I left my office last Wednesday morning for a trip to Dallas. When I left, UPSN was trading relatively brisk volume at the $1.30 level and looking like it could go higher. I was in a closed door meeting all day, but had heard it had reversed course a bit.
I came home Thursday night, and saw that the stock had really begun to trade very poorly. It was then I thought I might need to sell the 10,000 shares I had purchased at $1.22 on Monday, take a small loss, and move on.
I didn’t act, and regretted it deeply today. This stock has become a total disaster, and I am still holding the shares and down about 5 grand.
Here’s the chart- and it’s absolutely pathetic:
My technical call on the stock last weekend turned out to be a disaster. As you can see, for the first couple of days the stock trended up. Then, bam- this stock got killed.
This points out the importance of stop losses in these smaller issues. They can be very volatile, and as such you have to be careful.
In last weekend’s edition wherein I suggested this stock looked pretty good technically, I also set and SSL (suggested stop loss) at $1. When the stock rolled down through $1 on Friday I was travelling and wasn’t able to exercise my own disciplined stategy. Now I am stuck down another $3,000.
Since I missed my opportunity to sell the stock at a reasonable loss, I am going to hang in there for a few more days and watch what happens. Typically, when these stocks become this oversold, there is some sort of temporary bounce. When it happens (if it does), I will sell this one and get out with my loss.
And they say travel is not so expensive these days. That was one expensive trip for me.
Comments and questions are welcome. What a mess.
I myself bought this stock last November based on the concept of the “411 directory assistance” pay-per-call model analogous to Google’s pay-per-click. I have averaged down a little bit, but I still continue to hold on to this stock. I just listened to Tony Phillips during a teleconference call today and he seems to purport that the fundamentals are still the same, and that the market is reacting for no apparent reason. Unless people are bailing out and trying to take their losses before the end of the year. Spelman Research has in fact given UPSN a speculative buy of upto $3.35. I personally am going to hold on despite the significant loss I have sustained thus far. I believe that it is a matter of time, before this takes off. By the way, thanks for providing valuable insights on potential winners. I enjoy reading your analysis and opinions.
Imtiaz( one of your devout subscribers)
Editor: Thanks for your contribution. In my view, there is nothing wrong with being long term in this idea. The company does have revenues, some cash, and a low burn rate for a new tech company. Therefore, they should be around for a while. Their sector could become hot in six months, and off you go. I would be looking to buy more when it quiets down, makes a bottom, and no one wants it at all. That will be when you will make the most money if you have patience. I am going to sell- I need the tax loss and believe this one will be technically challenged for sometime. Perhaps I will buy it back after 30 days.
I am in the same position as the above commenter. I bought earlier this year, but added to my position on the current weakness. I, too, believed that UPSN was about to break out and considered buying shares at 1.25, where it had found support. I listened to the conference call and summarized it on my blog. The CEO said twice no reason he knew for the stock to be down. I’m not sure why it would be down. Shorts leaning hard against it?
Editor: I believe there was a group of investors who bought the stock in advance of a potential big event. It didn’t happen as expected, and they just starting selling the stock with no regard to price or liquidity. I don’t believe short sellers in these kinds of issues are the plague they used to be. What a mess. I’m getting out soon.
A few thoughts…
The CEO mentioned that he doesn’t know why the stock is down? You’re the CEO of a thinly traded stock with few holders and you don’t know why the stock is down? If you don’t know why, then you should. That answer scares me and tells me something is wrong.
The run up to $1.25 followed by the quick descent does indicate that something was brewing but fell apart.
On a higher level…it looks like interesting technology…but is anyone using it? How do they intend to drive awareness and usage?
Spelman Research is “employed” by UpSNAP so of course they are going to pump the stock.
Their burn does appear to be low, but their filings still indicate about a 6 month window of liquidity.
Maybe I am missing something but I just don’t see the upside here.
Editor: When I published, the upside I saw was 100% technical. Sometimes it works, sometimes it doesn’t. I ended up selling at about $.85 and losing about $4k. I won’t look back. This one is over and done. It could get hot again someday if the market comes back to an interest in mobile content delivery. Mobile search is not happening. If I had been in front of a computer when it traded to $1, I would have sold and saved myself some money. In short, for the time being, I agree with you.
well I just got a paper in the mail about this stock. tring to sell it hard for that reason I will not be buying loos like they are hard up for money to me
sell
Editor: I sold mine about $.85- I am done with this one.
Caught wind on 1/1/08 that UpSnap has lost it’s principle source of revenue, ESPN. This means that a majority of their earnings will nose dive when they eventually decide to report correct info. Run and hide on this one.
Editor: I believe I dropped this one over two years ago.