No doubt today would be a good idea to ask yourself why you're paying 6x what the shares sold for last month. Two POS companies merged just means One POS company will remain. There's nothing positive about this.
It was indeed 20c a month ago and nothing's happened to make the company worth 700% more overnight except there's some corrupt promoters behind this pushing it onto retail chumps. Very soon they're going to become dumpers and you'll be asking yourself how you could be so stupid.
You do realize that when that deal was done it was probably worth less than 20 cents as it was 18 cents less than a month ago. So in conclusion, if you don't own it and you don't feel like an idiot, you have no worries.
Sentiment: Strong Buy
been watching. It popped big, then slightly retreated but is holding now, creating a new base. It was $1.37 all day, then popped to $1.50 right before the close.....
How do you feel about the fact the company values their own shares at 20 cents when it comes to making an acquisition even while retail chumps are paying $1.40??? Like an idiot? I would if I owned the stock.
This information about the 20c share price unsurprisingly got left out of yesterday's Press Release announcing the merger would go ahead. Instead you'd have to go to the SEC website to find the actual details. Fortunately someone has and provided a link.
How does it feel when you discover that the company who's stock you're paying 1.50 for announces they're buying another company and issuing them new shares priced at, what, 20c each??
To buy Scribe for $6.4M 'the Company (JOB) will issue 640,000 shares of Preferred Stock which is initially convertible into 32,000,000 shares of Common Stock and a warrant to purchase up to 6,350,000 shares of Common Stock at a purchase price of $0.20 per common share.'
Assuming they'll convert the warrants (who wouldn't with an immediate gain of 700% priced in!!!) that's a total of 38,350,000 new shares.
JOB currently has 26,000,000 shares so this is 150% dilutive.
But the really hair-raising number is the difference between what Scribe is valuing JOB shares at - 20c - and what the market is valuing JOB at - 1.50+ per share. Under the current share price JOB is paying the equivalent of $57.5M for a $6.4M company!!
Clearly something is seriously out of whack if they can't find a bigger more profitable company to buy with that many shares. That's because to other businesses JOB shares have about as much value right now as Monopoly money.
While I see some people on these boards cheering the recent (large) Q4 profit, it's not repeatable. Notice in the press release that the company mentioned receiving a $1 million rebate for workers comp in FY 2014, which I presume they recognized in Q4. Notice in the prior 3 quarters, they had gross profit dollars of $2.9 to $3.1 million each quarter. In Q4, GP$ were $4.3 million. This was the one-time benefit of the workers comp refund. Put another way, they had gross margins of 29% to 30%, that all of a sudden last quarter went to 45% due this refund. It's not like the company all of a sudden, in a 90-day period (Q3 to Q4), increased their performance by raising gross margins 1500 basis points. Look for gross margins to be back in the 29% to 30% area in Q1, and gross profit dollars below the level of expenses - thus, resulting in a loss. That's completely in line with a normal quarter from the company. I'm not long nor short the stock. Just someone who is in the staffing industry, who had made good money investing in public stocks in the industry, and keeping an eye on this situation. But certainly not a buyer here. After the close and report for Q1 ended December, and people see that Q4 was an anomaly and not going to be repeated, this stock will be back under $1 where it belongs.