Shopping in the sky is monopolized by SkyMall and the penny stock of Xhibit Corp. (XBTC) is offering trades a chance to get their piece of that $100 million annual business. Issuing his “Dear John” letter today to officially make way for Kevin Weiss, company co-founder Chris Richarde resigned from his positions as President and Director of the leader in digital advertising and marketing services. With shares of XBTC now having dipped -50% below the acquisition valuation price when the $227,660,000 merger was sealed on May 16th, the undervalued opportunity doesn’t look like it is going to last for very long.
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XBTC Stock Quote
Market Cap: 242.78M
Last: 2.15 ▲ +0.22 (+11.40%)
Volume: 145,650
Dollar Volume: $303,893
Open: 2.01
High: 2.17
Low: 2.00
Trades: 59
Authorized: 480,000,000
Issued and Outstanding: 111,879,298
14-Day Rel Strength: 26.37%
1st Resistance Point: 2.2133
1st Support Level: 2.0433
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Since the deal was signed whereby SkyMall virtually became Xhibit’s main business, shares of XBTC stock shot up to $7.25 within a week and have since been on a 3 month slide, bottoming out yesterday at $1.93. The reason behind the slide is still a mystery, but the chances of a rebound to the $7 range is not totally out of the question.
SkyMall has been around since 1990 when Bob Worsley, Alan Lobock, Matthew Del Bianco, and Graham Alcock locked heads and came up with a plan to offer products from other companies’ catalogs for same-day delivery to customers arriving at select U.S. airports or, if the customer preferred, to their home or office via express shipment. 23 years later with an annual circulation of approximately 20 million copies distributed in airplane seat pockets, it’s a $100 million dollar business which Najafi Companies, the largest private equity firm in Arizona, purchased in 2012.
Jahm Najafi, through his involvement with XSE, LLC, acquired 44,440,000 shares of XBTC stock in 2 transactions dated May 28 and June 25, 2013. His 39.7% ownership of the issued and outstanding shares SHOULD BE a significant sign for traders to see that XBTC stock will not be trading at under $2 for very long.
According to the SEC filings of the merger, the market valuation of the acquisition was $227,660,000, $4.00 per share plus assumption of liabilities of $49,900,000. An independent valuation firm retained by Xhibit valued the 44,440,000 shares at a price of approximately $0.5738 per share and with assumption of liabilities put the total at $75,440,000 as of May 16, 2013.
Either way you slice it, SkyMall booked net revenues of $92,133,733 and $102,969,185 for the years ended December 31, 2012 and December 31, 2011, respectively. Last year’s $9,229,021 net income would equate to roughly $0.0825 per share, a rare feat for a penny stock.
About XBTC Stock
Xhibit Corp. owns and operates SkyMall, a multi-channel, direct marketer offering high-quality, innovative merchandise from top direct marketers and manufacturers through the iconic SkyMall catalog which is seen by approximately 88% of all domestic air passengers reaching more than 650 million travelers annually.
Click here to view the SEC filings for XBTC.
Click here to view the website for Xhibit, here for SkyMall.
Last 5 Trading Sessions:
| Date | Last | Change | Volume | |
| 08/07/13 | 2.1500 | +0.2200 | +11.40% | 149,450 |
| 08/06/13 | 1.9300 | -0.2200 | -10.23% | 72,000 |
| 08/05/13 | 2.1500 | +0.1500 | +7.50% | 98,100 |
| 08/02/13 | 2.0000 | -0.9500 | -32.20% | 110,900 |
| 08/01/13 | 2.9500 | -0.2000 | -6.35% | 57,300 |
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Bottom Line:
XBTC stock is looking like it has refueled and is ready to run. With Q2 numbers due out next week, the first of which will include both Xhibit’s and SkyMall’s numbers reported, XBTC stock could surpass $3 before the end of August. When penny stocks have reportable net income as SkyMall did for the year ended December 31, 2102, big players come in making early birds getting upgraded from low-class to first-class just by being patient.
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