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The HSX Report -- 5/25/07
Today, penny stocks! But first... the IPOs.
The Girl from IPOnima
(1) South of the Border (SOTBR) -- H$20
(2) Hurricane Mary (HMARY) -- H$15
And this week's Saturday IPO...
(3) Justice League (JLEAG) -- H$50
And a rare Sunday IPO....
(4) Power and Glory (PWRGL) -- H$20
On to today's feature....
The Wonderful (Speculative) World of Penny Stocks
So you're new to HSX, and you don't have a lot of money, but you want to make a lot of money. Except you can't afford to buy massive quantities of H$200 blockbusters. What's a person to do? Well, there are opportunities for mind-blowing gains out there, if you know where to look and if you're willing to spend some time with it. It's the land of "penny" stocks. I'm going to define a "penny stock" as a stock that trades for H$5 or less, but bargains are available even up to the H$15 range, and there are plenty of opportunities for under H$1. The only rule here is this: only go for penny stocks that are in the concept or development phase. You can take a flyer on production-phase pennies, but bear in mind that they could be that cheap because they're destined to head straight to video or cable. If it's a wrap or release phase penny stock, it's definitely that cheap for a reason. So your job, as the penny stock investor, is to comb the "C" and "D" phase stocks for value. How can you spot value? Well, if you read the description for the film and say, "You know, I think that's a film that people would want to see if it ever gets made", you could have value on your hand. As an illustration, let me tell you a little story.
Once upon a time there was a boy named Speed Racer. He had a cheaply-produced and crudely-drawn anime show in the 1970s that, all in all, wasn't that bad. One day, some buzz began in Hollywood that Speed's story was going to be brought to the big screen in a live action feature. A MovieStock (SPDRC) was duly issued, at H$10, as a concept stock. The buzz quieted down, and the stock's sunk into penny range. You could have had it for under H$2. Then, a pair of brothers named Laurence and Andrew, who liked the cartoon, thought that they might want to make this movie. So they signed on to produce and direct it. Oh, did I mention that Laurence and Andrew have done a couple of other films together? Like, for example, The Matrix?
When the Wachowskis picked up the project, Speed Racer's share price rocketed up faster than Racer X around a banked turn. SPDRC currently trades at H$79 or so; by the time of its release next summer, it will probably be double that. Had you played the penny game, you could have had it at H$2!!!! Your H$100,000 investment to max out your holdings could have netted you a profit of H$3.8M now, and possibly something like H$6.9M by next year. THAT is how you make big money in HSX. (As an aside, I think that SPDRC is a buy at H$79... this one's going to be big, I think.)
So what are some examples of potentially huge stocks that are currently languishing in the penny range? First, a bit of illustrative history. Once upon a time, the Powers That Be at HSX were extremely liberal in dishing out concept stocks for projects that didn't even rise to the level of "rumored". For example, there was a Monica Lewinski Story concept stock issued around the time of that whole mess in '98 or so -- there was no project, it was just guessed that somebody might at some point come up with a plan to film her story. Many of these concept stocks were just famous TV shows or movies that HSX thought were candidates for filmic treatment (or, in the latter case, remakes). A lot of them are still out there, too, sitting relatively unnoticed in pennyland.
Here are just a couple of blockbusters-waiting-to-happen, should someone decide to make them reality:
(1) Hawaii Five-O (HW5O) -- H$0.68
(2) Without Remorse (WOREM) -- H$6.34
(3) The Vega Brothers (VEGAB) -- H$0.37
(4) Red Rabbit (REDRB) -- H$0.86
(5) Bullitt (BULIT) -- H$0.79
That's it for now. The Report will return Monday as we wait with bated breath for Pirates' weekend BO.... Excelsior!