Monthly Archives: June 2010

TimelessWealth.net: Thursday’s Pick Three Markets.

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Wednesday’s ‘breakfast digest’ returned favorable results with our OTC market pick, O2 Secure Wireless Inc. (OTC: OTOW), jumping as much as 450%, shares of Broadwind Energy, Inc. (NASDAQ: BWEN) spiking 22.5%, and Cyclacel Pharmaceuticals, Inc. (NASDAQ: CYCC) retracing a modest 1.2% on the session.

Once more, we’ve chosen three stocks for Thursday’s trading session with the help of our unique technical scans.

Forming a bullish harami chart pattern ending Wednesday’s session, shares of Valence Technology Inc. (NASDAQ: VLNC) may be positioned for upside movement. Volume on Wednesday was roughly twice that of the 3-month average.

Shares of Cano Petroleum, Inc. (AMEX: CFW) fell 33% as the company revealed plans to post-pone an anticipated merger agreement. Towards the latter half of Wednesday’s trading session, traders helped the price per share to a higher close, signaling the possibility of a ‘bounce’ and short-term gains.
 
Is the glass half-empty or half-full? Stationed at a triple-bottom supporting level, Encounter Technologies, Inc. (OTC: ENTI) will either dilute the value of their shares and tumble towards lower marks, or revel in a turnaround move to the upside.
 
 
Wish you the best of luck in your trading endeavors.

SEC Charges Two Canadians With Fraudulently Touting Penny Stocks on a Website, Facebook and Twitter.

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The Securities & Exchange Commission (SEC) charged scam penny stock promoters Penny Stock Chaser or PennyStockChaser.com with violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder, on Tuesday June 29th, 2010. The SEC reported that the couple operating through Penny Stock Chaser profited in excess of $2.4 Million from their scalping scheme.

The SEC reports in a recent press release:

SEC Charges Two Canadians With Fraudulently Touting Penny Stocks on a Website, Facebook and Twitter.

FOR IMMEDIATE RELEASE
2010-114

Washington, D.C., June 29, 2010 — The Securities and Exchange Commission announced today that it has obtained an emergency asset freeze against a Canadian couple who fraudulently touted penny stocks through their website, Facebook and Twitter. The SEC also charged two companies the couple control and obtained an asset freeze against them.

According to the SEC’s complaint, the defendants profited by selling penny stocks at or around the same time that they were touting them on www.pennystockchaser.com. The website invites investors to sign up for daily stock alerts through email, text messages, Facebook and Twitter.

The SEC alleges that since at least April 2009, Carol McKeown and Daniel F. Ryan, a couple residing in Montreal, Canada, have touted U.S. microcap companies. According to the SEC’s complaint, McKeown and Ryan received millions of shares of touted companies through their two corporations, defendants Downshire Capital Inc., and Meadow Vista Financial Corp., as compensation for their touting. McKeown and Ryan sold the shares on the open market while PennyStockChaser simultaneously predicted massive price increases for the issuers, a practice known as “scalping.”

“As alleged in our complaint, McKeown and Ryan used all the modern methods to communicate with investors including the PennyStockChaser website, e-mail, text messages, Facebook, and Twitter yet failed to adequately communicate that their rosy predictions for touted stocks were accompanied by their sales of those very same stocks.” said Eric I. Bustillo, Director of the SEC’s Miami Regional Office.

The SEC’s complaint, filed in the U.S. District Court for the Southern District of Florida, also alleges McKeown, Ryan and one of their corporations failed to disclose the full amount of the compensation they received for touting stocks on PennyStockChaser. The SEC alleges that McKeown, Ryan and their corporations have realized at least $2.4 million in sales proceeds from their scalping scheme.

The SEC’s complaint charges McKeown, Ryan, Downshire Capital Inc. and Meadow Vista Financial Corp. with violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. The SEC’s complaint also charges McKeown, Ryan and Meadow Vista Financial Corp. with violating Section 17(b) of the Securities Act of 1933. In addition to the emergency relief already granted by the U.S. District Court the Commission also seeks a preliminary injunction and permanent injunction, along with disgorgement of ill-gotten gains plus prejudgment interest and the imposition of a financial penalty, penny stock bars against the individuals and the repatriation of assets to the United States.

In the course of its investigation, the SEC worked with the Quebec Autorité des marchés financiers (AMF), which was also investigating this matter. As a result of both ongoing investigations, the AMF obtained an emergency order freezing assets and a cease trade order against McKeown, Ryan, Downshire Capital Inc. and Meadow Vista Financial Corp. The SEC appreciates the collaboration with the AMF.

The SEC’s case was investigated by Michael L. Riedlinger, Timothy J. Galdencio and Eric R. Busto of the Miami Regional Office. The SEC’s litigation effort will be led by Christine Nestor, Amie R. Berlin and Robert K. Levenson. The SEC’s investigation is continuing.

# # #

For more information regarding this enforcement action, contact:

Eric I. Bustillo
Regional Director, SEC’s Miami Regional Office
(305) 982-6300

Glenn S. Gordon
Associate Regional Director, SEC’s Miami Regional Office
(305) 982-6300

http://www.sec.gov/news/press/2010/2010-114.htm

Mid-Day Update To Wednesday’s Breakfast Digest

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All three of our ‘breakfast digest’ picks advanced in early morning trading.
Cyclacel Pharmaceuticals, Inc. (NASDAQ: CYCC) forfeited its gains as the heavy volume did not carry over into Wednesday’s session and support a rally in price.
 
Towards the afternoon, shares of Broadwind Energy, Inc. (NASDAQ: BWEN) traded up as much as 22.5% on continued strength in buying volume. As indicated in our ‘breakfast digest’ newsletter, the recent volume activity points to the likelihood of a trend reversal and short-term gains in momentum trading.
Last, but certainly not least, shares of O2 Secure Wireless Inc. (OTC: OTOW) jumped a modest 200% on stellar trading volume. The stock still holds a 175% gain as traders continue to speculate in the market.

 

This newsletter was created by traders for traders. If you’ve found our service valuable, telling a friend about TimelessWealth.net

US Wireless Online (UWRL) Due Diligence

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In this piece I will analyze three essential components and share my thoughts with you as to why they are crucial in this context and to US Wireless Online (UWRL) investors.

Recent News Release

U.S. Wireless Online, Inc. (UWRL) Comments on Recent Stock Price Volatility (Source: http://yhoo.it/9rbRlT)

HENDERSON, NV, June 3 – U.S. Wireless Online, Inc. (UWRL.PK) today commented on its recent stock price activity in the Pink Sheets market. “We have noted the trading in our stock in the last few weeks,” said Michael York, UWRL President “We feel that the activity is out of line with the Company’s potential are therefore going to investigate the trading activity in the Pink Sheets.”

Bold Statement. Management is aware that a declining share price will not fetch well with investors, or attract traders, for that matter. The intonation implies that UWRL principals will work to resolve the issue. Resolving the issue equates to boosting the share price which equates to the return on investment (ROI) traders & investors seek.

UWRL also asks that shareholders or other having any information that might be relevant to send it to the Company through its investor relations firm at www.minamargroup.net/helpdesk. On Tuesday, June 1, UWRL introduced a potential merger with Canadian company Welcome Place (http://www.welcomeplace.ca/ ). Welcome Place provides customers with software and training to teach individuals how to become successful day traders in the futures market. Negotiations are currently underway between US Wireless Online Inc. and Welcome Place, and due diligence on the company is being conducted. UWRL is optimistic about future success of Welcome Place.

“We also wish to emphasize that our development is proceeding as planned and that we intend that there will be no dilution in the equity of the Company. We are also meeting on Monday with our advisors to address this unwarranted and substantial share price decline.

This statement implies that not only is management aware of the share price situation, but that they also intend on helping the situation or resolving it as soon as possible, which is in the best interest of shareholders.

The company confirms that it is not engaged in any sort of dilution and encourages its shareholders to report any unusual trading activity or cross trading or anything irregular to the US regulators. UWRL is monitoring the situation.” A source close to UWRL noted.

The company reminds its shareholders and followers that UWRL was a company in duress obtained through a Nevada court custodianship. UWRL’ “in peril” days are long gone and well behind it. UWRL is a great robust and up and coming company. We remind our followers that Go Green Electronic Recycling; USA based company (current subsidiary) and the Canada based Welcome Place (targeted merger candidate) will be the two secondary operating subsidiaries. They show great future appreciation and potential. The “Main” China based subsidiary remains still to be announced. The mandate for our M&A consultants are to locate an operating company with revenues in the 5 to 10 million dollar range with assets of the same.

Punchline. The ‘good’ stuff. Notice the company understands that in order to market to investors it must give the market what it wants. This news release did just that. Let’s recap: (1)the company reassured shareholders that they are aware of the situation, (2)stated that management will take action to resolve the issue and increase share price to accurately (subjective) reflect the value of US Wireless Online,(3)gathered the interest of new and prospective investors by hinting on significant shareholder value with an up and coming merger, one which has yet to be announced.

Several such candidates have been identified with UWRL agent still in China reviewing and conducting due diligence on the targeted merger companies. In view of the recent price fluctuations this main China merger may be announced any time by the UWRL management to assist the oversold traders cover their positions.

And the company ends off by saying, “don’t turn your back on US Wireless Online, because once the gears are in motion, you’ll regret having done so in the first place”.

Technical Aspect

Technical investigations into the trading patterns of OTC-listed stocks are often arbitrary. The purpose of technical analysis in this context is to grasp the ‘big picture’. The key supporting level appears to be $0.0015; pivotal resistance lies at $0.003.

Most importantly, how would you describe the price/volume relationship in this market? Does volume favor movement to the upside, to the downside, or is volume at a standstill? Following Thursday’s session (June 3rd, 2010), US wireless jumped 33% on the largest one-day volume in its history.

This, itself, suggests that interest towards US wireless Online has increased significantly, amongst investing & trading communities.

Valuation

How much is US Wireless Online worth? If we know how much this company is valued at, we can propose a realistic valuation and translate that to a fair market valuation (pps). At this point our knowledge of this holding company’s assets is limited. However, Us Wireless Online stated in their release that “The mandate for our M&A consultants are to locate an operating company with revenues in the 5 to 10 million dollar range with assets of the same“.

The company previously announced the acquisition of “Go Green Electronic Recycling”, and are in negotiations to acquire “Welcome Place”.

Assume, collectively, these three acquisitions (once finalized) will account for $10M in sales; $10M in shareholders’ equity. With a modest 1X sales multiple or at book value, US Wireless Online would require a capitalization of $10M.

Therefore, we derive a low-end valuation, with an assumption based on the statements that the company has issued:

$10M/2B O/S (assume there are 2B shares outstanding, otherwise the ‘authorized’ count: http://bit.ly/8ZBETL) =$0.005/share

On the high-end, implement any sales or book value multiple that you believe justifies the potential value of this holdings company. That could translate to a price per share of $0.01+

Another useful study is benchmarking. Pull up any chart on a Mina Mar counterpart, for instance, GoIP Global, Inc. (GOIG) and you will find a stock with a similar share structure to UWRL, but one that has already rallied over 6000% (in a matter on a few months). Who is anyone to say that US Wireless Online will follow in suit? While uncertainty exists in every market, we do the best we can with the information available to us, and the trends that envelop the markets. I am of the opinion that US Wireless Online is yet to see a significant upside.