If you had to choose between buying shares in either Apple (AAPL) or Facebook (FB) right now, which is the better choice? Of course, everyone loves Apple. Forget about the fact they just squashed Samsung (005930.KS), just look around when your’e out and about and you see the logo everywhere. So the answer must be Apple, right?
Facebook is down -50% off its opening price. If you invested in Facebook now and its stock price simply went back to where it started its IPO a few months ago, then that would be a 100% gain! Comparing apples to, well, Apple, how likely is it that Apple would reach $1,350 in the same time span? So, the answer must be Facebook, right?
With Apple breaking to new highs and Facebook hitting new lows, which is the better investment right now? What about LiquidMetal Technologies (LQMT)?
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LQMT Stock Structure
Market Cap: 53.72M
Common Stock Authorized: 300,000,000
Issued and Outstanding: 191,852,906
Convertible Series A Preferred Stock Authorized: 10,000,000
Issued and Outstanding: 506,936
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Leaked photos of the upcoming iPhone in July only add to reasons why taking a chance on LQMT stock right now is worth the risk. With the planned debut of the new iPhone at a special event on Wednesday, September 12, 2012, and with the release date to follow 9 days later on Friday, September 21, LQMT should see itself at the top of the most traded list towards the end of the week.
Adding to the hype was Friday’s SEC acknowledgement of certain items of LiquidMetal to be treated as confidential. (see here) Just note that it’s not a question to how many iPhone 5 or any iProducts set to be launched in the coming weeks, its a question as to whether Apple is using the Company’s technology again and how much are they paying them to use it.
There is a tonnage of future dilution which has been occurring on LQMT stock for years now. On July 2, 2012, the Company entered into a private placement transaction for $12 million which are convertible at any time at the option of the holders into LQMT stock at a conversion price of 0.352 per share. Partnered with the PP were warrants to purchase 18.75 million additional shares at an exercise price of 0.384 per share. Just based on that, investors would see gains of 25% to 37% respectively.
One very peculiar item noted on the recent 10-Q was the June 1, 2012 master transaction agreement with Visser Precision Cast, LLC relating to a strategic transaction for manufacturing services and financing. Under the manufacturing/ sublicense component of the Visser MTA Agreement, Visser will act as a perpetual, exclusive manufacturer of non-consumer electronic products and to not, directly or indirectly, conduct manufacturing operations, subcontract for the manufacture of products or components or grant a license to any other party to conduct manufacturing operations, except for certain limited exceptions.
To close the deal, the Company issued and sold to Visser in a private placement transaction 30 million shares of LQMT stock at 0.10 per share, $3,000. Furthermore, they also issued warrants to purchase 15 million additional shares at an exercise price of 0.22 per share, and a secured convertible promissory note for up to $2,000 which is convertible into shares at a conversion rate of 0.22 per share.
$3,000 and a promissory note for up to $2,000? Think about that for a second? Why would they do a piddly lithe deal like this when they banked $12 million on a cash deal a few weeks later? Licensing their ability to produce non-consumer electronic products sounds a lot like keep working without doing anything that would infringe on their speculated deal with Apple.
Adding more fuel to the speculation fire, note that Apple just legally kicked Korean based Samsung square in the nuts while knocking out their teeth in one fell swoop. On December 1, 2011, LiquidMetal sold LMTK Holdings, Inc. their former Korean subsidiary and manufacturing facility, Liquidmetal Technologies Korea for $100. They discontinued operations there just months after the Apple deal went through.
In case you have no clue, on August 5, 2010, LiquidMetal entered into a license transaction with Apple Inc. which allowed the iProduct maker substantially all of the Company’s intellectual property assets to a newly organized special-purpose, wholly-owned subsidiary, called Crucible Intellectual Property, LLC. The Deal allowed Apple a perpetual, worldwide, fully-paid, exclusive license to commercialize such intellectual property in the field of consumer electronic products in exchange for a license fee which still allowed the Company a perpetual, worldwide, fully-paid, exclusive license to commercialize such intellectual property in all other fields of use.
The iPad mini will be announced at the same September 12 event, as will the new iPod nano. No one can confirm a release date for the iPad mini yet, but it could be the same as the iPhone 5. It seems likely that the new iPod touch will make an appearance on September 12 as well, though no one can confirm any specific information about that yet either.
About LQMT Stock
Liquidmetal Technologies, Inc. is a materials technology company that develops and commercializes products made from amorphous alloys. The Company’s family of alloys consists of a variety of bulk alloys and composites that utilizes the advantages offered by amorphous alloys technology. The Company designs, develops and sells products and components from bulk amorphous alloys to customers in various industries.
The Company also partners with third-party manufacturers and licensees to develop and commercialize Liquidmetal alloy products.
Click here to view the SEC filings for LQMT.
Bottom Line: LQMT could be the best performing penny stock this September. Considering the past deal with AAPL, LQMT went from 0.11 to 1.76, a 1,500% gain. Granted there were only about half as many shares outstanding when they booked the Apple deal, 84,763,339, LiquidMetal Technologies, assuming all the ducks are lined up correctly for speculators and they are part of one of the new iProducts, could explode. The risk appears to be well worth the possible downside when you look at the recent PP deal for 0.352 which were registered on Friday. (see here)
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