AAC

[DJF]

stockcharts.com/gallery?aac

[caa]

Declan,

I'm curious what your thoughts are about AAC from a fundamental perspective.

The recent proxy filing, requesting shareholders approve adding another 44mm shares to the float is likely weighing heavily on the PPS at this time.

As a chartist, do you allow a known pending significant event to influence your buy/sell decision(s).

In other words, just looking at your chart, one might conclude that AAC is a good risk/reward buy at .67. But, introduce the possibility of 40% dilution to the mix, then .67 might be considered a rich price to pay.

Your thoughts are appreciated.

[DJF]

I was disappointed with the impact on net income from their recent revenue surge. If we are to expect more of the same for the net quarter I can't see the markets reacting favorably.

I was not aware of a proxy to add 44 m shares to the float of 53 m - are there plans for acquisitions? Even so, as you say, this will have a negative impact on share price. With prices trading at $0.67 support, any 'bad news' could drop this to next the level of support in the $0.40s. The dilution caused by adding new shares would likely be the cue needed to knock the stock down. Suffice to say, I would not be pleased!

DD as always,
DJF

[caa]

Declan,

<<I was not aware of a proxy to add 44 m shares to the float of 53 m - are there plans for acquisitions?>>

Here is the filing:

knobias.10kwizard.com/filing.php?repo=tenk&ipage=2781346&doc=1&total=&back=2&g=&attach=on

I anticipate they will acquire at least one small tech company and perhaps one large competitor this year. The promise from management is that any acquisitions will be immediate contributors to the bottom line. We'll see.

They did knock at least two homeruns in recent history with the acquisition of iCollector and Rapidfusion (both have been solid winners). The recent partnering with NAALive was a direct result of the company acquiring Sonition, who had the original franchise with NAA. That development will take time to be "in the money".

So, their additions have been prudent and well thought-out. But, growth has its price. The proxy is up for shareholder approval in July.

Even with the increased share count, I suspect any announcement thereafter of an acquisition could pop the stock up dramatically, as the iTrustee announcement did back in March.

But, I anticipate pressure on the stock between now and July, mainly because of the overhang of potential extra shares.

Best.

[caa]

Declan,

AAC came out with some positive news this a.m.

secfilings.nasdaq.com/filingFrameset.asp?FileName=0001134821%2D04%2D000078%2Etxt&FilePath=%5C2004%5C06%5C09%5C&CoName=ABLEAUCTIONS+COM+INC&FormType=8%2DK&RcvdDate=6%2F9%2F2004&pdf=

The company seems to put out news releases in "batches"; i.e., a flurry of company pronouncements over a period of days. The company IR has already indicated they are going to communicate more with the street. So, now may be a good time to accumulate as the PPS is largely news-driven. JMHO.

I will be surprised if we don't see 2 or 3 more news items from the company over the next couple of weeks.

Best.

[DJF]

Thanks for the heads up. For the record - I emailed investors relation and asked them about the insider selling, and the proxy to add more shares, if the directors had faith in their own company. I didn't get a response...

Go figure,
DJF

I still own my shares - I think there is something more than a pump-and-dump to this, but I would have had more respect for the company if they had responded to my email.

[caa]

As predicted, more news this a.m.;

knobias.10kwizard.com/filing.php?repo=tenk&ipage=2839640&doc=1&total=&back=2&g=&attach=on

I will expect a couple more news items next week.

Don't worry about IR not responding to email. They don't respond to anyone via email.

However, they will talk your head off if you call them. Very good on the phone, lousey on email. That's just their channel of communication.

Stochs look good. Maybe a MACD crossover today.

Best.

[caa]

AAC starting to resurrect from the living dead.

The company gave guidance a couple months ago that there would likely be a acquisition/partnership/buyout by the end of Q3, which is coming very soon. Lots of rumors to that end on Yahoo and RB. We'll know very soon...

[DJF]

Yep - some volume starting to creep in. I am still looking (and holding) for $2 here. We'll soon find out what this volume buying is for....

DJF

[caa]

Declan,

Big move today. Do you think it has legs? How many stocks advance 50% in one day and hold their gains? Not many, I'd guess...

The company is doing warp-drive testing on the internet. Looks as though they are about to announce something significant; i.e., something fundamentally meaty, perhaps very soon. The company still has a bunch of shares on the shelf to grow with, and we've already paid the price for the dilution it caused. Management didn't exercise their options this quarter, which is certainly a plus.

This one has certainly been confounding. But then, it's never easy, is it?

Best,

caa

[caa]

Declan,

Well, there's the "fundamentally meaty" news I was hoping for! Plus, they are going to give guidance for 2005! Yeeehaw!

Could be a very nice run from here.