To OTC Journal Members:
 

My Planet Conspiracy Theory (OTC BB: CPNE)

I spend a fair amount of time dealing with questions and theories about Commerce Planet. Investors are concerned, and the recent behavior of the stock is exacerbating everyone's fears.

I have a conspiracy theory. I'm not sure if there's any truth to it, but it does make some sense when you think about it. After all, here's what's changed in the past month:

• First of all- the price. The stock was $3.40 at the end of February, and is currently residing at about $1.80.
• Secondly- the company's bravado. In the past, the management of CPNE consistently put out a series of news releases updating investors on all sorts of issues related to their performance. The tone of past disclosure was almost boastful. Until last, week when nearly forced to deliver some news by the free fall in the stock, the company had gone completely dark. 
• On February 14th, CPNE announced it had retained Roth Capital Partners as their investment banker.
• This happened the day before the company announced as institutional investor has picked up 4.8 million shares from insiders at $1.90 per share.

• CPNE has given the market no indication their corporate performance has slowed in any way. There is no indication the company won't continue its current 4 quarter streak of increasing sales and earnings. Based on the company's disclosure, there is no reason to believe earnings won't come in at $.10 per share or better.
• CPNE has not stopped buying back their shares in the open market.

Here's a headline from February 22nd: "Commerce Planet, Inc. Provides Pre-Filing Guidance for 2006 Results". In 2006, the headline might have read something like: "Commerce Planet announced outstanding Pre-Filing Guidance for 2006 Results- Company Expects To Announce Record Revenues and Profits".

It seems like CPNE has completely changed personalities- from a boastful loud mouth to a demure wall flower. This change of personalities has investors wondering why?- Have the fortunes of the company changed? Combined with the poor performance of the stock, this new persona has investors wondering if the streak is over. Wondering, and rightly so.

This leads us to my conspiracy theory. Is the company taking a turn for the worse, or is there some other reason for the schizophrenic personality change?

Consider the following. Until the recent investment from Jeffrey Feinberg of JLF Asset Management, it was business as usual. We had a one/two punch- the 4 million purchase at $1.90 from Feinberg then the announcement of the IB relationship with Roth Capital.

Then they stepped in, and since then there has been a personality change. Why- could it be because they wanted the stock to go down? Because they wanted to create doubt in the minds if individuals- simply stated- because they want to pick investors to dump it so they can accumulate it cheaper.

I don't know exactly where the company stands, but here's what I can surmise. Prior to buying the 4 million shares plus, Feinberg or his analyst signed a non-disclosure agreement to get a hard look at the books. Since the fund was not an open market buyer, this would be perfectly legal.

He wouldn't have invested in 4 million plus shares in mid February without the benefit of some knowledge. Those shares are in registration right now.

My guess- and that's all it is- the company is on track and will deliver north of $.10 in Q1. Feinberg wouldn't be in if the business were turning south.

My SSL at $2.25 has turned out to be a good call, and the recent BLOG suggesting a rebuy at $1.60 has so far turned out for the best. Keep your seat belt tight and eyes on the facts for this one. Mr. Toad's wild ride could continue.

Today's edition was just some musings for a long holiday weekend. Clearly, we won't know for sure until the company releases Q1 numbers. If history repeats itself, this will happen the last week of April. 
 

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