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There is a BLOG entry on recent new idea Dermisonics (DMSI): Dermisonics plans to revolutionize the way insulin is delivered to chronic diabetics by making it available through skin patch instead of a needle. Only a few drugs with molecular weights of under 100 can be delivered through skin pores. Dermisonics has figured out that they can deliver high molecular weight drugs with the use of highly refined ultrasound. On Friday after the market closed, DMSI announced another application using the same platform: they are working on a portable device for both home, hospital, and emergency to more effectively sterilize wounds. Check the BLOG to read all about it.

To use the BLOG, simply go to the home page at www.otcjournal.com - the BLOG will scroll down automatically on the right side of your screen. The most current journal entries appear in the middle of your screen. Check back frequently for updates particularly when stocks are moving to overbought or oversold levels or in volatile markets. Your questions and postings do not automatically appear, so don't bother posting the same question multiple times. I personally go through to moderate and respond to every question.
 

UpSnap (OTC BB: UPSN): Shadowing Google's Bubble

Stock market bubbles are where big money is made. Owning stocks in a bubble as it forms equates to profits. Investing in stocks became everyone's favorite pastime in the 90's as the greatest tech bubble of all time took the NASDAQ to 5000 plus. The bubble burst, and that index still struggles with 2000 five years later, but it was a hell of a ride as the bubble inflated.

This year's bubble has been energy- the worst kind of bubble for the rest of the market. When energy stocks are driven higher by rising commodity prices it's bad for the economy, and therefore bad for all other categories of stocks.

There is one other bubble still inflating in the market today. Virtual search, fueled by behemoth Google (NASDAQ: GOOG), is forming a massive bubble. Yahoo!'s not doing too bad either. Google's stock delivered a watershed event this past week by eclipsing the $400 mark. Amazing.

Google has been trading for about 1 year now. The original IPO price was $80. I recall vividly how the talking heads on CNBC trotted out every valuation expert they could find: Consensus- Google was overvalued at $80. $60 would have been a better mark, and don't look to make too much. Wrong!!!!!

Today Google sports a market cap of $111 billion on $5.25 billion in annual sales. In one year the stock has more than quadrupled. Their business model: "Pay per Click". Advertisers pay for every click, and advertisers love the model. Why- because they get a tangible result for dollars invested.

While I have admittedly been ice cold of late you'd be making a mistake to count me out. The only mark I've hit was the call of a perfect entry level on HDY at $1.55. Both myself and the OTC Journal subscribers are long overdue for a couple of big wins. To wit, I have uncovered the hottest and most talked about new entrant to the BB market in some time. It's what we in the industry refer to as a "Shadow Stock"- This stock is shadowing one of the biggest bubble stocks - UpSnap is the Google Mini Me, and the micro cap world is buzzing about this one.

UpSnap (OTC BB: UPSN) has only been trading publicly for about three days now, but it has generated a lot of "buzz". Early volume levels indicate a great deal of interest.

Upsnap is the Google of cell phones. Instead of "pay per click", the UpSnap business model is "pay per call".  Their technology has already been written about in Forbes, Cnet News, Silicon Valley Watcher, and Red Herring.

Here's how it works: 92% of US cell phones have SMS capability- SMS standing for Short Messaging Service commonly known as Text Messaging. You simply text a message to 2SNAP (27627). The message body contains what you are searching for: i.e. Starbucks, McDonalds, whatever. Along side you display either the local area code or zip code, and then send your text message. Boom, 30 seconds later your search results come back to your phone. You can see how it works on the demo alongside.

From there, you can toggle down to the place you want to go, highlight, then hit send for directions. Or, you can highlight the target, text back one letter (a,b,or c), and get more information or a return call from the target.

I tested it on my own cell phone, and it directed me to a Starbucks three blocks from where I was sitting. It's takes a little getting used to, but if you are good at texting, it's easy. Try it on your own phone.

Advertisers using the system pay for each directed call- hence the "pay per call" revenue model. Users can employ the system for directory help. To the cell phone owner it's free vs the $1 to $1.50 charge most carriers now hit you with for directory assistance. The 15 to 25 year old user will flock to this service.

UpSnap has partnered up with one of the majors (to be named later) and has spent the last year building out an electronic nationwide Yellow Pages. 

The younger set has become adept at text messaging. Texting in a business followed by the area code or zip code is a snap, or in this case an "UpSnap".

The company came public this past Tuesday, the 15th of November through an RTO (reverse take over). The event was disclosed in an 8k filing on Wednesday, the 16th. The stock started trading gangbusters almost immediately. It traded 100k shares Tuesday, 380k shares Wednesday, 658k shares on Thurs, and finally cooled off a little on Friday when it took a little breather and only traded 160k shares. Not bad for a company no one knows about. In conjunction with the RTO, the company completed a private placement of a little more than $2 million. 

The presentation you see here is an hourly chart. Over the course of this past week the stock has many more green bars than red bars- meaning it closed higher more hours than lower. Fortunately, the stock finally cooled off a little Friday - no doubt profit taking from early entrants. If it had not pulled back to a 38.2% retracement, I wouldn't have published on this company. It would have been too high. It's still pretty stretched, but so is Google.

So, why is this new entrant so hot? In part, it's because of the management team as follows:

• Tony Philip, CEO: Philip was CEO of Lycos Europe when they completed their $5 billion IPO in 2000. He was also the brains behind two other major internet commercial successes- Vivisimo and Magellan- both were bought out. 
• Wendell Brown, VP Technology: Brown was the technology brains behind eVoice (sold to AOL in July of '01), and Teleo (VoIP) sold to Microsoft in August of 2005. 
• Richard Jones, VP Content and Distribution: Founded Fortune City ($400 million IPO 1999), and Warner Bros JV (Sold to Time Warner/AOL).

One account I have read pegs this stock at $5 in three months and $8 in six months. I don't know. I know it's time for a big win. The good news is the bad news. This stock is going to be hard to accumulate, but it could trade gangbusters as the company comes out of beta testing and moves to a commercial model. Advertisers are willing to pay upwards of $5 per call. Publicity is bound to surface for this new service.

European fund managers who know Tony Phillip and his management team are rumored to have a big appetite for this stock. Tough to say what's going to happen here, but I know it's not going to be boring. Climb on to Mr. Toad's wild ride and hang on. Since next week is the generally quiet Thanksgiving period, we might have a decent shot at this stock.

If this stock is trading wildly one way or the other on Monday morning, look for a BLOG about 1/2 hour after the open.

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