There is no mystery to the casual entertainment the penny shares of Freeze Tag Inc.’s (OTC: FRZT) stock sketched on Tuesday as the price rose like a rocket. FRZT stock played tag to the tune of 675 executed trades worth $430 thousand before closing at nickel. Even though there was a 25% gap on the open from Friday’s close, FRZT reached as high as .08, a 185% gain from Friday, trading nearly 8 million shares. That’s one hell of a casual way to enter into the penny stocks to watch list. So, what’s in store for the Freeze Tag and why was it one of the hot penny stocks Tuesday?
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FRZT Stock Chart
Market Cap: $2.21M
Price/Sales (ttm): 3.05
52wk Range: 0.35 – 0.028
Shares Outstanding: 44.11M
Float: 18.41M
There is no doubt that FRZT stock was thinly traded until today but just look at the stats above there. The Price to Sales ratio means they actually have sales and it far better than Facebook Inc. (Nasdaq: FB); 15.27, Zynga Inc. (Nasdaq: ZNGA); 3.68, and even Glu Mobile (Nasdaq: GLUU); 4.15.
Investing in a company like Freeze Tag that, for all intents and purposes, never really traded until Tuesday is a win-win situation for those who have a long-term vision towards the apps world and how gaming fits into it. It’s not as hard as the Etch A Sketch your parents kept in the back seat of the car to keep you quiet as you tried to dial in a couple of straight lines to make a box. FRZT’s Etch A Sketch® application was one of the first 500 applications introduced at the same time as the iPhone in 2008 and Freeze Tag has continued working with Apple Inc. (Nasdaq: AAPL) since the launch of the iPhone.
At present:
• the #1 and #2 paid apps on iPhones are both games: Angry Birds Space and GTA 3,
• 3 of the top 5 paid iPhone downloaded apps are games,
• 4 of the top 5 free iPhone downloaded apps are games, and
• 6 out of 10 of the top grossing iPad apps of all time are games
Freeze Tag is in a marketplace that includes every red-blooded American born since the late 60’s that grew up with a Comodore 64, an Atari, ColecoVision or Nintendo as well as every single person on the planet that owns either an iPhone, iPad, Android phone, PC/Mac or visits any of the emerging platforms like social gaming sites. Translation: KACHING!
FRZT Financial Highlights
Digging into Freeze Tag Inc.’s SEC filings reveals a hair raising fact: the Company reported a 14% increase in revenues to $732,591 for all of 2011 compared to $643,518 for all of 2010. Translation: KACHING!
Yeah, they wound up with a loss of $208,706 for 2011, but even we are working with an accumulated deficit as we get our name out there in the marketplace. It only takes one partnership to get your name into the money hat and Freeze Tag did that with their partnership together with Big Fish Games in March to launch Amelia Earhart Unsolved Mystery Club HD. The game has performed extremely well, topping the charts in several categories, including Apple’s iPad Top Adventure Games (#1), Top Free Games (#4) rank and Top Grossing Games (#48) charts. This is just one of the many games Freeze Tag has developed or been involved with.
All of Freeze Tag’s games are available for a limited period of time for free. This is the standard format in the industry, and applies to all three of the Company’s methods of distribution. Once required to purchase a game, the purchase price ranges from $2.99 to $19.99. Note: On (industry) average, 1% of the users purchase a game after they try it. However, Frezze Tag games are purchased by an average of 4% to 5% of the users who try it.
Who is Freeze Tag Up Against?
Casual gaming is the most popular of the gaming apps and Freeze tag has a niche on that already. The competition in their industry is so sexy if you look at the right words. Casual game industry publishers typically provide funding, development guidance and distribution for casual games for online, retail and mobile platforms. Some of the largest casual game publishers are:
• Rovio: creators of Angry Birds – Esbo, Finland
• PopCap Games: (acquired by Electronic Arts Inc. (Nasdaq: EA)) creators of Bejeweled – Seattle, Washington
• Big Fish Games: creators of Mystery Case Files – Seattle, Washington
• Zynga: creators of Farmville – San Francisco, California
• Playdom: (acquired by Disney Inc. (NYSE: DIS)) – Mountain View, California
• GameHouse Partners: (division of RealNetworks) – Seattle, Washington
• iWin: San Francisco, California
• Chillingo: (acquired by Electronic Arts Inc. (Nasdaq: EA)) – United Kingdom
• Iplay: (division of Oberon Media) – Seattle, Washington & NYC
• PlayFirst: San Francisco, California
• Sandlot Games: (acquired by Digital Chocolate) – Bothell, Washington
Note the highlighted word in each of the above. This is what we see eventually will happen to Freeze Tag and every FRZT shareholder, including President and CEO, Craig Holland and Secretary and CFO, Mick Donahoo will be “casually entertained” by cashing in on a ground floor level investment in an already established and growing money making company.
About FRZT Stock:
Freeze Tag Inc. is a casual online games publisher that develops and markets games across the major digital distribution platforms including PC/Mac downloadable (Web), mobile, and emerging platforms like social networking sites (including Facebook). The Company focuses on casual games because of their belief that they appeal to a significant portion of the population. Although the primary consumers of downloadable casual games are women over the age of 35, downloadable casual games are enjoyed by people of all ages – ex-gamer dads, pre-teen kids, teenagers, college students and grandparents.
The Company’s revenues are derived primarily by licensing software products in the form of online and downloadable games for PC, Mac and smartphone platforms. The Company distributes its products primarily through online games portals and smartphone device manufacturers (“distribution partners”), which market the games to end users. The nature of freeze Tag’s business is such that the Company sells games basically through four distribution outlets – WEB portals, brick and mortar retail distributors, mobile distributors and publishers, and their own web portal.
To view the SEC filings for FRZT, click here or visit their website: www.freezetag.com
Bottom Line: FRZT stock is now on the top 10 list of penny stocks that will either become acquisition targets or one day up-list to either the Nasdaq or NYSE Amex exchanges. The mobile and social gaming market is hot event though the markets have reacted poorly to these kinds of plays over the past month because of Facebook. That makes FRZT that much more attractive simply since their financials beat almost every one of them like Donkey Kong with a barrel of fire.
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