10 Reasons Why Jones Soda Co. (JSDA) Is Nothing More Than The Beverage Version Of A Palm, Inc. (PALM)-Type Pump & Dump
Posted by Timothy Sykes on Tue 3rd of Mar, 2009 05:46:53 PM
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Disclosure: Tracking pump & dumps is my business…as Dennis Gartman learned the hard way…I am short JSDA and wish PALM had broken through key support at $7 ( a level at which I coulda woulda shorted) before admitting to their incompetence
BackStory on PALM: After suckering institutional investors for $300 mil+, the dumb-as-Vick tech geeks and ANALysts into thinking their new smartphone would be a hit–and managing to pump their stock from true penny stock hell ($1-2/share) to a respectable $7-8, they let everyone in tonight on reality: sucker-punching everyone with quarterly revenue of $85 million, just over half of what all the gullible suckers were expecting and admitting they probly need more capital! If there was any justice on Wall St (there’s not), the stock would return to realistic prices, aka $3-4/share, but probly won’t come all the way back down due to continuing hype (hype dies hard)
BackStory on JSDA: As TIMalert subscribers were emailed/texted today, I shorted 3000 today around $1–wanted $1.10, but Interactive Brokers sucks (more on that later)–then added another 1000 shares at 99 cents because its charts below displays the beautiful breakdown pattern that made me my 2nd million dollars and has earned me 200% in the last year, keeping me #1 out of 20,000+ traders on Covestor for the past year, as I detail in my PennyStocking Part Deux instructional trading DVD package)
We’ll talk about why JSDA’s new product is similarly hyped to that of Palm in a minute, but do you see that little drop of just a few pennies/share that occurred this afternoon when JSDA was at 99 cents today? That’s the same price at which it spiked the day before, which squeezed early short sellers into the market open today (even though in a truly epic encounter with their failing company reality, JSDA failed–for a 2nd time–to break out past $1.25 today.
JSDA could very well spike a bit at the open tomorrow (not looking good with futures tanking), but it’s gonna have a tough time getting back anywhere close to $1.25 because the sellers are there and they are fierce. Those of you who know the chart patterns I like know this one fits perfectly, first down day into a 100%+ spike caused by hype/manipulation…just need a little patience for the short-term catalysts’ influence to dissipate and presto chango, easy 10-20-30% returns by shorting into crappy companies when they mistakenly/momentarily spike.
You see JSDA’s latest runup is due to all the hype surrounding their recent PR about their new GABA drinks, which are supposed to help promote mental concentration, which apparently is big in Japan (sales of $122 million doesn’t seem that big, especially with razor thin beverage margins, especially when the economy is rolling over and people are cutting out unnecessary expenditures every single day).
The problem is GABA is nothing new for this failure of a company (yes, my opinion, based on its longterm ugggggly chart…it was announced back in mid-2007 and the stock did NOTHING.
Even more worrisome is that that PR quoted GABA sales from 2006–WTF??!?! Were there no more recent sales to come by? Old hype goes rotten after a few months, let alone 2.5 years.
And of course there’s JSDA’s ugly ugly financials, plunging sales of 25%+, getting discontinued from Wal-Mart, widening quarterly losses of $5 million/quarter and only enough cash for 2-3 more quarters…even The Fool, not known for being useful–as evidenced by their “premium” newsletter “outperformance” (you pathetic marketing manipulators, outperforming an index by 10% and dropping 25% on the year is not bragworthy…post your picks like I do and maybe you won’t be laughed at so much)–wrote THIS article back when the economy wasn’t as sick as it is now back in November…well, let’s just say we know why the stock was at 30 cents at the beginning of 2009.
But people love a comeback so speculation has risen that their GABA drink line would save them. The Seattle area press (JSDA’s home and home of their PR agent no doubt) loves the story, halfbrains on internet message boards love the story and there’s already pictures being posted all over the internet of waaaay too much stock at disocunted prices…after all, every article said they’d retail for $2.99 each, but the below pics shows them for an already discount price of $1.99:
In short, I don’t listen to PRs or message boards because Penny Stocks are evil, they love to hype themselves up and penny stock investors are dumb/gullible enough to believe it all. Over the years, I’ve learned only 2 things matter when analyzing what a company is worth: revenues and profits. All else is just noise and BS.
PALM was filled with noise and BS and now they’re getting what is due to them. I’m short JSDA here and think I’ll be able to make 20-30 cents/share in the next 1-2 days as the volume continues to fade and bitter shareholders from years past continue selling into this one-time spike. Go over my required course materials and learn these simple hype/manipulation patterns so you can profit from them too!
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