I have been following this for a while and was able to get in the week before the announcement of the contract with PAX. I wanted to share my personal thoughts on the position.
I realize that penny stocks don't act in the same manner as stocks on the big boards but I don't think that this will be a penny stock forever. Based on the anticipated revenue for the next 12 months, $22 million for the reality show and $2 million for memberships, with a 50% profit margin earning, which is conservative, we are floating around $12 million. Factor in a P/E of 10, which is a fair estimate, this would place the market cap at $150 million or $.21 per share.
Bottom Line: This stock has a long way to go but the market does not realize it. As more annoucements are made, we can expect to see an upward trend and once the show hits the air in about 6 months, depending on success, it would expect to see it jump to between .12 and .18 with the remaining movement upward being later in 2006 during the second season.
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