Spring is busting out all over along with Photochannel. The stock broke a multi month downtrend or consolidation line yesterday, and is powering higher today- looking like it wants to head back to the all time high of $5 it hit in January.
Here’s the chart, showing the stock breaking out from its downtrend line:
It’s almost not a downtrend- more like a period of sideways, low volume trading- a consolidation period of three months wherein the stock traded between $3.50 and $4.
Here’s the news that’s driving the stock higher:
Apparently, image storage site PhotoBucket is being purchased by NewsCorp (Rupert Murdoch) for between $250 million and $300 million.
PhotoBucket boasts 41 million registered users, up from 32 million at the end of last year and 2 million in 2004. It now hosts nearly 2.8 billion images on the site.
PhotoBucket has a different model than PhotoChannel. Photobucket provides hosting services for free, and generates revenues from advertising. PhotoChannel has a transaction based revenue model.
However, shares of PNWIF are trading up nicely in sympathy with the PhotoBucket buy out news. It gives you some idea of the potential value of these internet properties.
In the past I have predicted both PNWIF and CPNE would eventually graduate to senior exchanges. I believe, based on price, you will see PNWIF find its way to the NASDAQ sooner rather than later. An upgrade from the Bulletin Board to the NASDAQ would probably be good for another point on the stock.
PNWIF is probably going a lot higher. As always, comments and questions are welcome.
You wrote: ” PhotoBucket has a different model than PhotoChannel. Photobucket provides hosting services for free, and generates revenues from advertising. PhotoChannel has a transaction based revenue model.”
I believe it would be useful to have an explanation about how Photochannel is going to beat “free”. Since I have no clue about either, further information would be much appreciated.
Paul
Editor: Sure- they don’t beat free- they offer two different services. If you want to store digital images with Photochannel, the price is the same- free- that’s what PhotoBucket does. However, if you want to upload your images to the website, then order prints to be picked up in one hour in your local CVS pharmacy, you pay for the prints. CVS then pays PNWIF about $.02 per print developed. That’s transaction based revenue.
I was wondering if there has been any consideration to the company providing preliminary 2nd quarter results. I also noticed huge volume in the US yesterday. Any idea who ws selling and who was buying? Not sure if that is an impossible question.
I’m still bullish on Photochannel as my gut is saying probable buyout. That’s simply a gut feeling.
Editor: Your gut and my gut are in the same gut bar right now having a cocktail. There is a big appetite for larger companies to get a foothold in the growth of this space, and Photochannel is an obvious target. Kodak is a likely suitor- having missed the digital photography revolution. The guys who run this company are all former Kodak execs. Day before yesterday there was a 250,000 share cross at $4.35- someone sold and someone bought. The fact that someone was willing to buy a block of that size in one trade is very bullish for this stock. My guess- the next major development is a NASDAQ listing.
PNWIF announced record revenues today and the stock currently is down 16 cents. Makes no sense to me; what are your thoughts on this? Any insights?
Editor: Here’s my thought- notice how the company never really disclosed the actual performance in calender Q1, and only talked about the six months performance. On a relative basis to calender Q1 of ’06, the numbers were up nicely. However, there was a big drop from calender Q4, and investors were reminded just how small this company really is vs the $120 million market cap. That having been said, I believe this idea is not about the current numbers. This is about an industry that is exploding with a very limited number of pure plays. PNWIF is one of the only public traded pure plays in this arena, and investors want to own it as a potential buy out candidate and/or for the general industry growth. That having been said, not would be a great time for the company to deliver another major event.
There are rumors that NASDAQ has approved and all that’s left is some paperwork. The symbol will be FOTO and PNWIF should start trading end of June.
On the other hand the CEO unloaded 175,987 shares.
Editor: I don’t know where to find information on insider trading on Canadian issues. If your information is correct on FOTO by the end of June, that would be welcome news. This one finally fell apart like all the others into the summer doldrums, but should probably rebound in short order- hopefully.
what do you make of todays trading. Pnwif seems to have stablized at 3.4 but took a hit these last few days. A NASDAQ listing sure would be nice
Editor: Yes, it would. I believe if it doesn’t hold in here, it is headed for $2.50.
Any thoughts on the recent drop? I’m surprised given a potential NASDAQ listing (July?), new clients, Walmart Music initiative and general growth in online digital printing.
Editor: Was going to write something on it this morning. This is one stock that really hadn’t gotten hit, so I guess it was inevitable out in front of the summer. The stock needs to hold here or it will probably head to about $2.50.
Have you had a chance to read the Reuters research report on PhotoChannel released yesterday. If so, what are your thoughts?
Editor: I have not seen it yet. However, I am sure the company will forward it to me sometime this week. Whatever it said, the market appears to like it, and the stock is trading some very strong volume and looking like it’s getting close to breakout mode. The guys who put in their $15 million at $3.60 are nearly at a breakeven again, and as we close in on $4, the NASDAQ listing comes back into sight.