive exposure from being on television. Right now, a handful of investors know about TSHO compared to the audience television spots bring. If anything, it will probably increase the volume- though: no way to know for sure.
.
All I know is, those are great points, and great questions. For myself, even if there is no volume: I have no problem owning as stock that I bought for $0.80, if it has earnings of $0.21-$0.54/share per successful commercial. A company like that can just build up a great cash position, or start to pay dividends, either way- not something that would bother me.
.
Though- chances are when you are making that kind of money, with that exposure, I don't think volume will be a problem :-)
.
Good to have a critical eye such as yourself keeping us shareholders and potential investors thinking!
.
Feel free to join us on the forums: http://investorshub.advfn.com/boards/board.aspx?board_id=8990
.
James-maone15
The basis of the commentary is that because Skymark promoted SPNG, and now they are promoting TSHO, that stock likely will follow the same path as SPNG. This is not very sound logic.
Why not assume it will follow the same path as KERX or JAZZ, two other Skymark promoted companies which have continued to remain strong, long after Skymark recognized them.
@Brent: my point was that it was odd for Skymark to draw an analogy with SPNG given SPNG’s stock performance. Really nothing more than that. The SPNG/TSHO comparison was Skymark’s thesis, not mine.
Being a dubious investor, I do commend you on being proactive and seeing if there is, in fact, something amiss with TSHO. I had those exact same questions.
It is my understanding that ESR/Skymark receives no monetary support from any of the companies whose stocks they suggest to their subscribers. Instead it is a monthly fee for subscribers to see their "recommendations."
With regards to inferring SPNG and TSHO are somehow co-joined, yes, ESR/Skymark did put out an email that showed when SPNG's stock began to really prosper. I feel this is a fair comparison, as SPNG and TSHO are doing a very similar TV marketing campaign, both Infomercials.
SPNG's difficulties began when their Accounting firm was shut down, and subsequently have to refile any and all paperwork that the firm did. Financials, SEC filings, taxes… everything. To suggest that ESR/Skymark was at fault when they began to recommend SPNG is absurd. In fact, once they learned of the accountant's problem, ESR/Skymark issued an immediate report with a recommendation to sell.
Also, maybe you should look at the performance of ESR/Skymark's other recommendations. I will do you a favor and give you them, so you can see for yourself what their prices are today.
KERX; SUMT; STEM; ACTC; GETC. That should provide you with a few to look at. Good luck with your column.
I think this needs a follow-up article, these responses in the comments section were very thorough- author, is there going to be some follow-up?
BTW, also Skymark member, just over 11 months now- happily paying- already made well over the prescribed 500% lol, and TSHO's adding to those numbers still
I don't think they have any competition… better than advertised, lol.
Second David's comment, looks like a follow-up article is in order… especially now that TSHO is starting to move again, just established yet a higher level of support over the holidays.
.
here's a good explanation of the probabilities of different revenues with TSHO:
.
—-start quote—-
I've been following the stock since $0.001, and it's definitely not already "made its run".
.
Why and how do you tell?
.
Market-Cap vs. Company.
.
Market-Cap is $16M as of yesterday.
They are working with consultants and production companies that have consistently done billions ($) in revenue.
-Cesari Direct for example, famous for taking a small grill from China, and through the power of marketing, branding it into the "George Foreman Grill" and doing over $2Billion in revenue, with over 50% of the population now owning a grill in their household.
-Then they did OxiClean- with Billy Mays (who helped to develop TSHO's products), and now OxiClean is in near every laundry room.
-Now they are working on TSHO's products, the first draft footage @ Ultimate Squeegee | Revolutionary Window Washing Device
.
I'm a fundamental investor, so I don't average 40-50% per trade – I average 400-500% per trade. That's because fundamentals ALWAYS override technicals.
.
So- Market Cap at $16M, vs Projected Market Cap of $25M – $200M based of realistic revenues.
.
With Cesari Direct's success rate, TSHO has a 24.01% chance of generating at least $80M in revenue, and upwards of $320M in revenue (with average commercial numbers). That's with the 4 infomercials planned for 2010, not including if they do any more products.
.
Now the percentages are exactly 86.55% probability of TSHO seeing at least $20M in revenues, and upwards of $80M in revenues by December 2010 (that's success with one product).
.
These numbers are based off Cesari Direct's history, they have a success rate of 7 out of every 10 commercials, 70% of all commercials Cesari films are successful. source: CRTV wrote the book on infomercials – Puget Sound Business Journal (Seattle):
.
I used a P/E ratio of 5 for the 25M evaluation, and a P/E ratio of 2.5 (extremely, extremely conservative) for the higher evaluation. Translate that into stock price, that's 86.55% probability of reaching a minimum of $1.07 at a P/E of 5, and 24.01% chance of reaching $8.62 at a P/E of 2.5.
.
So yes, it has the fuel to move… and all based off revenue models.
.
Oh, that and…. they are going to air on National Television in the next month, so add a 180 million viewership to that list (talk about DEMAND).
.
And as far as supply goes, 23.2M shares outstanding.
.
That's why people are buying blocks of 50,000 shares of TSHO on the open market, because they are starting to realize this.
—–end quote—–
.
James-maone15
message to james maone 15.I read you have a paid subscription to skymark.could you send me some info so I can get one as well.tried there web site and there's no phone contact.tried email to no avail.And way to stick it to lee markle with all those facts.I own tons of tsho.can't wait for the lift off.I'll keep my eye open for the info on skymark.would really appreciate it.they are definately worth it.
@ DanD: Skymark's number is 3I0-34I-7OOO, that's the phone number for my account manager (Mr. Anderson). I'll call him and let him know I'll be referring someone, so he will know to expect your call.
.
Yeah, their general support emails take a while to get a response from (I can't imagine how many emails they get), it's faster if you email your account manager, and even faster if you call directly.
.
James Malone-maone15
Thanks a bunch James…Let me know when Mr. Anderson is informed of your referral.I'll call as soon as I receive your go ahead.Thank you
@ David: I'm not sure when I will post again on TSHO. Right now I'm just watching, learning a bit more, and waiting to see whether the company can deliver.
@ James: you average 400-500% per trade? Really?
@MS, hard to believe. It's true, but I take my time when it comes to buying a stock. Not the "average" trade the way you would normally think of a trade, I hold stocks for 12-24 months.
I've also got enough cash-flow from my business and properties to cover all my expenses (financial independence), so I can afford to research all day and all night. Big advantage over the usual investor.
Also gives me the opportunity and time to meet the companies, my good friend runs his own private fund- which specializes in purchasing companies, developing them, and later reselling them to big companies. So, I have a lot of resources at my disposal.
I've also recently found (within the past few years), a company called ESR (parent co SMG)- I've noticed they perform consistently, even beating my portfolio on several occasions. Also had the chance to meet with them in their headquarters, it's an group of young guys, motivated and honest. So long as they keep their noses out of trouble, they are set to bring integrity to the micro-cap markets, something that has been long-overdue. They called the sell on SPNG at $0.15, I got the phone-call literally minutes after Drakeford & Drakeford had the FBI show up on their doorstep. I didn't sell right away, but it was a good call to prove these ESR guys care about their own integrity much more than their ego.
So lately, I've been lending an ear to what Skymark (SMG) brings me, and so far- so good. I still do my own research, and anything they tell me I verify for myself (just good habit, even if you do trust someone).
It's to the point where I invest for fun, not out of necessity. From my enjoyment, comes dedication to master it.
James M .
You sound like a guy who knows his way around the stock market. I'm Just getting started myself.Been playing seriously for six mths now.Not doing to badly either.More than tripled my original investment so far.I'v been a little more lucky than skillfull I have to admit though.Trying to change that by finding the right advisors.Found two so far.Skymark and Undiscovered Equities.Would you be able to offer up any others you know of.Really passionate about the markets.I would really appreciate any help which leads to the good guys.Way to many jokers out there.
Thanks
[...] A special thanks to reader James Malone, who cogently and civilly articulated the bull case for Tradeshow Marketing (see comment [...]