If TTGL were the DOW, it would be trading at about the 7500 level, and the financial world as we know it would have come to an end. It would be 1929 all over again.
I have seen many stocks trade down to horrifically low levels in tough markets. Sometimes it’s a great buying opportunity. Sometimes it’s a precursor to a problem at the company.
I don’t know which it is in this case, and it’s too early to call. Drawing back on experience- there were some great buying opportunities in market driven pullbacks last August as micros and many large caps provided great entry levels.
Then, there’s the experience on the other side. CPNE comes to mind. That stock was $3 in 2007 when it started to free fall in February. It wasn’t until June when the company really disclosed the dramatic nature of the downturn in their business. The stock is now at $.30, but I didn’t suggest getting out until the stock was at $.70. I was late, and made the mistake of waiting for the disclosure rather than taking my cue from the market.
This bloodbath in TTGL is particularly distressing due to the robust nature of their financial results. After all, in fiscal ’07, they did deliver $9 million in positive cash flow.
Here are my thoughts for today. Q1 numbers are due out by Jan 15. That’s only a week away. No doubt, there will be a follow up conference call.
This will be the first quarter that includes results from Appalachian Oil and US Detergent, which should add quite dramatically to the top line. I don’t know about the bottom line or the cash flow.
If the fundamentals are still strong, it’s time to batten down the hatches and just hang on through these rough waters.
If there is a crack of some sort which suggests there is trouble ahead, let’s let it be someone else’s problem, get out of this idea, and move on on some sort of bounce back. There will be better ideas ahead.
I hate to walk away from a beautiful buying opportunity, but sometimes you just have to cut out the cancer and move on. In this case and in this market, I would rather give up a $.30 move to the upside rather than put good money after bad.
If you are underwater on this one, remember my published SSL was $1.73, so by definition you have decided to become a long term investor. If the numbers are good, you should be looking to add to your position and waiting out the market.
Here’s the chart, and as you can see, this stock has eclipsed all levels of support, and basically delivered a round trip to my original entry level of $.85 back in October of ’06.
The company has offered up no explanation for this butchering. It would help if we knew some fund exercised a bunch of warrants and was hammering the stock. Then, I could get behind it.
Bottom line: Hold your nose, hang on for now, and wait for the next earnings release. Perhaps we will be passing up a huge opportunity to jump on a really cheap stock, but I don’t want to put good money after bad until all the facts come out. I don’t want us to go through another CPNE type event.
Comments and questions are welcome.
I am completly mystified about this move. This could really be that a lot of people are feeling pain from the overall market, and need cash. Surley the company could move into the open market and make some purchases to stop the bleading. Bryan Chance has spoken many time about the long term shareholders. We will see.
Editor: Management has no explanation for the drubbing. I would much rather hear some fund exercised some cheap warrants and dumped. Then I would have the courage to buy.
I have been following this company for as long as you have been covering it and I was caught completely off guard by sell off. Because of market conditions and because of the low volume of shares traded I have to believe there were just no buyers. Nothing the company has done would indicate they were lying or misleading of information, although nothing is certain. The bottom line for me is I still think the stock is for real and if it firms up I will be a buyer.
Editor: I don’t know what to tell you about this downdraft, other than to observe the company is abysmal at getting the word out on their story. They simply need more shareholders.
The more I’ve been around OTC Journal, the more I am convinced that everyone should pay attention to the SSL levels. It isn’t just CPNE that has taken a hammering far below the SSL.
The other question I have is: In your experience, should OTC Journal followers take profits when they are offered, such as CPNE, SPKL, TTGL (earlier), etc. Because I have not yet seen a single low single digit or penny stock break out into a double digit stock, much less a huge winner in triple digits (think ISRG). Has there been one? It’s my opinion that taking the OTC Journal recos means paying very close attention and a wilingness to get out with a double or triple when it has occurred rather than wait for more. So far, that is a winning strategy and the buy and hold is a losing strategy.
Comments, please.
BD
Editor: In my experience, there are a couple of challenges to super long term gains. Here’s the biggest- when companies really grow and turn up on Wall street’s radar screen, they tend to be bought out rather than ever get to their full potential as stand alone companies. This happened to us a few years ago with MedGroup. The biggest win in the last few years has been in our sister publication- Force Protection- about $2.5 to $27 over about 2 1/2 years. That one is even now back in the $4 range. As you so rightly point out, sometimes it is best to take you money off the table at the point of maximum excitement. I would suggest a strategy where you take most of your money off the table on streaks, and keep a few shares just in case.
I finally heard back from the company this am.
They have no idea or reason for the drop in price. I wanted to confirm the earnings release date, but forgot. You mentioned 1-15. Is that confirmed or are you just guessing based on the last quarterly report.
Thanks again.
Editor: The company hasn’t made a formal announcement, but 1/15 is about the regulatory deadline for the filing.
The last time the stock price was this low management jumped in and announced stock repurchase program. The stock took off to above $2. I beleive the time has come again to repeat the program. The stock is being battered on very low volumes it should not take long to turn it around.
Editor: I hope you are right, as this turn of events makes absolutely no sense.
“the company is abysmal at getting the word out on their story. They simply need more shareholders. ”
Precisely my thoughts. Have you suggested to the company getting out there through investor presentations, etc at conferences like the Roth Capital, etc? This stock will reach its true worth or close, like you say, if they get the word out there. Please get this message across to management or Bryan Chance himself.
By the looks of things their current stock “marketing” strategy deserves an “F”.
-Jo
Editor: F minus. Less than zero. They might be good turn around specialists, but at this rate it doesn’t mean anything to investors.
Good day. Any thoughts on todays news that the co. is continuing the buyback?? I happen to be one of the buyers from last friday at $1.38 only to see it literally blow up in my face (im good at that type of timing)…added this morning but im curious of your opinion. Thanx
Editor: I only know what they publicly disclosed- that they still have the latitude to buy back their shares- that seems to be the only way they can stimulate buyers. I don’t believe $1.38 is such a bad level. However, I don’t know what they have in mind to start getting the word out on the company to the financial community. Perhaps they will focus some attention once we get Q1 numbers.
I have a suggestion about getting the word about TTGL and about your good blog out there.
SeekingAlpha.com allows you to submit articles. A lot of the private investor friends i have sometimes seek out information there. Have you ever considered posting there to promote your ideas and get your blog more out there?
Let me know what you think. Thanks.
Editor: That strikes me as a great idea. Will look at it. thanks.
is the company allowed to drive down the price of the stock so they can buy it back?
Editor: The company does not have the ability to drive down the price of the stock. However, if you want to get into conspiracy theories, large shareholders do have the ability to drive down the price- selling a small percentage of the shares would allow the company to retire shares at a cheaper price. I’m not sure that’s the case, but it is possible. The company does not have the ability to “bid” up the shares in a buyback. They can only match the highest bid under SEC regs, so buy backs have limits.
I went to Titans web page today and noticed they posted a report on Jan 11th that are planning a buy back of over 1,000,000 shares on the open market in may. Im a little curious why you didnt report that on your site but thank you for all repoting on this company thus far I believe it is going to be huge in 2008
Editor: I believe I covered the share buy back somewhere at sometime. However, while I believe share buy backs are great, fundamentals are far more important long term. This is a totally undiscovered company at this point in time, and I would like them to commit more effort towards getting “discovered”. It doesn’t happen by accident. I am anxious to the upcoming Q1 numbers, which are due out any day now.
Is TTGL the new CPNE-Scam?
Many things in TTGL remind me a bit of CPNE:
Fundamentally, there are some small earnings and a lot of hopes and hot air. The website does not explain the products and their advantages really well. Management is rather quiet (the companies website contains no financial reports after Q1 2007), except a dubious “buy back program” (I remember that at the time CPNE also announced one…). I don’t really believe in that buyback program.
You might remember my earlier comments on CPNE, when I asked if you understand their products and if you think there are really good ones? I am asking the same question again for TTGL.
My experience in over 15 years in the market is that the charts tells us often more than the fundamentals, and the chart starts looking like CPNE. The stock doubled from $1, than reached its peak at about $2.25 at 4-times normal volume and goes down all way now. I think some insiders dumped the stocks above $2 and still do so in small quantities.
My experience is that a fundamentally healthy stock is very difficult to push down by “bad shorties” etc. Maybe for a short time, to offer somebody a cheap entry point. But normally than the management comes up and puts the good data on the table and the stock goes up again. If a stock goes down over weeks and month and the management is rather quiet, the thing stinks.
I liked your comments on SPKL. You go there, you like the place and the food, so it might be a good stock. Has ever anyone out there tried a TTGL or CPNE product?
Editor: Point taken. One big difference in my mind. If you go back and look at nearly all my coverage of CPNE, you will note I constantly reminded investors that their “service” did not have much of a value proposition- They were a marketing company simply selling the dream. The various components of TTGL are real companies- $130 million in telecom sales and $400 million in annual sales in 40 year old Appalachian Oil are real numbers in real companies with real value propositions. Migrating Latino phone card customers to hand sets is real business. Again- I am looking forward to the Q1 earnings release any day now. Let’s wait to see the numbers before passing final judgement. However, I do not want to get into another CPNE- that was a disaster. The market told us the story early on, and we found out the truth later.
Can you please comment on the new PR out from TTGL? It reports revenue of $122 million, but a simple calculation $122×4 puts the annual revenue projection at around $480million — a far cry from the $750 million projection by TTGL management a few months ago?
Am i missing something?
Thanks. -Jo
Editor: Yes- the revenues from the acquisitions were not in the entire quarter. The acquisitions did not take place until near the end of September and the quarter started on Sept 1- I will have to see the final numbers and hear the story before commenting.
Has anyone ever looked at t
Editor: Been looking at if for about 15 months.
I think we all know by now ttgl is a joke
Editor: The valuation certainly is. How many $500 million rev companies do you know trading at $60 million market caps? It is a joke. We’ll see if it ever gets serious.
is it time to pull the plug on this one yet. are they giving out false info?
Editor: I wouldn’t go so far as to say they are doing anything fraudulent. However, you could be right. At best, they are guilty of having no idea how to create an audience for their stock.
I have a feeling that the company is actually going to post a loss for Q1 . This disturbs me for two reasons , reason 1 is that the 7 million dollar settlement from ATT will be included this Quarter which is a net revenue which means to me that it had no outgoing costs against it ! . Reason 2 is that the huge revenue increase of 122 million ,regardless of accounting methods , should actually point out to its average loyal investors that this company is making money and not just talking about it . Like I have said before , what is the point of 1 billion in revenues per year if it costs you 1.2 billion to do it . I still like the companies ideas and aggressive attitude but if they can,t even get their 10 q filed on time because they need time too figure out their actual costs for their aquasitions then maybe they shouldn,t have bought them !! I would like too hear your comments on these thoughts . Thanks Larry .
Editor: The stock is already priced for a huge loss. However, I still believe in cash flow as the measure of their performance. Let’s see what the cash flow numbers look like before deciding how they are doing with their acquisitions.
I guess you went south with the market
Editor: On the stock certainly- on the company- let’s see what the Q1 numbers look like.
Does this relate to TTGL? If so, it might explain the melt down.
BD
Saturday, December 15, 2007
Oblio Telecom meltdown
Obio Telecom (hello asia phone card, luzviminda phone card, asia call phone card, 24-7 phone card, TCC Select phone card, Smart phone card, TCC Picante phone card), a company that had developed one of the strongest brand names in the prepaid calling card industry, just killed their brand earlier this week when they began hacking the minutes on all of their products. Yesterday, Oblio Telecom restored the minutes on some of their products to a reasonable number of minutes, but has not brought them back to where they were before the December 11 meltdown. I have not heard anything official from Oblio Telecom, but my contacts within the industry are all telling me that Oblio Tel is going out of business. Sources say that Oblio Telecom management insists that this is simply a technical problem, and that they are working to increase the minutes. Thousands of customers will have scratched pins that they will return to stores, who will send them back to distributors… who will loose money because unless Oblio Tel decides to give refunds for scratched pins… highly unlikely unless they are forced to do so.
Distributors with private label products from Oblio Telecom are furious. In some cases distributors have invested 5 years or more building a brand name, and Oblio Telecom killed their brands within a 24 hour period by cutting minutes to 4 or 7 minutes on a $5 card. Please let me know if you have been affected by this situation, or if you have any insights into why a public company would kill their own brand.
Editor: This would certainly explain the meltdown in the stock over that short period during the December. The second big drop was during January, and I still have no explanation for that one. I have forwarded this on to two individuals at the company, and haven’t gotten any feedback yet as to whether or not this is true. All we know for sure at this time- the company will deliver $122 million in revs in Q1-Q1 ended Dec 1, so this would be after the fact. This information is one of the main reasons we have the BLOG- I need help digging this up from readers. Thanks.
The company was in the phone card business and all their products are not working now. So much liability of up to 15 million dollars of bad products now in the market. This Company is nothing but a scam. Bryan chance and board rest of the board.
Editor: Not a very fact based comment. Pretty crude, in fact. Perhaps you will end up being right. Nevertheless, your contribution is welcome.
Oblio is a tittan company (ttlg) one of the distributors from California and based in Hawaii has a law suit against Titan. Case number 1:2008cv00004 in Hawaii District Court, county: honolulu. This distributor is of of their major distributors and is getting burned with lots of returns of bad phone cards from the market.
Editor: I have been hearing more and more about some problem at Oblio Telecom- apparently, that’s the reason for the swoon in the stock. The company needs to deal with this in a very public way.
I am getting so much conflicting information I don’t know what to think anymore. Should I sell, should I hold? The company said they will finish the earnings by the allotted extention. Is that a set time period or is every company different? When will we know about their cash flow and whether they lost money for the quarter. I don’t want to lose my shirt on this one.
Editor: As I have stated, I am choosing to wait for the Q1 earnings report to share some thoughts on this matter. Apparently, there have been some problems in the Oblio Telecom division, which is now a smaller percentage of their business. I believe the extension ends by the first of the month.
after the last two blog I think you should be telling everyonr to pull the plug on this one. If you look back a the blog I was saying this company was a joke but you kept on saying look how much its has gone up it was done with somke and mirror and you pushing it to the people who read this. there was never any volume its time to come clean stop taking there money and say it like it is a lot of people lost a lot of money on this one and cpne two bs company that were throwing money at you
Editor: Thanks for the contribution. I own some options in TTGL at $1 and $1.50- big whoop at this point. We’ll see how it resolves. I would remind you many people made a fortune in CPNE before it reversed course. If TTGL’s next numbers don’t look good, I will suggest it is time to move on. However, you simply can’t ignore $122 million in revs for the quarter.
I think your are right on about the 122 mil in revs. That says a lot about this company. Also, how could someone like greystone credit finance all these aquisitions if this company was not for real.
One other thought. I bet there has never been a public company that has not had a lawsuit filed against it.
Andrew
Editor: I don’t take the legal stuff too seriously. Any company doing over $400 million in annual revs is going to have some legal action somewhere. Right now, I just want to see the numbers. The stock price is still a major concern for me.
Most of the 122 million revenues came from oblio. after December 11th, oblios sales are close to nothing since the phone cards are all shut down. Keep in mind that the reason for these phone cards to be shut down is that the bills were not paid to the service providers. I wonder how much money they owe!
Editor: How would you know that? I can’t wait to hear the story, but I don’t have any facts yet.
this makes no sense its up today on no volume and all the bad news . why is there no explanation from the company?
Editor: They tell me they are going to be giving complete updates on all of their operations along with the Q1 earnings release.
What’s the reason for the huge drop today? Good time to enter or keep on staying back?
Editor: I’m still not prepared to make any kind of judgement on that issue. I believe it is a hold for now. I am waiting for more facts to come out. I may write an overview in the weekend edition and suggest some possibilities.