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Comments in the BLOG

There is a new BLOG posting today on a major breakthrough from our friends at PhotoChannel (OTC BB: PNWIF). Those of you who follow the story know I started with this one at $1.80 in October of '06, and today the stock has broken out. As I write this, it is trading in the $4.50 range, about $.50 below the all time high. PNWIF has inked a contract to provide the online interface for all the photofinishing needs for Costco US (NASDAQ: COST), and the stock is responding in kind. A major coup.

On another note- if you read my BLOG posting on Apple yesterday, you should have noted I bought 10 Jan $155 calls at $16.60 (total investment of $16,600). In the spirit of full disclosure you should know I sold them today for $24.50. I got really lucky. AAPL has just been tanking of late, and this morning the company announced it was in discussion with China Telecom to bring the iPhone to China. The stock was up 15 points, and I couldn't resist the one day profit. As a hedge, I am keeping my Jan 130 calls that I picked up in August at $12.30. At this rate, I'll be able to afford a new iTV for the holiday season as a gift to myself, compliments of my investments in the options.

The BLOG is your opportunity to ask questions and offer comments. I will make an effort to answer every legitimate question. If I don't know the answer, I will contact the management and get the answer. Alternatively, if you have questions you don't want publicly displayed, you can always email me directly at editor@otcjournal.com.

To use the BLOG, simply go to the home page at www.otcjournal.com - the BLOG scrolls down from the upper right hand corner. The most current journal entries appear on the right hand side of you screen. Check back frequently for updates particularly when stocks are moving to overbought or oversold levels in volatile markets.
 

Spicy Pickle (OTC BB: SPKL): Momentum Continues

You are looking at an image of the front of the latest Spicy Pickle store to open. It is the company's second Indianapolis location, and it has been open for about a week. I am told it is a beautiful store, and sales are extremely robust right out of the gates.

This store is located in a newly refurbished high end Mall, and is one of the larger stores in the chain. The first Indianapolis store is going gangbusters, and the Spicy Pickle franchisee is very excited about the prospects for this location as well. There are 8 more stores committed to in the Indianapolis area.

In addition to announcing this new store opening, SPKL also announced two more leases had been signed for 2008 openings, which will bring the total number of stores opened and operating in the system to 42. One store will be the third located in the Austin, Texas area. The other will represent the second store in the San Diego area. Another 11 are planned for San Diego.

SPKL believes it is still on track to have 40 stores opened by year's end, but one or two openings could fall into January depending on final inspection approvals, etc. In addition to the two new leases signed for 2008 construction, there are a number of other new locations nearing final lease terms, and a number of potential new major franchise opportunities coming close to being inked. In short, the company has tremendous momentum. It looks a near certainty there will be 100 stores in the future- the bigger question is how long to 300 stores?

Early returns suggest SPKL is going to have a great year in 2008 with multiple new store openings, new franchisee signings, and a move towards establishing company owned stores.

Let's look at the current chart:

SPKL rocketed from the opening prints in the $.50 to a high of $2.02. It was entitled to take a breather, and pulled back along with the major drubbing the markets have all taken of late.

Once it started down, it made nearly a perfect 61.8% retracement of the entire move, and rebounded quite nicely from $1.08 to $1.45. Today, the stock is camped quietly in the high $1.30's on light volume.

I have been getting emails from subscribers wanting to know if it's too late to jump on board. Here is my answer- the company will be out with Q3 numbers pretty soon, and I expect them to announce major paper losses. There is the cost of going public along with the costs associated with being a pub co- a lot of which was paid for in stock. As the stock went up, the expense on paper went up. If the market interprets the Q3 numbers negatively, the stock could sell off. A lot of these expenses are one time events.

In addition, the management at SPKL wants to expand its program to establish company owned stores, and needs capital to pursue that course. As is typical with all public companies, SPKL could arrange a financing with equity which would likely be priced below the market. The investors would not be able to obtain free trading shares- hence, the discount to the prevailing market. If this happens, and the market interprets it negatively, this could also represent an outstanding opportunity to accumulate more shares.

In short, I believe SPKL will be much higher in the coming years. I still believe it is eventually a $3 to $5 stock. It has been tough to buy because it trades so well. If you're not thinking short term, the current $1.30 to $1.50 range should pay off handsomely over time. If you are looking for dips to accumulate, look for Q3 numbers and/or news of a financing to knock the stock off a bit. I am far from sure it will happen- this stock trades more around the growth that is already built in for the next two years. If it happens, be ready. It didn't spend much time below $1.20, and it probably won't the next time, if there is one.

Here is today's press release for your review:
 

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