The same people, who a few weeks ago were saying that a penny stock can't be judged like a blue chip, are now preaching that the stock is over valued because of market cap, price/earnings, ect.
Not only is LFBG a penny stock, but it is a tech stock. This should be trading similar to a bio-tech. If a bio-tech had all of the positive news and progress that LFBG has had, it would be thru the ceiling right now.
Let me outline the similarities:
1. The main product for techs and biotechs are intellectual property.
2. These intellectual properties require years of research and development with little or no revenue.
3. Bio-tech products are required pass 3 phases of clinical trials. After each phase is approved by FDA, the stock usually soars. The market test last year at Walmart was LFBG's equivalent of a clinical trial and the stock did soar afterwards.
4. After a bio-tech product receives final approval from FDA, the stock explodes, even before any revenue is realized.
LFBG games being accepted by Walmart is similar to a FDA approval. Not only that, but sales are big in Walmarts, not to mention the other stores that sell them.
If you decide to invest in LFBG at this time, it should be because of potential, not current financials. As good as sales are right now, it is being done with only the PC games which only represent a small percentage of gamers. The games are proven and still have the giant potential of WII, XBOX, & PS3. With these, it's not if, but when.
This stock is a no brainer and a steal at the current price. If you handicap it like a penny tech stock should be handicapped, then it is way undervalued right now.
Bottom line is this! no matter how much sucess the company may have in the near term, no significant share price increse will occur while having such an outrageous amount of authorized shares outstanding. Had this company have 10 million shares outstanding, this stock would not be trading here on the OTC that's for sure. Lower the A/S, float, all while solidifying the business structure, along with continued solid revenues and profits and this stock would raise plently of more eyebrows. Until then, penny land is all it will see for some time.
Make absolutely no mistake about it, the only reason this stock is trading at the sub-penny levels, and on the OTC is due to its outrageous amount of A/S. Deal with it!! or the company can start performing some reverse stock splits to lower the A/S down substantially. If not, pennyland is where you will be for some time. The company does not have 2 million dollars to be buying such significant amount of its shares back at the moment.
You would be right IF
1) LFBG does become multi platform and
2) They reduce their Authorized shares.
The first is a matter of having the personnel to do the conversion programming.
The second is a matter of Management having the faith and guts to follow the plan they laid down earlier this month.
So far, on the second point, they have chickened out on the 3 for 5 reverse split. They are not going to ever get to $3.00 a share and get on NASDAQ or NYSE without a number of reverse splits.
I liked their small steps plan for achieving this, but was uncomfortable that they didn't announce a concurrent reduction in A/S to go with the reverse.
That meant they were free to issue up to 1.8 billion new shares with only an assurance that they intended to reduce outstanding shares.
Assurances can easily be broken as many of us have learned from other penny stocks.
But your point that tech companies often go years without being profitable and yet their stock prices shoot to the moon is spot on.
Not just Tech stocks either. Amazon had losses every year until 2003 when it made 9 cents a share.
Yet the price of Amazon stock was $7 at end of 1998, $60 at end of 1999, $65 at end of 2000 (BUT reached a high of $85 during Feb, Mar and Nov of 2000), $19 at end of 2001 (but rallied from a steep drop to $31 from Feb-Jul to hit $40 in Aug before continuing its plunge), was $18 at end of 2002 and still only finished at $20,50 at end of 2003 even though it was their first year with a profit. It did finish 2004 at about $50 with a profit of $1,45 per share. But that was on SEVEN BILLION dollars in sales with 588 million profit (2003 had only 35 million profit).
So a company with $1.411 BILLION in losses in 2000 closes that year with a stock price of $19 and rallied to $40 in Aug after starting the year at $65.
That was after 1999's loss of $720 Million while stock price was starting the year at $60, rose twice to $85 and once to $81 and ended the year at $65.
All together in the 5 years of straight losses, Amazon lost a total of $2.97 Billion while having a stock price that varied from a start of $3-4 on up to $85 per share, spending most of those 5 years and the time with the highest losses in the range of $20-85.
The funniest thing is the year with the lowest losses (If you consider $124 million a low loss) was the year with the lowest stock prices varying between $3 at the start of the year to about $8 at the end of that year.
Other than that year it seemed the higher the losses, the higher the stock price.
Amazon seems to be a more apt comparison to LFBG since they are both suppliers of retail merchandise, though obviously on a much grander scale in the case of Amazon.
So the fact that LFBG is losing money DOES NOT mean it can't rise in stock price. In fact, if it is ahead of the curve in the arena of non-violent and less violent gaming it could have similar success as Amazon had only on a much smaller scale.
It all depends upon what management does to broaden its customer base and reduce A/S.
How much thou dost say but with so little effect.
All the facts that you list here are true, to a degree. But I think you missed the whole point of this thread. LFBG stock must be treated in a way similar to a biotech stock for the simple reason that it's selling on hope. And when it comes to hope, LFBG has a lot of it.
Ever heard of Madden? Our CEO headed that one up.
PS3, Wii, Xbox . . . just a matter of time.
Walmart, hundreds of Christian bookstores, Salem radio, ads in movie theaters, stock buyback . . . happening now.
Why can't you see this stock is in a company with no end of a bright future, with a great CEO who knows more about getting great games into major retailers than the rest of us collectively ever will?
And I'm no pumper. Originally I invested in LFBG in 2008 because I believe in what they're doing. I've been long ever since.
I am back in for the Dec run up. I got out because of the confusing turns, yes to reverse split no to reverse split, etc... WANTED THINGS TO STABALIZE. Now I feel we are back on track for 4th quarter. With the same outlook I had in Sept.