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Nick Abe, CFA
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I am currently a market strategist and portfolio manager for the Alpha Macro Strategies Fund. After graduating from the University of Western Ontario with a BA in economics, I successfully completed the CFA program in 2007. Through ten years of experience in the industry I have come to realize... More
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Elementary Economics
  • Intertainment Media's new competition 9 comments
    Jun 3, 2011 12:34 PM | about stocks: ITMTF

               In my previous commentary (here) I alluded to the fact that Intertainment Media’s Ortsbo Translator would not be difficult to replicate, and could be done by a qualified programmer in a couple of hours. Unfortunately, I am not a qualified programmer. In fact I haven’t programmed anything of note since 2004 when I worked on a Fantasy Hockey League website. The good news is I haven’t forgotten everything I know and I decided to dust off the cobwebs and put my programming skills back to work. I am pleased to announce that I am going to begin marketing a new real time translation service called GMSIM Translates! It currently only works with MSN Messenger and it is super ugly, but it works. You can use it here (does not work with IE9, a Microsoft problem, not mine).

     
    The project took a total of 9 hours (start to finish) and most of those 9 hours were spent trying to remember how to use JavaScript. Most of the project was created using sample code provided by Microsoft and Google. A couple of things had to be improvised and some things needed to be changed to ensure Firefox and IE compatibility. However, if I needed to recreate the project from scratch I am confident I could do it in under 2 hours. This quick time frame means I haven’t done much bug testing though, so it may not work perfectly in all circumstances. It did work perfectly for me in Firefox 4.0.1 and Internet Explorer 8.
     
    That being said, I am no longer a doubter of Ortsbo’s (and therefore Intertainment’s) true value, although the Fund remains short the shares. The more that Ortsbo is worth, the more that GMSIM Translates is worth. According to their most recent set of financial statements they had 219,914,512 shares outstanding plus another 65,584,363 deep in the money warrants… and a quarterly loss of $6.2mm. Since the warrants are so deep in the money, let’s just include them in the market value calculation (this does not include the shares issued in the most recent financing). The most recent closing price was $1.01 per share for a total valuation of $288mm (including the deep in the money warrants).
     
    In my estimation MSN Messenger is the most valuable of all the chat platforms that Ortsbo uses because people use it the most frequently (MSN Messenger that is) with Facebook and GoogleTalk falling 2nd and 3rd. So I don’t think it’s unreasonable to say that the MSN portion of Ortsbo is worth 25% of the entire company (i.e. without MSN it would be worth 33% less). From previous commentaries you already know my belief that Ortsbo is the entire value proposition for Intertainment, so we can assume the MSN portion is worth $288mm x 25% = $72mm.
     
    I have decided to offer GMSIM Translates for sale to anyone that wants to buy it. I don’t really feel like going through certain steps so I will take that into consideration when coming up with a value:
     
    ·        Starting point is $72mm (as outlined above)
    o       Subtract $5,000 to pay a graphic designer to make it pretty.
    o       Subtract $5,000 for bug testing that I don’t want to do.
    o       Subtract $1,000,000 because it’s not a public company and I don’t want to go through that rigmarole (liquidity discount).
    o       Subtract $500,000 because I don’t have Gene Simmons on board yet
    o       Subtract another $500,000 for Paul Stanley
    o       Subtract another $250,000 for Steve Nash
    o       Subtract $1,000 because I think my webhost uses cloud computing but I’m too lazy to check if its Windows Azure or not
    o       Subtract $8.95 because my domain name expires this year and will need to be renewed
    o       Total subtractions: $2,261,008.95
    ·        I am a motivated seller though and I really don’t want to quibble about the subtraction numbers. So I’m going to multiply them by 10x to be on the safe side and really get this program sold quickly. This makes total subtractions $22,610,089.50.
    ·        Because I’m extra generous I’m going to round that to $23mm for a final sale price of $49mm.
     
    I should add that GMSIM Translates currently costs just $7.95 (NYSEARCA:USD) per month to operate. This is substantially cheaper than Intertainment’s current monthly burn rate and should increase the value of GMSIM Translates. I’m going to ignore that fact in my value calculation though, that’s just a free bonus you get when you buy GMSIM Translates!
     
    If anyone wants to buy GMSIM Translates from me then $49mm is the price. I think that’s pretty fair for 9 hours of my time. If I don’t get any buyers in the next week or so then I will be forced to develop some traffic for my site, as I discussed in my first commentary (here). It might cost me some money, but I think it will really help show the value of GMSIM Translates!
     
    In the meantime the Fund is going to remain short Intertainment to hedge my real time translation exposure, but once I sell GMSIM Translates for $49mm you can be sure that the Fund will cover. Hell, even if I can get $20mm I will cover (I hope this doesn’t weaken my bargaining position with potential buyers!).
     
    As mentioned in previous postings, I continue to look for reasons why I may be wrong, and if I found something, I would happily change my position on this blog and to avoid losses. Once again, I am available to be convinced as such. If convinced, I would happily even consider reversing my position and go long. Of course, the easiest way to convince me would be if GM SIM Translates gets sold for big money, so send those offers in.
     
    Finally, I once again think this will be brought to the attention of Intertainment’s management. They have yet to respond to any questions I have asked them, but I am going to ask why they have started advertising 040 (their Outlook translation software) on Stockhouse. When I click the ad it brings me to Ortsbo.com and I can’t find a spot on the page to download 040. If you’re going to pay for ads wouldn’t it at least make sense to ask me for my e-mail when I click the ad so I can be notified of when the product is available? And speaking of 040, why did you create a translator for Outlook when it already has one built into it (and most other Office products see here)?
     
    Disclaimer: The Fund I work for is short shares of Intertainment Media and actively trades the stock.
     
     
     
    Stocks: ITMTF
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Comments (9)
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  • TaiwaneseChallenger
    , contributor
    Comments (2) | Send Message
     
    Nick,

     

    I'll offer you $0.50 for GMSIM (which is really what INT shares are worth). GMSIM actually worked better for me than Ortsbo.

     

    I originally bought INT when it was 10 cents a share but sold it after I couldn't get it to work on 5 different computers using 3 different broadband service in 3 different countries.

     

    Keep up the good work !
    5 Jun 2011, 12:20 AM Reply Like
  • Rectalabe
    , contributor
    Comments (4) | Send Message
     
    Hey Nick, since you are so cavalier in your attitude why not tell us how many shares you/your fund is short and how many you actively trade. People that are long divulge the number of shares they are long!
    5 Jun 2011, 03:39 AM Reply Like
  • Rectalabe
    , contributor
    Comments (4) | Send Message
     
    If this is garbage why have insiders recently bought into the recent pp to the tune of close to 1 million shares?
    5 Jun 2011, 03:39 AM Reply Like
  • sharkit10
    , contributor
    Comment (1) | Send Message
     
    Hey Abe. How many user do you have for your translation website and did you get 48 mm PP?
    5 Jun 2011, 03:50 AM Reply Like
  • investingperson
    , contributor
    Comment (1) | Send Message
     
    Mr. Abe, I believe your understanding of social media plays needs a little fine tuning. Example: Skype has never made money and was purchased for 8.5 billion dollars. Most social media plays take time to develop some longer than others. I have done exhaustive research into social media plays and in my opinion INT is growing faster than any before. Your previous blog with regards to the usage numbers being fictitious. I guess your are calling the largest social media company a lier [ google ]. No sir I think it's your credibility that is in question here. Ask your previous employer. Where you not fired and charges laid?
    I have over 40 years of investing and researching my investments as I do my own investing and do not rely on people like you. The tactics in my biased opinion are things that a crook would use.
    5 Jun 2011, 03:51 AM Reply Like
  • socialmedia33
    , contributor
    Comments (2) | Send Message
     
    A hearing panel of the Investment Industry Regulatory Organization of Canada has suspended the membership of Magna Partners Ltd. as an IIROC regulated firm until certain conditions are met and ordered that the firm cease dealing with the public.
    Magna Partners, a Toronto based Limited Market Dealer providing private and public companies with capital raising and advisory services, consented to the order.
    The suspension followed an expedited hearing held on August 13 in Toronto.
    The firm’s membership is suspended until such time as a qualified chief compliance officer is approved by IIROC.
    During the period of suspension, Magna will be permitted to liquidate any existing inventory long positions and repurchase any existing inventory short positions.
    On February 12, 2010, the Ontario District Council of IIROC approved the acquisition of 100% of Magna Partners shares by Robert Sheldrick, subject to the condition that if the existing chief compliance officer, Nicholas Abe, resigned or was terminated Magna Partners was to cease all registrable activity until a qualified CCO was approved by IIROC.
    Abe terminated his relationship with Magna Partners and ceased acting as the CCO on July 5.
    Magna continued to conduct registrable activities without a qualified CCO until July 28.
    On August 3, the firm agreed to cease all registrable activities until a qualified CCO is approved by IIROC.
    ________________________-

     

    Look Familiar? lol. start looking for another job ABE. You are grasping at straws once again. good luck to you
    6 Jun 2011, 02:39 AM Reply Like
  • socialmedia33
    , contributor
    Comments (2) | Send Message
     
    A hearing panel of the Investment Industry Regulatory Organization of Canada has suspended the membership of Magna Partners Ltd. as an IIROC regulated firm until certain conditions are met and ordered that the firm cease dealing with the public.
    Magna Partners, a Toronto based Limited Market Dealer providing private and public companies with capital raising and advisory services, consented to the order.
    The suspension followed an expedited hearing held on August 13 in Toronto.
    The firm’s membership is suspended until such time as a qualified chief compliance officer is approved by IIROC.
    During the period of suspension, Magna will be permitted to liquidate any existing inventory long positions and repurchase any existing inventory short positions.
    On February 12, 2010, the Ontario District Council of IIROC approved the acquisition of 100% of Magna Partners shares by Robert Sheldrick, subject to the condition that if the existing chief compliance officer, Nicholas Abe, resigned or was terminated Magna Partners was to cease all registrable activity until a qualified CCO was approved by IIROC.
    Abe terminated his relationship with Magna Partners and ceased acting as the CCO on July 5.
    Magna continued to conduct registrable activities without a qualified CCO until July 28.
    On August 3, the firm agreed to cease all registrable activities until a qualified CCO is approved by IIROC.
    ------------------

     

    Look familiar ABE? Good luck with your next gig build whoppers at the local BK
    6 Jun 2011, 02:39 AM Reply Like
  • alamtariq
    , contributor
    Comment (1) | Send Message
     
    After reading your several writings on Ortsbo, it sounds you do not understand business model and value of int.v. You know that int.v was 10/20 cents in January 2011 just based on the technology that you are talking/explaining everytime. The share price of int.v moved to over 1 dollar is not because of what you are talking, it is because of –
    1. How Ortsbo relates with other social media like facebook, MSN, twitter etc
    2. User friendly design
    3. Online user base that can also be linked to their other services
    4. Innovative ideas and services - KNCTR, AddTaffy etc
    5. Finally future of int.v not present int.v

     

    It sounds to me YOU ARE SIMPLY TRYING TO BUY INT.V SHARE AT LOW PRICE.
    12 Jun 2011, 11:55 PM Reply Like
  • bbg
    , contributor
    Comment (1) | Send Message
     
    Mr. David Lucatch reports

     

    INTERTAINMENT BEGINS PROCESS TO IDENTIFY AND TAKE LEGAL ACTION AGAINST ANONYMOUS DEFAMATORY POSTERS

     

    Intertainment Media Inc. has engaged counsel to begin the process of identifying and taking legal action against individuals or groups who have posted defamatory remarks respecting the company and its employees on Internet bulletin board sites.

     

    The company routinely engages in communications that are forthright and open to discussion by all parties. It regularly provides market updates and non-confidential information to educate and inform the public at large about its activities and endeavours.

     

    Intertainment has previously identified improper posts to the operators of the public bulletin boards on which these abusive posts were made. Removal of abusive posts and short-term suspensions of as-yet-anonymous posters followed. The company is now stepping up the process to identify the persons making improper postings and will consider legal options.

     

    Intertainment has engaged its corporate litigation counsel in Toronto and Vancouver regarding this matter with an expectation of immediately commencing action.

     

    We seek Safe Harbor.
    26 Nov 2011, 04:40 AM Reply Like
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