Email : info@otcjournal.com
URL : http://www.otcjournal.com
To
OTC Journal Members:
The behavior of the microcap stocks
we follow is characteristic of the mature stages of a bear market. After
several months of being dead on our computer screens, stocks are starting
to surge on volume. Each of these surges is being sabotaged by sellers,
but that is to be expected. As the stocks start to come back investors
waiting for liquidity opportunities use these surges to raise cash.
Each volume surge is another step
in the clean up process and takes us a little closer to a real break out.
As more time goes by we close in on the return of the bull market. More
sellers are taken out thereby reducing overhead supplies of stock. Companies
have extended opportunities to provide evidence of real fundamental progress.
We are convinced another three months of churning takes us through the
end of this correction, and deserving micro cap stocks will trade higher
in a meaningful way.
First, a quick comment on NetSol
International which we featured in Wednesday's edition, and then onto
the main subject of the weekend edition- PawnBroker.com (OTC BB: PBRR).
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NetSol
International (NASDAQ: NTWK) |
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In our mid week edition we brought
NetSol International to everyone's attention, and speculated that
the stock might surge this week. It did today- hitting a high of $31.125
shortly after the market opened on triple its normal volume. The stock
closed at $29.375. Glad we finally caught one for you.
If you took advantage of the idea
and own the stock in the $27 range you might get another surge Monday morning.
Keep your eye on the stock at the open. We are hearing rumors that today's
surge on triple the average volume is just the beginning. However, keep
in mind that this stock has a history of trading above $30 mid month, and
backing down to the low 20's towards the end of the month.
In the interest of full disclosure,
one of our editors now owns 800 shares in his personal account, and can
buy and sell the stock at any time at his discretion. This should be viewed
as a conflict of interest if you are considering purchasing the stock.
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PawnBroker.com
(OTC BB: PBRR) |
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We probably get more email traffic
on this stock than any we cover. We know many of you bought the stock was
hot back in March, and we don't blame you for being concerned about the
future of the company if you've been watching the price. Until this week
the stock was behaving as if the company was going out of business.
We had the opportunity to interview
Joe Lederer (CFO) and Bill Galine (Chairman) on Thursday. We can tell you
this: management is very optimistic about Pawnbroker's future.
The stock has traded poorly because
investors are concerned about inadequate funding. Also, the market tends
to view this company as strictly a Dot.Com. Those stocks are badly
out of favor right now.
We believe it is a mistake to view
this company as strictly a Dot.com. The Pawnbroker industry is 2,000
years old, but is highly fragmented and desperately in need of a company
to modernize its infrastructure. Management has its roots in the heart
of the industry, and a competitive advantage in creating and selling modern
B To B solutions from which the company can profit. This end of the business
will provide a whole separate revenue stream from the transaction based
revenue model on their consumer web site.
Last month the company announced
a funding agreement for a $24 million equity line of credit with a large
institution. The market was not impressed- the equity line of credit will
supply the company with badly needed cash, but can create an excess supply
of free trading shares at a discount to the prevailing market. Furthermore,
the equity line of credit is not available until the company completes
an S-1 registration statement with the SEC. This is generally a 60 to 90
day process.
Over the last two days we witnessed
a resurgence in both price and volume. Investors are jumping
back into the stock with renewed confidence. In the last two days Pawnbroker.com
(OTC BB: PBRR), which normally trades about 10,000 shares per day, has
traded over one million shares, and bounced from $2 to $2.44. The stock
has begun what we hope will be a successful recovery process.
Today, after the market closed, the
company announced that it closed a funding for $2 million. One million
shares were purchased at $2 with a $3 warrant attached. This helps explain
the resurgence in price and volume.
Furthermore, the company is launching
a new marketing campaign. There are several broadcasts featuring the company
scheduled. Here is the timetable:
-
CNBC: Tomorrow, August 12th at
12:00PM Eastern Time; 9:00 Pacific
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Bravo Network: August 14th at
8:00 AM Eastern
-
Bravo Network: August 18th at
8:00 AM Eastern
-
Delta Airlines Inflight TV-
All through the month of August
The video of the upcoming broadcasts
can be viewed at the home page of the company's web site at www.pawnbroker.com.
Now would be a good time to review
our Rules For Successful
Microcap Investing. You can find it on our home page at www.otcjournal.com.
We spent a long time preparing this section. If you had read it you might
have had the courage to pick up shares of Pawnbroker when it was
quiet and no one wanted the stock. If you own this stock at much higher
levels you really have no choice but to add to your position at these rock
bottom prices subject to your belief in the future of the company.
Several other web sites have recently
featured information on Pawnbroker which helps explain the recent
volume surge. The most unbiased appraisal of current events at the company
can be found by clicking
here. This article also focuses on their Investment Banking relationship
with Wall Street institutional boutique firm Ladenberg Thalman as
a major positive for the stock. We agree with this assessment.
We are very biased towards this company
as we believe they have an excellent business model in a great market niche.
Once commercially viable this type of niche company could be an ideal acquisition
target as large internet players continue absorbing their little brothers.
A return to its former high of $17
might seem ridiculous from these levels, but we have seen it happen before
with many micro cap stocks. The stock might back and fill as with Blue
Zone, but this stock was so oversold that investors have been looking
for an excuse to buy at these levels.
Here is the complete text of the
news release for your review:
Friday August 11, 5:29 pm Eastern
Time
Press Release
SOURCE: Pawnbroker.com, Inc.
Pawnbroker.com Announces Equity
Investment
RENO, NV, Aug. 11 /CNW-PRN/ - Pawnbroker.com,
Inc. (OTC BB: PBRR), the online provider of previously-owned, higher value
merchandise for immediate purchase, today announced that it has closed
a private placement for gross proceeds of $2 million to be used for working
capital purposes.
Pawnbroker.com completed the private
placement of 1 million units at $2.00 per unit, each unit consisting of
one share of common stock and one warrant exercisable to acquire one additional
share of common stock at $3.00 per share.
``This financing reaffirms the investment
community's confidence in Pawnbroker.com's business plan and strategy and
will provide us with working capital until we are able to draw down on
the equity line of up to $24 million that we have in place,'' said Joe
Schlader, President and Chairman of Pawnbroker.com.
About Pawnbroker.com
Pawnbroker.com, an emerging e-tailer
of previously-owned, higher-value merchandise available for immediate purchase,
is the world's first online network of pawnbrokers to sell in a global
marketplace. Consumers can expect to find high-quality merchandise such
as jewelry and gemstones, watches, electronics, musical equipment and collectibles.
Pawnbroker.com plans to offer the pawnbroker industry powerful services
including a global online sales channel, industry information and news,
and communication tools. Pawnbroker.com was founded in April 1999 and the
Company headquarters are located in Reno, NV. For further information about
Pawnbroker.com, Inc., visit our website at www.pawnbroker.com.
Pawnbroker.com and the Pawnbroker.com
logo are trademarks of Pawnbroker.com, Inc. All other company and product
names are mentioned for identification purposes only, and may be trademarks
of their respective companies.
This press release contains forward-looking
statements within the meaning of the Private Securities Litigation Reform
Act of 1995. Such forward-looking statements include statements regarding
the Company's future business plans, product and web site offerings, business
opportunities and expectations. All forward-looking statements are subject
to certain risks, uncertainties and assumptions, including changes in market
conditions in the industries in which the Company operates and the Company's
ability to raise sufficient financing to implement its business plan. Some
of these risks are more fully described in Pawnbroker.com's registration
statements and reports filed with the Securities and Exchange Commission.
Should one or more of these risks or uncertainties materialize, or should
the assumptions prove incorrect, actual results may vary in material aspects
from those currently anticipated.
SOURCE: Pawnbroker.com, Inc.
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Things are starting to pick up. Blue
Zone made a try at a breakout, and now PawnBroker is following
suit. Small stocks are demonstrating a propensity to surge up. The bear
market is maturing and the economy appears to be cooling off. We
are setting up for a return to a raging bull market for small stocks by
year's end, if not earlier. We have weathered the storm and our patience
should be rewarded with a return to former levels and then on to new highs
for some of these stocks.
Hopefully we will have more good
news to report next week. Stay tuned.
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