Everyone wants a company with great revenue or potential, low OS, low float, popular and good trading volume, the stock price is trading at basement level, does it exists? Give me one, I want to get it too!
The OS is 280 mil shares, however, many of these shares are being held by a few venture capitals (20-30%). Remember, AMD is also a shareholder. Each of these SB2 sellers has a limit on how many shares they wanted or could sell (again it was mentioned in the SB2). When the company has no income, the only way to survive is to borrow money and then convert these debts to shares to prevent BK. Over 200 mil of these shares came from the debt conversion, I didn't see these guys are selling. These debt holders clearly are smarter than most Joes. They know what to come and how much their shares would worth when the company gets money from these microprocessor companies.
Now they only have $3.5 mil debt remaining, I bet these debt holders want to convert to shares before this stock takes off. If you're a debt holder and you know the revenue is going to roll in quickly, wouldn't you want to convert the debt to more shares while it is cheap? Wouldn't you worry about the company is going to pay off debt first when they have the income to roll in next month?
Judging by PTSC's trading volume and the price movement for the past weeks and months, the actual trading float is VERY small, maybe 20-30 mil shares. In several cases, a 5000 shares buy pushed it up 5-7%. You won't see it happens to a stock with a large trading float. Right now, I believe the trading float is even smaller, I know several individuals got a total of 2 million shares for the past week.
When GTEL was trading at 0.03, it has 1.5 billion shares (eventually GTEL went over 2 billion shares when the stock was at 0.30 and with $600 million market cap before trading AMEX as GTE, of course with $0 revenue). Everyone said GTEL was overvalued with $40 million market cap. But GTEL still went up over 1000% and became the hottest OTC BB stock for the past year. Since GTEL is gone, now the OTC BB world is looking for a new OTC star to replace GTEL, I believe PTSC has all the elements to replace GTEL to become the hottest OTC BB stock. PTSC is already profitable, and it has bigger potentials than GTEL.
OS and float are dynamic things. When the company has no revenue and the only way to survive is to borrow money, the OS can only get bigger and bigger. When the company starts to make money and has no more debt, expect the company starts to BUY back shares and the OS to be reduced soon. If the management is smart, if they makes $5-10 million (or bigger) from the INTEL deal, I would like to hear they want to retire the $3.5 million remaining debt.
Does 280 mil OS really make the stock unattractive? If the company gets $30 million net income a year from the AMD/INTEL/etc, if the stock is trading at $1, it puts the company with a P/E of only 10. Is a company with P/E of 10 overvalued? I don't think so my friend. Remember, we are looking for the earning POTENTIALS for the next couple of years. People don't buy the stock based on their current income or revenue. Assume the company gets the full earning potentials and the company gets 0.025% of the $200 billion, that's $500 MILLION a year. If the company has 400 million OS and the stock is trading at $10, and assumes the company makes $400 million net income, the P/E is only 10, do these numbers make sense? Maybe, but the fact is, we're buying a stock right now trades at only $0.14, even it goes $0.28, you get 100% gain.
At a price of $0.14, this stock IS NOT OVERVALUED, it is way undervalued!
