“Hi-def video is the new e-mail”

[For those of you who’ve been around for a while, this is one we sleuthed out about a month ago but this is an updated version of the writeup — the company changed names and tickers recently]

“Hi-def video is the new e-mail” is apparently Tobin Smith’s new mantra, as he says in an email from ChangeWave MicroCap Investor. Though as he noted in a speech I heard him give a little while ago, he “borrowed” the term from John Chambers at Cisco. (He also gave much better clues in the speech than he did in this email, by the way)

This was sent in with a sleuthed solution from a reader who wants to remain anonymous, so I can’t take credit … but he did choose the right stock.

So what can we do to “Learn about an incredible microcap stock that has developed a patent-pending solution to bandwidth that can take your $5,000 and turn it into $250,000 in 2-3 years.”

I actually have some extra respect for Tobin Smith, because he usually tells you the payoff may take years on these microcaps … and he also is careful to warn that none of these tiny companies is a sure thing. So at least there’s a little honesty in the ads, and the guaranteed blockbuster returns are not as farfetched as some others posit. And if you ever hear him speak, he’s like the fun drunken frat boy compared to his competitor Louis Navellier, the placid quant in the basement. But that’s neither here nor there.

So … we can subscribe to the newsletter … or we can follow up on the clues.

The clues, for our sleuthing pleasure:

The problem with bandwidth (or one of them, at least) is that ftp is very inefficient … this company apparently has a solution.

“Our little microcap has developed a patent-pending solution that opens the entire bandwidth to data transmission – and it doesn’t require new devices, new boxes, new wires or new anything.”

“This solution is software-based, easy to implement and – best of all – requires Internet users to do nothing different.”

“The technology WORKS and it’s in beta-testing release right now. And full worldwide release could come in the next 60 days.”

“a powerful, yet easy-to-use, tool to download large files 100 times faster than anything currently available. We’re talking a quarter-second to deliver synchronized hi-def video, hi-fidelity audio, text and VOIP. It’s the best solution to the Internet crowding problem by far. And it’s also priced way below competing, but inferior, ‘solutions.'”

Management has “a ton of net worth” and lots of experience with startups.

Stock is trading for “about 50 cents” (this was a little while ago).

So what is the company, according to the Stock Gumshoe’s fearless reader? (and I agree):

Voyant (VOYT.OB)

This company used to be called Zeros and Ones and had the ticker ZROS, and it was trading at 50 cents back in the beginning of March when this email began circulating. They recently changed their name and apparently changed their focus to being more of a media and technology holding company that’s looking for acquisitions. The share price more than doubled since the email and then dipped back down a little, it’s now around 65 cents (I still need to update the spreadsheet to track the new ticker).

The technology Tobin Smith is talking about is from their Rocketstream subsidiary, which really does offer a software solution that speeds big media file transfers by 100X. I don’t know if it works, or if they have compelling competitors, or if the shares will go up or down from here … but at least, thanks to the Stock Gumshoe’s readers (the best readers in the blogosphere, I’d wager), you’ve got the name of this microcap company, and you didn’t have to pay a dime.

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April 17, 2007 11:30 pm

A few years ago, it seemed that nearly every company was going public with an IPO to gain capital investment, but now, with this route effectively blocked to smaller companies, entrepreneurs, angel investors and employees are increasingly looking at the opportunity of a reverse merger with a trading shell on the OTC Bulletin Board, the Pink Sheets or Form 10.

Through the reverse merger, your private company merges into a publicly listed company called a “shell” and gains control. This gives you listed stock that can be leveraged to raise capital.

This whole process might seem shady, but it is not, indeed many well-known companies have gone public through a reverse merger process including Warren Buffett’s Berkshire Hathaway (http://berkshirehathaway.com/), Turner Broadcasting System, Occidental Petroleum, Blockbuster Entertainment and even American Idol (www.americanidol.com)

Investor Peter Klamka of Ann Arbor, Michigan a large shareholder in fast growing solar energy and reverse merger company Girasolar Inc (OTC: GRSR) stated that he thinks “the best way to go public in the current climate for most private companies, is with a Form 10 shell. It can be the least expensive method with the opportunity to avoid problems associated with most trading shells.”

At a purchase cost of approximately $50-$100,000, a Form 10 blank check shell company is an attractive vehicle for private companies searching for a route onto the public markets. But, under the purview of the Worm/Wulff Letters, blank check shares are prevented from instantaneously trading after Form 10-SB shells complete a reverse merger with a private firm, regardless of how long the shells have been reporting public companies.

The alternative is an already trading shell listed on the Pink Sheets or OTCBB, which, with acquisition costs ranging from $150K up to $1 Million is a much more expensive option.

The greatest benefit of using a Form 10 shell company as your route to public ownership is that the purchasing company will retain most if not all of the stock in the shell. Overall the process takes longer, but is ultimately a much better deal for shareholders and the company alike.

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