Commerce Planet is behaving like the Planet Krypton- simply imploding- price wise. The stock is trading as if something has gone wrong at the company.
You can blame a certain amount on the current buyers strike thanks to the over all market conditions, but there comes a point where you have to start questioning the company’s future.
Is the market a Jar-El (Superman’s Dad on Krypton; is that the right spelling?)- warning everyone an astroid is going to destroy the planet, and no one believes?
I can’t say and don’t know for sure that something hasn’t become derailed after three quarters of outstanding performance and profitability. There have been doubters in this stock before, and so far they have been proven wrong.
It would be helpful if the company were to put out some guidance relating to subscriber numbers or some other metric to soothe the market’s fears. Right now, I believe the stock is going down because it is going down, and people are selling it because it is going down. I don’t have any indication the company’s business is floundering.
Some have pointed to the lower traffic rankings on Alexa. As I understand it, Alexa traffic is only ranked by the few who have an Alexa toolbar installed on their browser- I believe it is a very small percentage.
My SSL at $2.25 turned out to be a technically good call. However, suggesting a buy back in the $2 range about 10 days later has since turned out to be a bad call. It’s not the first time, and it certainly won’t be the last. I picked up 15,000 shares at about $2.23 for my personal account, and I’m still holding 12,500 of them, in addition to the roughly 200k in the corporate account. I’ve been holding those for over 3 years, and haven’t sold any in the last couple of weeks.
If the company’s business is floundering a bit, it is not going to disintegrate overnight. I believe we are due for a bounce, and it should be in conjunction with Q3 numbers.
I wasn’t terribly surprised to see the stock down at $1.90- after all, that is the price the fund manager paid for the huge block he bought recently. However, the move below $1.90 has taken me aback just a little.
Thinking back over the history of this idea, volatility has always been part of the story. Remember the Q3 numbers release? The numbers were great, the stock was trading at $1.80 the day before, and within three trading days it hit $1. Three and a half months later it was printing at $3.25- more than a triple off the low.
In my view this is simply a very sloppy stock right now. Some numbers should tighten things up, and a rebound is inevitable- it’s simply a case of when and at what level.
So, is the stock a buy right now? Is it a sell? Is the market telling us the company has turned south. As always, I will just look at the chart.
The 61.8% retracement still applies- we just have to look at it over a longer term. So, let’s go back to the level from which this company made its meteoric run starting last August at $.50. Here’s the chart:
The 61.8% retracement of the entire move takes us to $1.65. At the rate the stock is dropping, it could get to $1.65 tomorrow or Monday.
I believe this would be the ideal level to buy this stock. I can’t say for certain it will get this low, but if it does, that would be a very low risk entry point in a highly volatile stock.
If it ends up there and you jump in, your SSL will become about $1.48.
The longer term the chart, the better predictor of the possibilities.
Comments and questions are welcome.
Has management become so inept and insensitive to the shareholders that have backed this company through thick and thin . I believe that an indepth PR should be released to explain the massiveSEC filing to sell or possibly sell all those shares. Also why have the management neglected to give us guidance on Feb. and March subscription numbers . The last PR was a weak communication with its loyal shareholders to let us know about the health of our company. There is a few more important issues to be addressed and the Carmen Elektra Mastercard PR just seems like a deflection tactic by management and they have not gained any confidence with me as a shareholder especially after I have made two phone calls this week to the company and still have had no response ,
What do you think those guys at JLF group are thinking after their already discount rate @ $ 1.90 is looking pretty bad ?
I am a long on this stock but I am getting a little tired of management not giving us ,or the company a solid creditworthiness . A few of my good friends have been watching this stock ever since I talked about it to them , they have been reluctant to buy because of the major swings in share price and I don,t blame them .
Come on management step up too the plate and make us feel that we invested our hard earned money in the right company.
Andy
Editor: I can’t really respond with an intelligent comment, and I can’t disagree. I will send your comment directly to the CEO via email.
When do you expect the Q3 numbers to come out?
Editor: Probably around third week of April.
I wonder whether Roth and Craig-Hallum have advised CPNE to refrain from forward guidance prior to issuing Q1 results. This allows them to place stock with their clients at a favorable price. It is possible CPNE’s business has weakened dramatically. However, it is not probable. Yet the stock is trading as if revenue and profit are falling sharply. It is difficult for the retail investor to withstand such a sharp drop in price on no news. However, the risk/reward tradeoff is attractive at these levels for initiating new positions.
Editor: Very good observation- Roth placed a good deal of the stock that could have been loose, but where are they now? Either they sold the company a bill of goods, or they want to get their other big boys positioned better.
Do you ever make comments about stocks that don’t pay you?….Take a look at , VERY INTERESTING!
Editor: Why should I when I can find stocks that double and triple who do retain us? However, I do quite often, but generally not in microcaps. For example- you might have read about Apple computer over the weekend. Steve Jobs did not pay us. The BLOG is not for bringing other stocks to people’s attention.
I echo Andy’s cogent comment and appreciate it. But, I think he is too naive and wishful about the management.
He writes: “Has management become so inept and insensitive to the shareholders…..”
I think not. I far more suspect that they have bad news and don’t want to tell the shareholders. My evidence is that when things were going swimmingly, they issued many encouraging press releases. They didn’t take ‘stupid pills’ in the meanwhile. They aren’t saying anything because the news is unfavorable and enough people have figured that out and are selling out of the stock, hence its current meltdown.
My position is to WAIT until real news is out. If it is great, I’ll miss some percentage gain but if it is bad, or even just not good, or maybe neutral, I won’t be around as the stock languishes. I sold out at $2.60 and $2.20 (using the SSL of $2.25, thanks editor).
Paul
Editor: The way the stock is trading, one would have to assume the market agrees with you. There is something wrong, and the company is not talking about it. On the other hand, this stock has traded like there was something wrong in the past, and the market had it wrong. We’ll just have to see what happens.
Dear Editor, do you think we will see a surge before numbers this time, or is it likely since the stock has dropped so, that we won’t see a surge until after numbers this time?
thanks in advance,
dave
Editor: Depends on what the company is willing to do. If they don’t get any information out to soothe investors, the stock could simply keep dropping into numbers.
I am still staying put with my shares but i must admit i am really sweating these days… Seeing the stock today dip below 50% off its highs of not too long ago is discouraging. But the stock has a history of behaving badly, with large mood swings.
To me, the support point is $1.14 from October 20th 2006 when the stock inexplicably dropped significantly in a matter of days from its highs of $1.80 on Oct 9th (a drop of a third). I’ll sell all my shares if the price starts approaching this mark.
Editor: The company finally came out with a comforting news release this am. It should start improving here.
News out late that CPNE has repurchased $1,000,000 in stock. They also mentioned as an aside that they are changing the way they report Membership Growth and Quarterly Guidance. Any comments on what this might mean especially the membership growth?
Regis
Editor: They changed their policy on how they will give guidance, which is fine. It’s about time they told us, instead of just sitting around with their mouths shut watching the stock fall apart. I believe there could be something a little more insidious going on here as far as disclosure goes, and I’m thinking of publishing an article “musing” about the possibilities. I think the numbers are still going to be outstanding, but I could be wrong.
I’ve been a shareholder since the stock was at 1.60 and pulled back to 1 dollar. I kind of get the sense these investors are manic. It’s like a bunch of insecure people who need constant reassurance. Name one company who issues an update every month letting investors know everything is ok. I couldn’t imagine the stress that would put on the people who are running the company, you’d be terrified to take any risks which could result in longterm benefits if there were a shortterm blip. I’m guessing their decision to give a quarterly update rather than a month update was advised by their new institutional investors. I’d be very pleased to see the institutional investors buying more. But really, people need to think of the health of a company over a period of years not months. We know they have a solid balance sheet, they have had quarter over quarter growth for the last two years I believe. I think it’s time to buy and hold, give management a chance to perform.
Editor: Great contribution. I believe if their business is going south, it’s not falling apart in a couple of months. It will head the wrong way in small quarterly increments. The market is a fairly irrational animal, over reacting emotionally to both the upside and the downside. However, over the long term, stocks generally go where they belong. This stock seems to have a particularly volatile shareholder base. I believe that happens when a lot of people buy a stock because it is going up. Those are the same people who sell because it is going down.
Hope everyone caught the news release after the close yesterday.
Co. has bought back anther million $ of stock.
Check the news release
george
Editor: About f’ing time them put some news out.
I am willing to be a patient investor and give management a chance to do what is best for long term profitable growth if only there is a good way to measure managment’s integrity and concern for shareholders based on what they tell us at appropriate times
Editor: I guess it’s a judgement call. You have to admit one thing- sales and profits have gone up every quarter for the past four quarters- that information is in the books. I understand why people think things could have taken a turn for the worst, but if they haven’t it’s a hell of a good value down here.
Smart move from management with todays updated press release on the stock repurchase of some 1M shares. This move despite a huge fall should bring back shareholder confidence and I suspect another round of a buy back as well. With Q1 out in May and another buy back this should do well. The has come and gone!
Scott
Editor: At least the company has done something to restore investor confidence. Here’s what people should focus on: Most investors will focus on the fact that the buy back will reduce the supply and get the stock moving in the right direction. I like the fact that they have $2 million they believe they can vaporize to retire shares. Makes you wonder how much cash they have right now?
They mentioned in the press release that the share buyback is coming from available working capital, which by my calculations is around $6 million. I’m wondering what they are doing with the other $4 million.
According to their 10K, the company bought back over $300k worth of shares between November 2006 and December 31, 2006. So that means they bought around $600k – $700k in the first quarter
Like everyone else here, I am really glad they came out with a PR yesterday to help out its stock. Key phrase I picked up on is that “Commerceplanet has continued to grow….” At the Roth Conference, I remember the speaker mentioning that membership revenue accounted for a large portion of their revenues. However, the company’s goal was to decrease the proportionate share of their membership revenue by growing the other segments of their business. The speaker was quick to point out that they want membership numbers to continue to go up, but they want their other business segments to grow even faster. I really hope that is what the company is alluding to (their success thereof) in this press release.
Editor: At least we have a clue as to what could be going on. I believe the company deserves the benefit of the doubt thanks to their performance for 4 continues quarters.
Couple questions – isn’t it troubling that the stock has dropped so much, -despite- $1M in recent stock purchases by the company (imagine if they hadn’t been buying!). And doesn’t the company’s movement away from subscription metrics cast doubt on the sustainability of onlinesupplier.com… and that’s about 80% of the revenue, isn’t it? Guess I’m seeing this PR as a negative. I’m looking for them to describe future business model and revenue sources.
Editor: That’s what makes a market- some interpret information negatively, others positively. In my view, people simply wanted to know their business wasn’t falling apart like their stock was. Clearly, the news provides evidence it is not. If it were, they wouldn’t be spending valuable cash to buy back their shares. As far as evolving the business model- they are simply trying to leverage their systems to outside users and the massive number of subscribers. I believe it’s a good direction to go. Q1 numbers will be another record in my view.
CPNE has just bounced off the 200 day support line. It’s been trading above this level since June of 06. Probably about time a correction has occured. I see resistance at 2.5 but hey, wadduh I know.
Editor: As much as I do. I like the fact that the stock pulled back almost exactly to the 61.8% retracement of last year’s whole move, and then bounced. This one should get better over the next few months. We’ll see. I’d like to see it back to $2.50.
What do you make of the fractional volume we saw today in relation to the selloff volume and the volume on PR day? You mentioned that you believed the new guidance disclosure could be “insidious”. I am quite curious as to why you said that.
Editor: Planning to write a piece this weekend- musing about the possibilities concerning their new disclosure policies and what has changed about the way the company conducts itself over the past several months. It’s a bit of a conspiracy theory.
What is Commerce Planet’s next quarterly earnings release date?
Editor: If history repeats itself, it should be in the last week of April, but they have until May 15.
do you see a aquisition or merger coming into play this year. Bigger than the previous aquisitions?
Editor: To date, the only acquisition they have done is of a printing company. They were giving the printer so much business it made sense to buy it. It wouldn’t surprise to see something happen- more likely they would buy something.
Great rebound today from its previous bottom dwelling. Are we seeing the classic buy on the pre release then sell post release? 2.50 would be nice to see again. Wonder if we will get there.
Editor: Depends on the numbers. Will be publishing some thoughts tonight.
I was wondering if you guys use the CPNE turnkey website for the OTC Journal website? If so, does all of the features come with the package, like the e-mail newsletter services, the blogging, and so forth? Because your site is really nice!
Editor: No- I need to robust of a solution for their technology- there are about 1.5 million records in our database. However, I understand the Planet’s works very well.