Oct 22, 2007
Commerce Planet (CPNE.OB) jumped over 20% today after announcing plans to execute a reverse split that would qualify it for listing on a national exchange like the Nasdaq or Amex.
“The decision to approve a reverse stock split is the proper step to ensure our corporate structure is positioned to enhance the long-term value of our company,” stated Mr. Michael Hill, CEO of Commerce Planet. “We believe a share consolidation and a national capital market listing will greatly benefit our current and future shareholders by increasing exposure to retail and institutional investors and better positioning the Company to obtain analyst coverage.”
Folks, this is not big news. Every OTC BB company has higher aspirations. Here, while I think Commerce Planet has considerable upside, investors should not place too much value on an application that hasn’t even been filed, let alone approved. Today’s high-volume move took shares very close to the resistance formed by August’s high. Commerce Planet needs to clear that level if shares are to continue to appreciate.
DISCLOSURE: Long CPNE.OB.
Like this? Subscribe to RSS | Comment | Bookmark on del.icio.us
Sep 4, 2007
- Commerce Planet: CPNE.OB announced this morning a letter of intent to acquire Iventa, an online web builder based in the United States that also has a 30-person web services staff in India. The announcement was long on strategy and short on details. The company says that “the acquisition of Iventa’s Dashboard System(TM) platform will rapidly accelerate Commerce Planet’s expansion into the B2B business sector by leveraging Iventa’s existing customer base which consists of leading companies and brands in many industries including entertainment, publishing and media. In addition, Commerce Planet will be able to immediately offer Iventa’s software to its customers that are currently using its top producing consumer direct product, Online Supplier.” Unfortunately, the terms of the deal were not disclosed, and critically the company did not say the deal will be accretive (which means it probably won’t be).
- Global Aircraft: GACF.OB announced that its CEO would remain at the company and would assign his interest in Global Aircraft Leasing Partners to the company, eliminating a serious conflict of interest. Also, Global Aircraft is almost done untangling the mess from its dealings with BCI. It received the sixth aircraft pursuant to its settlement agreement, and will receive $1.6 million in funds recovered from the Delta bankruptcy.
- Gold has made a major move in the past few days, reversing a false breakdown from a multi-month coil.
Now, judging by the december futures, gold is approaching the top of the coil with a head of steam. The declining trendline could prove to be resistance again, but I suspect we may be near a major breakout. I remain heavily long junior gold miners like Goldenstar Resources: GSS and Western Goldfields: WGDFF.OB.
DISCLOSURE: No position in GACF.OB. Long CPNE.OB, GSS, WGDFF.OB.
Like this? Subscribe to RSS | Comment | Bookmark on del.icio.us
Aug 26, 2007
John Gilliam (via Seeking Alpha) suggests that Think Partnership: THK should build scale in its internet lead generation business by buying Commerce Planet: CPNE.OB:
A THK/CPNE marriage would be a good fit for several reasons including the synergies resulting from each company’s strong presence in the “home based business” lead generation space and the potential for THK to leverage the very low cost fulfillment infrastructure already built out by CPNE. Probably the greatest benefit from such a merger would come from THK’s unique ability to address the only apparent significant operational issue that has recently plagued CPNE. In its last 10Q, the CPNE CEO disclosed that the company’s very profitable affiliate program channel had experienced some issues related to affiliate fraud / chargeback scenarios that might limit the company’s willingness to use that channel that had been so productive in the past. Think Partnership’s patent pending fraud prevention technology (ValidClick) that is integrated with its Kowabunga affiliate platform could curtail such issues and allow the company to operate in that channel that allowed them to book profits in Q1 2007 that were about 50% higher than they were before or after.
Joining THK’s direct division with Commerce Planet would double the size and profitability of THK’s direct division and enable it to have the scale to be among the most significant players in the lead generation space. It appears that THK could offer a premium of more than 100% of CPNE’s current stock price and still have a deal that is highly accretive. Further, bringing the CPNE assets into the fold would create another significant revenue stream for Kowabunga’s click fraud free affiliate network and possibly other THK divisions due to CPNE’s spending over $10 million per year for online advertising.
I agree with Gilliam’s general proposition that internet lead generation companies are undervalued, and as a shareholder I would welcome “a premium of more than 100%.” Strategically, if and when the economy slows, lead generation for home business opportunities (a focus of both CPNE and THK) should become more valuable. The possibility of a combined entity is intriguing, but keep in mind that there is no evidence the companies are presently considering a merger.
DISCLOSURE: Long CPNE.OB; no position in THK.
Like this? Subscribe to RSS | Comment | Bookmark on del.icio.us
Aug 15, 2007
- Commerce Planet: CPNE.OB took a beating after announcing mediocre earnings. CEO Michael Hill said he was pleased with the quarter (I’m not), adding: “we executed on initiatives to more effectively spend our advertising dollars increasing our efficiencies and performance results. We expect this strategy to lower our future operating costs and protect the quality of our ongoing revenue stream.” Frankly, I think companies that blow their quarter could do with a little less corporate doublespeak. I was wrong on this position, but I don’t plan to stay wrong.
- Investors also punished China 3C Group: CHCG.OB after its quarterly earnings announcement. I didn’t think it was that bad but if the stock continues to trade down I will exit this position as well.
- Air Industries: AIRI.OB reported a slight loss, but promised a strong second half on a record backlog. “The improvements in revenue and gross margin, as well as progress with our consolidation strategy, as exhibited in the second quarter of 2007 are a harbinger of the growth to come in the second half of the year,” said Peter Rettaliata, Air Industries Group President and Chief Executive Officer. “Importantly, resulting from our growth initiatives, we look forward to a return to profitability in the second half of the year.”
- What’s going on with gold shares? All kinds of miners including Western Goldfields: WGDFF.OB, US Gold: UXG, Crystallex: KRY, and Agnico-Eagle: AEM are off almost 10% today, yet gold futures were only off slightly. We’ll find out soon whether it was a fund liquidation or, as James Sinclair has posited, OTC derivatives blowing up. I have cut my gold exposure considerably but still own some Goldenstar Resources: GSS, a little Crystallex, and a few other small positions.
- As expected, Accredited Home Lenders: LEND sued to enforce their buyout contract. However, Lone Star pushed back the deadline for the tender until August 28, which indicates they are likely to try to renegotiate on price. I am told that LEND has a strong argument in the pending litigation.
- I’m doing some very exciting things at my primary job that will slow down my pace of posting until mid-October. Please stay patient and understand if I don’t get to your questions right away. Thanks.
DISCLOSURE: Long GSS, KRY, CHCG.OB, AIRI.OB, CPNE.OB.
Like this? Subscribe to RSS | Comment | Bookmark on del.icio.us
