Platina Gets A For Effort
August 29, 2008 @ 11:35 am
Unfortunately, I couldn’t attend the Platina multi media web presentation this past Wednesday. However, I did catch the replay last night, and I have some observations.
First, I want to give the company an A+ for effort in shareholder communications. The multi media presentation they put out gave investors the opportunity to go directly to their wells/drilling site and see what the company is up to. A few other client companies unnamed at this moment would do well to take a page out of the Platina Playbook.
If you take the time to sit through the entire 1 hour plus presentation, you come away with a feeling this company is now worth far more than where it is trading, and much better levels are out in the future.
The one improvement I would suggest- There was a great deal of time devoted to giving everyone a visual and verbal tour of all their wells- however, I would like to have heard exactly what each well means in revenue flow to the company.
Also, an issue that has been of concern is the steep rise in the number of shares I&O. CEO Blair Merriman stated shares were issued as collateral for loans, but once the wells began producing and generating cash flow, the shares would be retired. I would like to have heard more specifics on that issue.
If I heard the presentation correctly, Mr. Merriman stated the company is currently generating a annual revenue stream in the $6 million range right now, which would put the stock a lot higher. It’s difficult to peg a number that it’s worth, since the shares I&O are a moving target. I’m not sure how many are going to be retired, and how many others will be issued.
There are currently 11 wells drilled and either in production or going into production before the end of September. There are many more sites they have yet to explore.
Take an hour an watch the Webinar. It’s in the multi media section at the home page: www.platinagroup.com.
Here’s the chart:
After attaining an $.18 level shortly after introducing the company at $.12, the stock has seen a low of $.08. I set the SSL at $.10, so right now if you’re not long term you should be out. If you don’t understand this concept, go to the home page and watch my video on Suggested Stop Losses.
I think the stock is probably a no brainer for a move up from these levels as we move into September and October. The company is doing a very good job in the shareholder communications arena, and that sets the stage to develop a loyal shareholder following.
I wish I could pinpoint a good upside target price, but that will have to wait until I have better understanding of the capital structure.
Comments and Questions are welcome.
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Just wondering, correct me if I am wrong but the company mainly are drilling in Texas, does hurricane ike has something to do with the stock price going so low. Note I do not live in America so have no idea of the geography.
Editor: They are drilling almost exclusively in Kentucky. At their level, bad weather could only lead to a brief delay.
Comment by Anonymous — 9/10/2008 @ 4:59 am
have they produce ant thing yet? T don’t think so
Editor: They say they have 3 wells generating revs, and 7 more coming online. September quarterly numbers will tell the story. Stock is sure in the tank.
Comment by Anonymous — 9/9/2008 @ 1:18 pm
The stock took a beating today with almost double the normal volume. Didn;t see any news on the stock. Any information ?
Editor: No- I did not. Pretty frustrating the way some of these things are trading these days. I guess we just have to hold our nose and wait for the storm to pass.
Comment by Mike Oneill — 9/8/2008 @ 10:00 am
The CEO’s name is Blair Merriam. You might want to edit that out if you’re getting paid to shill for him.
Editor: Who cares- all I know is the stock is trading below my SSL of $.10- if you don’t like the idea, you should have dumped it- I guess you have to hit people over the head with a hammer to get them to pay attention to the whole story, not just what they want to read or believe.
Comment by Frank — 9/7/2008 @ 9:53 pm
What impact do you see for this in regards to boone pickens plan to greatly expand the use of natural gas in the usa
Editor: I hope it will create a lot of jobs and infrastructure build out as we evolve to a resource we have, as opposed to transferring our wealth to the cultures that hate our way of life. I don’t think it necessarily effects Platina- they will sell all the natural gas they can produce at market prices- market prices are falling, but their growth will be enormous. Energy stocks will do well again- and as we move towards the end of the year this one should start behaving a bit better.
Comment by rmuncy@sfg.com — 9/2/2008 @ 6:19 am
I have been reading your site for more than a year now. On the issue of spkl I should have sold at 2.00 bought in at.84 still hold ten thousand shares at .65. I quess part of the reason is I’m in the hole on everthing is that I look at the long term. Is this company going to be the next big thing in food service or is this another belly up thank you very much, see you! Some times I think nobody has any intergity in the business world but that’s my narrow view. Look at fre,abk,wm, great companies but I would be scared to make a trade even though they are at the bottom of pennyville. The truth and the facts are all distorted. Going back to spkl I’ve talk the people over in Denver it seems to be a serious operation but after I talked the next day the stocked tanked down to .55. On pltg this is fantastic but I but at .13 and it goes to .09 then buy at .091 and it rolls back to .09 it seems nobody has any patience at something so good and honest? This stock should be at least .30. I look back at historic data on big names like Ge,MCD,Wm,ect all were at a buck or less twenty years ago. Do we need twenty years on NIHK,SPKL,PLTG, for the big payoff or will they end up like enron, us air, and other chapter 11 bitches. Sinecerly Jim Ardito Kuwait
Editor: Dear Jim- I think it’s important to understand the far market wide picture- we are in a Bear Market. And, although it wasn’t obvious when it first started last November, it became evident by March this was the case. Bear markets are highly disruptive to price appreciation regardless of what companies do. For NIHK, SPKL, and PLTG- I personally believe we are all going to have to hold these stocks through the Bear Market cycle and into the next expansion phase to see any real appreciation. PLTG has real wells generating real revenues right now. When I first got together with the CEO of Spicy Pickle- Marc Geman- it was the spring of ‘06 and there were 12 stores operating. Today, there are 43, and the number will continue to grow. That’s real. NIHK continues to demonstrate nice top line growth. However, the reality is the US economy is in a recession, and it might take some time before these kinds of stocks start to trade well again. I personally own about 1.4 million shares of SPKL, and I have decided to simply hold my nose and wait it out. If I have to hold it another two years to make any money, I will. I did recommend a sell on the stock as it approached $2, and at that level I sold a bunch myself. I believe the markets are setting up for better performance starting in the next month or so, and I’m planning an edition describing the factors lining up to get the market going in the right direction. The Bear Market wasn’t in the plans, but it happens once a decade, and you just have to wait it out. That’s what’s really hurting the price on the screen right now, but that will eventually change.
Comment by James Ardito — 8/30/2008 @ 6:27 am