Growing revenues is usually indicative that shareholders are due to see an increase in the share price except for when your’e dealing with penny stocks. A perfect example of this is Net Savings Link Inc. (NSAV) who grew its revenues by 10,000% for the three months ended May 31, 2012 compared to the same period in 2011. However, NSAV stock price has declined -16.67% since the filing and traded so thinly that few investors even know about the provider of Electronically Deliverable Incentives and we have figured out why.
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NSAV Stock Chart
Market Capitalization: 3.33M
Shares Outstanding: 209.70M a/o July 17, 2012
Float: 77.60M a/o Feb 25, 2011
Shares Authorized: 1.00B a/o July 17, 2012
20 Day Percent Change: -34.00%
20 Day Moving Average: 0.0189
20 Day Average Volume: 434,540
For the six months ended May 31, 2012, Net Savings reported $57,722 in revenues compared to $402 for the same six month period the year before and $62,754 since its inception in February, 2007. On March 1st of last year, the Company commenced limited operations by opening their website, netsavingslink.com, to the general public. Before that, they were a mining and exploration company.
Sounds good. However, why it isn’t helping the PPS is simply because since the beginning of 2012, the Company issued:
• 2,000,000 shares of NSAV stock for public relations services valued at $66,000, or $0.033 per share on January 17th,
• 2,857,143 shares of NSAV stock to a consultant for services valued at $108,571, or $0.038 per share on March 29th,
• 5,000,000 shares of NSAV stock to a consultant for services valued at $110,000, or $0.022 per share on May 12th, and
• A convertible promissory note in the amount of $50,000 payable to Asher on June 4th, due approximately nine months from the date of issuance, accrues interest at 8% per annum and is convertible, at the option of the holder, into shares of the Company’s common stock after 180 days from issuance at 58% of the fair market value of one share of NSAV stock based on the average of the three lowest bid prices during the ten trading days prior to the conversion date.
You can grow your revenues to a million dollars and the stock price wont appreciate if you continue to issue stock for services and convertible notes. You can value those services for whatever you want, shareholders will bail out at the first opportunity they can and NSAV will never have a chance of seeing a nickel without a fluke momentum trading session.
About NSAV Stock
Net Savings Link Inc. is a a local e-commerce marketplace that connects merchants to consumers by offering goods and services at a discount. Traditionally, local merchants have tried to reach consumers and generate sales through a variety of methods, including the yellow pages, direct mail, newspaper, radio, television, online advertisements, and promotions. By bringing the brick and mortar world of local commerce onto the Internet, the Company is creating a new way for local merchants to attract customers and sell goods and services by providing consumers with savings and help them discover what to do, eat, see and buy in the places where they live and work.
Bottom Line: Dilution is what kills penny stocks which is why Company’s like Soupman Inc. (SOUP) is such a great investment opportunity: because they don’t water down their stock. NSAV is on the list of penny stocks to avoid unless there is a momentum session, which in that case, is worth flipping for a couple percentage points at best.
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