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Simon Monger
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I have been an active trader and investor for more than 10 years, having traded financial instruments ranging from options to futures. I tend to focus on undiscovered companies that have exceptional value on their balance sheets, but lack coverage by traditional news and media sources. I built... More
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  • A Behind the Scenes Look at Raystream (RAYS) 0 comments
    Oct 28, 2011 4:42 PM

    Raystream Inc. (RAYS, Free Analysis), a provider of high-definition video compression technology to businesses and consumers worldwide, has more than doubled since it began trading on the OTCBB earlier this month. After breaking through $2.00 per share during today’s session, some investors are now asking themselves when a retracement will begin to materialize.

    Key Highlights

    ·         Raystream provides compression technologies designed to help online videos stream faster and look better, and its stock has more than doubled since its IPO.

    ·         Raystream has also been spending large amounts of money on promotional campaigns that some investors are questioning.

    Raystream Aims to Improve Online Video

    Raystream provides compression technology designed to help online videos stream faster and look better.  Run by Brian Peterson and his management team, the company was founded in December of 2009 started in its current capacity in August of this year, and has yet to report any revenues since its inception beyond $200 received prior to last quarter.

    Last quarter, the company reported a net loss of $34,343 driven by $27,358 in payroll expenses and $12,298 in SG&A expenses, with 154,475,000 shares outstanding. Buy thanks to an auto loan and debenture financing, the company was able to raise $1,969,350 in cash to help bolster its balance sheet and finance its ongoing development.

    Promotions Drive Share Price Higher

    Raystream has also been spending money on promotion. According to HotStocked, the company has paid some $30,000 for 23 e-mails sent out during the month of October. Some investors are concerned that these promotions are the sole factor driving the company’s stock price, and therefore it may retreat after the promotions cease in the future.

    There are also some questions about the company’s acquisition of Raystream GmbH. Public records show that it was just started in July of 2011 by Roman Rumpf. Interestingly, Mr. Rumpf stepped down just a month after starting that company and Thomas Friedli became the sole officer. The same Mr. Rumpf also began Raystream (the public company) and stepped down to let Brian Peterson run it.

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