Inphonic Not Getting Supersonic

I probably spend too much time pilfering the SEC Form 13Fs. I don't have a huge research staff and budget (read: myself), so I like to let the top hedge funds do some of the initial legwork for me. (James Altucher's Stockpickr.com is a very user friendly site that lets you sift through some of the best funds out there.) I have blogged in the past about forming a best ideas value hedge FOF, and here is an example of a stock that a number of top funds have been building positions in.

Inphonic (INPC) is an online seller of wireless services, and trading at a recent $2.75, has seen its stock cut by 75% for a market cap of only $100M. It seems to have been slowly building a base near these 52-week lows. The fundamentals have been terrible, and this has to be a turnaround investment theme at this point. The founder got booted as CEO today, and the current president takes over the reigns. Some big guns think that it is a good buy, including (% of company owned):

Galleon 7.68%
Vardon 7.66%
Trafalet 7.25%
Tiger Global 4.7%
Potomac Capital 4.62%

These five hedge funds alone own 32% of the company. Regardless, I can't help singing this old 80's hip hop song when taking a look at this stock Inphonic (INPC).



Supersonic is a word when people start to listen
Especially bigger people, they pay close attention
You might not believe it, you might not even buy it
But when it comes to our lady (Beat Box), you might even try it

Supersonic
Supersonic


I introduced my own lyrics below:

Inphonic is at $3 and people start to listen
Especially bigger funds, they pay close attention
You might not believe it, you might not even buy it
But when it comes to the stock, you should just try it

Inphonic
Inphonic

Chart courtesy Bigcharts.com.
Disclosure: Don't own any but might buy some.

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Comments

[Fred]

I was suprised to see that Inphonic even had a stock symbol. When I saw it was one of today's top losers, I decided to check it out. I have experience working with the company and was always impressed with their web sites private branded for their various partners. However, looking over their financials, I was aghast at what I saw! Now I know where those big bonusses paid to agents and affiliates come from -- their bottom line. This company operates in two of the hottest market segments going, wireless and internet yet their results are terrible and they are losing money at an alarming rate. I know that Inphonic depends heavily on internet marketers and affiliate programs. Google could be to blame for their outright war on these programs. A quick search for cell phone terms confirms this view. Inphonic or its partners are nowhere to be found except in ads or sponsored results. Today's slide may be just the beginning. Better jump while there's still a ship.

[Do YourHomework!]

Mebane:

Do your homework and stop reccomending things you know nothing about to unsuspecting people - this is not a viable busines model this POS is headed into the toliet.

[Russell]

I do not dispute what you (Homework) and Fred say, but I wonder about these funds which own the stock. The funds are for the most part well known. Do these fund managers believe the stock is a good turnaround situation? I own some of this company stock, after dumping 75% of my position a couple of months ago...wondering whether to hold-on, accumulate or sell.