For the purposes of this article, You are “Harry” and shares in the penny stock of Rackwise, Inc. (OTC: RACK.OB) is “Faro Tech”. RACK has been in the penny stock alerts arena now for a couple of weeks already with HTML adverts that do everything but wash your dishes for you and “hard mailers” which are landing in mailboxes nationwide. The share price of RACK stock is about to drink some “go-go” juice.
Rackwise Inc. is a software development, sales and marketing company focused primarily on IT infrastructure, data center monitoring, management and optimization, data center cost efficiency and green data centers. That’s a great start. Their flagship Data Center Management software product, Rackwise, is used by over 130 companies worldwide to track, manage, plan, optimize and provide cost analysis of IT infrastructure according to their 10-K filed with the SEC.
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RACK Stock Chart:
Market Cap: 100.21M
Price/Sales (ttm): 49.61
(Apr 25, 2012): 1.79
(Mar 23, 2012): 0.53
Avg Vol (10 day): 294,812
Shares Outstanding: 99.22M
Don’t focus too much on the fact that Rackwise address is in Folsom, California where some of the most hardened criminals in this country are incarcerated. It’s doubtful that the 25 member staff (according to Yahoo) would need to use cheap labor to provide support for the 130 worldwide companies they support.
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The History behind RACK Stock
They get started as MIB Digital, Inc. on September 23, 2009 to develop and operate an advertising and subscription supported content management platform. When that didn’t pan out, they merged into Cahaba Pharmaceuticals, Inc. on August 24, 2010.
Cahaba Pharmaceuticals, Inc. was incorporated on August 20, 2010, for the sole purpose of effecting the merger, with an authorized capital stock of 300,000,000 shares of common stock and 10,000,000 shares of “blank check” preferred stock. When that didn’t seem to work, they merged with yet another company on July 8, 2011, Visual Network Design, Inc.
Visual Network Design, Inc. was set up as a Nevada corp. As a result of the merger, that what is today Rackwise, continued the existing business operations of Visual Network Design until September 29, 2011 when they entered into an agreement and plan of merger pursuant to which they merged with their newly formed, wholly owned subsidiary, Rackwise, Inc., a Nevada corp.
The RACK Stock Players:
→ Batting first and playing the position of CEO, President and Chairman of our Board of Directors is Guy A. Archbold. Base Salary: $250,000. Archbold holds a record of 30 years of senior management and entrepreneurial experience in the fields needed to be able to pull of this spring’s OTC pump and dump. He can play virtually every position on the field having logged time in Finance, Investment Banking, Merchant Banking, Venture Capital, Portfolio Management and Alternative Green Energy.
From June 2009 through September 2011 he played for the team of Black Diamond Financial Group, LLC where his primary position was that of a manager of limited partnerships involved in venture capital investments. On every other odd numbered Tuesday when the wind blew in from the East, Guy Archibald would change gloves to play Director and sometimes even dawn the equipment to play Portfolio Advisor.
NOTE: (Consider this to be the Future of Rackwise) From March 2001 through August 2008, Archibad was once again batting first but this time it was for team of Chapeau, Inc. which did business as BluePoint Energy. The state-of-the-art, power solutions were so in-demand that Chapeau, Inc. filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court of the District of Nevada on October 31, 2008.
→ Batting second and playing the position of CFO is, the 23 year veteran, Jeff Winzeler. Base Salary: $175,000. Jeff worked for Intel Corp. during for 17 years until 2005 having played the position of managing financial operations across INTC’s international manufacturing network. The veteran journeyman has represented INTC in Israel, Ireland, China, Malaysia and the Philippines. He most recently was spotted playing CFO for Solar Power Inc.where his B.S. Degree in Finance from the University of Idaho hung on their wall.
→ Batting third and playing the position of Board of Directors Member is Edward F. Feighan (good strong Irish name). Ed is currently COO of Evergreen National Indemnity Corp. as well as Continental Heritage Indemnity Corp. The two are specialty property and casualty insurance companies. For those of you who are considering calling Ed to see if you can get insurance on RACK stock, it’s doubtful so don’t waste your time. Ed’s busy because he also a member of the Board at ProAlliance Holdings Corp.
Starting roughly 40 years ago Ed held elected offices for 20 consecutive years. He played an Ohio State Representative for six years, a Cuyahoga County Commissioner for four years and a Member of the United States House of Representatives for 10 years. Ed’s law degree from Cleveland State University in 1978 has been well traveled over the years to say the least.
→ Batting fourth and playing one of the other Board of Directors positions is Michael Feinberg. Mike spent 45 years as a property developer, owner and investor having owned and/or developed residential and office buildings in the greater metropolitan New York and South Florida areas. Not that Mike isn’t qualified to bat fourth but there are about 400 thousand people living in South Florida with those same credentials. Mike designed and has been the owner of The Club at Emerald Hills golf course in Hollywood, Florida.
Hey Mike, when the hell are the gonna fix the divots on the 14th. And also, seriously consider getting some better looking snack attendants out there.
Rounding off the rest of the batting order for Rack wise are:
→ J. Sherman Henderson III playing Board of Directors Member
→ Kenneth Spiegeland playing Board of Directors Member
→ Doug MacRae playing the CTO and Executive Vice President of Product Development. Base Salary: $185,000 with $5,000 quarterly bonus available based on goal achievement
→ David Wagner playing Executive Vice President Sales
→ Stephen O’Donnell is more of a benchwarmer for Rackwise since his position on the Advisory Board is on an “as needed” basis. Think of him as a middle reliever who can get you Holds and the occasional Save
A couple of “behind the scenes” players are:
→ Emmett DeMoss, Executive Chairman of the Board. 2011 Salary: $225,000
→ Robert B. Ney, Executive Vice President Business Development. 2011 Salary: $243,750
RACK Stock Financials:
Rackwise (RACK) actually has top-line numbers to it.
Revenues were $2.02 Million for the year ended December 31, 2011, a -22% decrease compared to $2.61 Million for the year eneded December 31, 2010. Gross Profit was $1.8 Million for the year ended December 31, 2011, a -20% decrease compared to $2.25 Million for the same period the year prior. Net Loss for the year ended December 31, 2011 increased by 117% to -$8.88 Million compared to a Net Loss of -$4.09 Million for the same period the year prior for a total Accumulated Deficit as of December 31, 2011 of $(33,886,420).
To view the 10-K for Rackwise on the SEC website, click here.
Bottom Line: Is it safe to buy the penny stock RACK knowing that its being pumped and hard mailers are circulated already? Anytime a pump is in effect, there is no harm with riding the wave of momentum as long as you are fully aware of the sharks that are in the water. Don’t become “Harry” and betting the house and your family’s future on RACK.
Rackwise stock, RACK, is right around it’s initial starting share price, $1.01, and should be on your list of penny stocks to watch. How high will the stock price of RACK go? It’s anyone’s guess but you can be sure that in three months, it will be lower than $1.01.