The OTC Market Newsletters Are Flowing Again
Well as history starts to repeat itself most should be getting numerous OTC newsletters and profiles. Most of the online news letters are disclosing there compensation though.
But to me it seems that a prelude to a newsletter the following items have been or are happening.
1. Equity financing or funding and the basic financial terms are not being disclosed. Why are the terms not in the news release and the newsletters? Is it because they are death spiral or floorless convertible debentures?
2. Numerous S8 to consultants, which are free trading. Why so many consultants? Why are they using stock for revenue generating acquisitions or something of value? Is the stock the value after sold into the market?
3. SB-2 filings registering additional stock to be distributed.
4. No revenues and no cash is a must or if they have some a mega loss but are undervalued in the write ups.
Recently, the newsletters are starting to come again just like before. I guess it is a wait and see if people make the same mistake in the same old game even after so many got burnt in the past from these pretty story scenarios.
In this market, fundamentals are the key. So the EPS (earnigs Per Share) tells investors how much profit is being made for each share in the company. There are many examples of companies with astounding growth in sales but a widening loss in earnings. Revenue that grow of 20% - 50% plus annually is very good, but if EPS has gone down then the increase in revenue is more or less not worth a hoot. Also if the revenues have increased and so has the dilution that will also affect the EPS. More shares and thought the loss EPS may go down the Outstanding has risen but the net loss has increased.
Before you buy into a news letter with a pretty well written story:
1. Reading news releases as far back as you can get them, at least 6 months.
2. Read or at least scen the filings on Free Edgar or Edgar
3. Check for insider trading (144)
Does not take but a few minutes to do a quick DD and remember the 3 day rule. A momentum newsletter will run the first day, hard touting the second and the 3rd day is selling. Most recently the days have reduced to 2 days as people try to get in on the first get out on the second.
But the market is picking up and the OTC newsletters are coming. They are picking up steam everyday now.
Just be careful and just a few moments of DD is always wise. Keeps you from watching the fall while holding the bag.
Gary Swancey
:=) Gary Swancey
