Planet Projections: Investors are From Missouri On This One Now

CPNE has simply lost all its credibility as a public company, and I believe it will take some time to restore, if ever.

I read yesterday’s press release concerning Q4 ’07 and the outlook for ’08. My initial thought- this is the first honest and useful information out of this company in many months. Kudos to the new management team for ushering in a new era of disclosure for investors.

If I’m reading this information correctly, they plan to evolve up to an ecommerce company, in the business of providing a full slate of ecommerce related services to businesses requiring a web presence.

Perhaps, by moving in this direction, they will evolve from a “selling the dream” to individuals who don’t really have businesses, to servicing a more established business by facilitating its internet persona.

New CEO Tony Roth appears to give a pretty good look at the immediate future, admitting they will lose $1 million on $4 million in sales in q4. A refreshing change.

It would appear they are exorcising the past management’s mistakes in pretty short order, taking their lumps, and moving on. Lots of “one time” and perhaps “non-cash” expenses.

If you buy into the corporate performance projections for next year, the stock is probably a buy right now.

Personally, I wouldn’t touch it- yet. The market cast its vote on the news by leaving the stock near its low, and no bids are appearing.

If they can deliver in ’08 under this new management team with a new business direction, the stock could be a lot higher. In light of recent history, I believe investors will be from Missouri on this one for a while.

Ever seen a Missouri license plate- they call themselves the “SHOW ME” state. That’s the market’s view on CPNE for the time being- SHOW ME, then I’ll believe.

On the plus side- if they can really move in this direction, and have thousands of real businesses paying them a monthly fee that recurs indefinitely, the next version of this company could be the real deal.

Comments and questions are welcome.

14 thoughts on “Planet Projections: Investors are From Missouri On This One Now

  1. I tried to ask a Q—but I never got called on. I wanted rto klnow the stastus of the cash being held by banks on all thosxe past charge-backs. Do you have any info or comment on that since you’ve mentioned it in the past. Also, do you think the new business model makes economic sense—at least as compared with the old one which has now been discredited??

    Editor: If the company didn’t answer the question, I can’t give you the answer. If they won’t disclose the information publicly, we won’t see it until the 2007 audit comes out in March. I do believe the business model could make economic sense if executed. I have zero information on what they bought with the acquisition- how many ongoing customers and who were they? Perhaps they covered it in the call. If they can provide services to real businesses that have ongoing operations, and do it in the same mass way they did when they were only “selling the dream”, that would be a business with real value and staying power. The market won’t give them the benefit of the doubt at this point- they will have to prove it to get a better bid. 

  2. You always spoke very highly of CPNE’s great balance sheet……How does their balance sheet look these days? Do they have enough cash in the bank to realize their new business plans? I hope so, I became an “investor” as I rode this stock way past your recomended sell stop at .70. Please advise

    Editor: As of the last report, they have about $6.5 million in cash, and debt of only $1.6 million- which was day to day stuff- no long term debt. The only thing troubling about their balance sheet is the amount of cash the banks are holding against customer complaints. In Sept of 06 it was $1.9 million- now, it’s nearly $5 million. That’s cash they carry on the balance sheet, but money they can’t use related to complaints of fraudulent charges by consumers. If that number starts coming down, that will be a big positive for the company. Yes- they have a strong balance sheet- but the bank problem needs to go away for them to be able to use the biggest portion of the cash on their balance sheet. I don’t know if it was discussed in the conference call. 

  3. THank you—they did list a number of BIG well known Fortune 500 companies who deal with Ivanta. Pls listen to the re-play and elaborate on this point if you can. Thanks.

    Editor: The earliest time I would have to do this would be toward the end of this week, but will do so. Thanks. 

  4. I simply have a comment regarding the credit card cash reserves. The written presentation that accompanied the webcast indicated restricted cash reserves of $4.9 milliion as of 10/31 and projected restricted cash of $2.6 as of 12/31.

    Editor: Thanks for the update- this would indicate there is a possibility the banks are modifying their very aggressive position, and allowing less reserve- or, they are simply doing less transactions.

  5. Do you know if Tony Roth has anything to do with the Roth Capital that works for CPNE? Do you think this company is for real or just got luckey?

    Editor: I believe the names are just a coincidence, but I could be wrong. Do I think the company is for real? I don’t know- I know they were for real for a while- the cash they collected was certainly for real. Then they stopped collecting as much, the banks kept a bunch of it, and they realized their business model didn’t have long term staying power. Whether they can change the model to having more value, and move it forward from here, I can’t say for sure. I do believe they have to prove it for the market to be willing to bid up the stock. That’s my view. 

  6. There’s news out today that CPNE may repurchase up to 2million in stock. “The Company’s management and Board of Directors continue to believe our stock is undervalued in relation to our industry peers,” stated Tony Roth, Chief Executive Officer. “By purchasing additional shares at the current prices, we believe we are sending a clear message to the market that we have the utmost confidence in our new direction as well as our ability to execute on our strategic initiatives.” That’s a vote of confidence from management.

    Editor: I believe it said they have the ability to repurchase $2 million, $1 million of which they already did. That means they can repurchase another $1 million. Also, their ability to do that ends at the end of the year. I’m sure they will extend it. It will take a lot more than $1 million worth of buying to get this one going. 

  7. Just a quick observation. On your quoting platform CPNE seems to have 0.23 EPS and are currently trading just above that. Would you consider this to be a screaming buy from a technical point of view? With the new management and all perhaps we could turn a pretty penny here?

    thanks,

    Editor: No- I believe this stock will not trade up until the company delivers major improvements in their performance. I believe it will be dead money for some time. I believe there could be nice technical rebounds in EFSF and TTGL- especially TTGL as it is a fundamentally strong company. 

  8. Did they already do their reverse split or is that still to come?

    Editor: There has not been a reverse split. The stock went from $3 to $.30 all on its own with no tricks. That could be to come. 

  9. New management took some good advice from shareholders and that was to buy back some shares which they did before the start of 2008. The PPs did not move much but it is a step in the right direction.

    Lets hope for more positive developments for 2008!

    Scott

    Editor: I don’t believe anything I have read lately is negative, so it seems they may have hit bottom corporately. Hard to say when the stock has hit bottom. They bought back 2 million and it didn’t seem to clean up the supply. However, under the buy back regs, they cannot move the stock up with their buying. However, this means the market was willing to sell them back 2 million shares. How much more is out there? 

  10. Are you following this company anymore? Just wondering if I should periodically check this blog anymore for CPNE thoughts? Or are you checked out of this company? Thanks for all the helpful views thought, very much appreciated.

    Editor: I have been waiting to see some financial results, which won’t happen until the end of March when they file their audited numbers. I don’t believe the stock is going to do anything until the company proves out its new business model. Investors won’t buy this one on their promises- just results. 

  11. showing a little life recently…
    still looking a little at this.. or moved on to better things?

    Editor: Can’t comment until they file their 10k- they filed for an extension, so they are late. 

  12. Looks like they are really going to be late with their 2007 Annual Report maybe by May 31. Now they have to re-audit their annual and quarterly reports for 2006 and 2007!!! Not good!

    Editor: Throw in the FTC investigation, and you have a mess. CPNE is showing no signs of coming back. This idea has probably run its course, and the management badly sabotaged its own success. I should have seen the writing on the wall long before $.70. 

  13. Commerce Planet Announces Investor Call for May 30, 2008

    Commerce Planet, Inc. (OTCBB:CPNE) today announced that it intends to hold an investor conference call on Friday, May 30th, 2008, at 5:30 a.m. Pacific to provide an update on the Company’s operations. The Company also stated that it continues to seek resolution with the FTC and will provide an update of its activities to investors on the call. Details for the call will be provided in a separate release.

    “We are looking forward to addressing our shareholders in order to discuss current operations and the traction we are making with regards to new business development,” said Tony Roth, President and Chief Executive Officer of Commerce Planet. “We remain confident in our transition plan to a full e-commerce business provider that offers the Iventa Web 2.0 Dashboard System™. In addition to our Iventa e-commerce solutions, our Legacy Media division is now well positioned to tap into the current, and growing, demand we see from companies who want to efficiently and effectively manage their e-commerce direct marketing campaigns alongside their online transactional businesses.”

    This should give shareholders an opportunity to learn about the 10-K filing and perhaps the FTC investigation update.

    The best news is the company continues to communicate with its shareholders unlike the previous management team.

    Editor: Might be worth a high risk punt at 10 cents, but I just don’t like companies that can’t get their financials filed. 

  14. do you have the date and price when you first recommended this stock
    please respond – thanks

    Editor: You can go way back in the archives and look it up if you want. There were two big runs in the stock over the several years I covered it. I think the first was from about $.50 to $2. The stock then came all the way back to $.18, and then 18 months later hit a high of $3.75. That was the top, and then it was all over.