Melissa Davis, senior editor of The Street Sweeper, poses with celebrity stock picker Jim Cramer after a recent taping of his "Mad Money" television show. Davis worked as an investigative reporter for TheStreet.com, where Cramer serves as chairman, before assuming her current role at The Street Sweeper.
Mandalay Digital Group: An Overhyped Master of Positive Spin?
by Melissa Davis, 8/26/2014 10:13:59 AM
Give Mandalay Digital Group (Nasdaq: MNDL) credit for this much, at least. While the bleeding technology firm still needs to prove itself, the company has definitely mastered the art of positive spin.
A recent penny stock that spent years constantly reinventing itself in a desperate attempt to merely survive, Mandalay may have just pulled off its most impressive transformation yet. Suddenly worth more than $200 million – before clearing its first dime – Mandalay has practically doubled in value over the course of two short weeks with the help of some tantalizing, if temporary, hype.
Just don’t expect those breathtaking gains to actually last. Consider the following:
- Institutions continue to steer well clear of the wildly speculative stock, with gullible retail investors loading up on the pricey shares instead.
- A major investor, well aware of the bullish hype reflected in the expensive shares, has chosen to dump a mountain of the stock in recent weeks.
- Mandalay has yet to provide any major details about the celebrated deal that sparked its powerful rally, allowing the hype to build -- and further bolster its handsome gains – ahead of a looming update.
- With its stock rocketing to a multi-year high, Mandalay seems very tempted to carry out another dilutive secondary offering after practically doubling its share count over the course of the past year.
- Given all of the cash that Mandalay spends to finance its bleeding operations, the company sure could use some extra money to cover its future expenses, too.
Worth barely $3 a share ahead of its latest quarterly miss, Mandalay has since rocketed to a multi-year high of $6 a share after announcing a celebrated deal with Verizon (NYSE: VZ) and delaying the release of crucial details while the ensuing hype sent its stock on a powerful tear. With Mandalay encouraging investors to hope for the best, they have responded by allowing their imaginations to literally run wild. Clearly sold on the stock and expecting it to gain even further ground, one bullish hedge fund manager recently stepped forward to ridicule the so-called “moron” who chose to slash his massive position in the company despite exciting news of the celebrated Verizon deal.
“Who the hell is selling at these prices in light of this news?” the hedge fund manager recently demanded before declaring, “Why should we care?
“Worrying about who is selling or how much more is coming for sale is extremely short-sighted when we know we have a deal in hand that completely changes everything. (So) waiting for the ‘cleanup’ trade is rather pointless, given where it should be trading when the world wakes up to what is occurring …
“The size and the scope of the VZ announcement is almost too big to fathom. But make no mistake: It is huge.”
Really? How do you know? So far, even Mandalay itself has yet to determine – or at least divulge -- the true value of that mysterious deal.
You’re probably right about one thing, however. The identity of the recent seller doesn’t really matter. Ask yourself a far more relevant question: Why did that big Mandalay shareholder chose to dump all of that stock instead of holding out for even sweeter gains or – better yet – buying some more of the highflying shares?
Let’s go back to the conference call that sparked this incredible rally in the first place and search for some possible hints. An expert at translating overblown hype, TheStreetSweeper has carefully read between the lines to uncover plenty of revealing clues.
FuelCell Energy: Will The Plug Be Pulled On This Overvalued Company?
by Sonya Colberg, Senior Investigative Reporter, 8/20/2014 10:49:48 AM
If only we lived in that magical world where we could scrape up leftovers from Sunday dinner, plop them into a device, add a dollop of fat and presto – the air conditioner churns on uninterrupted. And no messy rendering required between steps.
In that world, FuelCell Energy (FCEL) might also become profitable. Or at least its stock price would rise and fall based on FCEL itself, rather than the misconceived mirroring of Plug Power. Most of all, FCEL would not be poised to lose its biggest customer.
But this is the real world. And it’s inconceivable to TheStreetSweeper how a company with multiple issues plus an accumulated deficit exceeding $797 million could be worth anything approaching $1 billion.
“Anytime you’re a single-dollar or two-dollar stock, there’s a reason you’re a single-dollar or two-dollar stock,” said Jake Dollarhide, CEO of Longbow Asset Management. “They announced they’re cutting costs. Well cutting costs is not what you always want to hear – especially when it’s a new concept company that doesn’t have mass scale at this point.”
The stock has a lot of people spooked. During “Lighting Round” Tuesday on CNBC, analyst Jim Cramer said this about FCEL:
“Ahhh, Fuelcell! I mean, you know, these are just total rank speculation stories. I can’t go there,” Cramer said.
“I’ve got a lot of solid companies that have really good fundamentals that are inexpensive,” he added. “I’m not going FuelCell.”
Indeed, this is a company that is:
- Poised to lose its biggest customer.
- Riding high on a misconceived notion.
- Selling stock. And we wouldn’t be surprised to see more.
- Can’t seem to scale.
- Losing money faster than you can say, “Fool cells.”
- Sporting a completely unjustified market cap.
We see stubborn challenges for the Danbury, Conn.-based company that makes and sells fuel cells that generate electricity.
JAMN Finally Spills the Beans -- And It's an Ugly Mess
by Janice Shell, 6/2/2011 10:32:51 AM
To be sure, the 10-K offered investors little reason to sing. For starters, the filing reveals, this once-hot “coffee company” sells no coffee of its own at all. JAMN relies on a supplier based in frigid Canada – far away from the tropical Jamaican home of its co-founder Rohan Marley – to provide the company with an actual product to sell to its customers instead.
Back in April of 2010, JAMN inked a “supply and toll agreement” with Canterbury Coffee of British Columbia that gave it access to some brew. According to that agreement, JAMN relies on Canterbury to fulfill every role – save a minor one – normally satisfied by a firm that classifies itself as a coffee company. Canterbury purchases the coffee beans. It roasts them. And it then packages them in bags supplied by JAMN – the company’s only real product – for sale to the public.
JAMN signed this deal more than a year ago, right before Shane Whittle – a notorious Vancouver stock promoter – officially resigned as CEO of the company. But the company never mentioned that agreement, seemingly material enough to warrant at least a quiet 8-K report, in a single regulatory filing until now.
Jammin Java (JAMN): Hot Stock ... Bitter Aftertaste?
by Janice Shell, 6/2/2011 10:30:25 AM
It’s time to wake up and smell the coffee! That’s exactly what Jammin Java (OTC: JAMN.OB), a heavily promotedcoffee company, and – for very different reasons – TheStreetSweeper would like investors to do.
Since the beginning of the year, JAMN has miraculously risen from the ashes of the “Grey Market” graveyard to become one of the liveliest – and richest – stocks in the entire microcap arena. JAMN has seen its stock shoot straight toward heaven, soaring from 55 cents to peak above $6 a share on massive daily volume, with its market value nowtopping $355 million despite the company’s limited resources and operating history. (As covered in more detail below, two of the Internet tout sheets pushing JAMN the hardest effectively vanished -- disabled by their Internet servers -- on the day the stock’s trading volume exploded past 20 million shares.)
CCME: Few Signs of Life at 'Healthy' Chinese Firm
by Roddy Boyd, 3/23/2011 9:30:34 AM
Also, and this cannot be understated, hanging out on a sidewalk in Fujian–the sidewalks double as parking spots when the streets, which appeared to have been designed in the Han Dynasty, fill up–was not a viable option. There was also the matter of the world-class headache the Financial Investigator was developing from Fuzhou’s diabolical smell, an epic conflation of poor sewage treatment, air pollution and the smell of cabbage that made getting the hell off Dongjie street a matter of vital importance.
The Financial Investigator and his traveling companion for the trip, an American investor with extensive experience in China, decided to head upstairs despite our interview with the CFO having been cancelled at the last minute (with no explanation given.) We thought a quick tour of the offices and meeting a few other executives might open our eyes to a few things.
Though the language barrier was a little steep with the young receptionist–when we asked for writing paper, she provided Kleenex–we were in short order shown to their conference room and told to wait. It did not escape notice that pride of place in the conference room belonged to a framed certificate of participation from the Fall 2010 Rodman & Renshaw conference, the World Cup for reverse merger companies and the pumpers and touts who peddle them.
Eventually chief operating officer James Yu came down and after spending 30 minutes trying to understand who we were, concluded that giving us a tour wouldn’t hurt. Soon enough, his colleague, Vinne Ye–the chairman’s assistant–came out and took us around.
It was most eye-opening.more...
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