Sarasota, FL 4/8/2008 9:47:18 PM
View from Asia and small telecom Hop-on Inc. (Pink Sheets: HPNN)
Pennycents Magazine Reports on Foreign Currency
Pennycents Magazine, the market’s most valuable research tool covering micro-cap, penny stocks and otcbb equities, issued the following daily column by Dan Blacharski.
I’ve arrived here in Bangkok after a 22 hour trip. I didn’t get nearly as many Thai baht for my American dollars as I did a few years ago, but I was still able to buy dinner for four for about $15—so Thailand is still a bargain-hunter’s paradise for Americans. Europe, on the other hand, is another story, and I’m not looking forward to the experience at the exchange window I’ll have when I take my wife to London later this year. Overall though, the weak American dollar is affecting travelers, importers and exporters, and forex speculators dramatically.
The Federal Reserve Board has all but admitted that yes, we are in a recession, and here in Asia, it seems that the economies are weakening as well. The Japanese interest rate is the lowest in the developed world at 0.5 percent and the Nikkei is down. An American recession isn’t just an American recession—it will have—or it would seem, is already having--an impact that reaches around the globe.
“Penny stock” investors may not think the Asian economy is relevant to their investment activities, but they couldn’t be more wrong. What happens on the Hang Seng and the Nikkei doesn’t just affect the Dow Jones, it affects over-the-counter and pink sheet stocks as well, since these macroeconomic factors have a big impact on how much risk investors are willing to take. Naturally, in a weak economy, investors are looking for a little security, and are less likely to put as much money as they might otherwise into high-risk emerging equities.
That said, small-cap stocks still represent another bargain-hunter’s paradise of sorts, and emerging companies that are in the right business for recessionary economies will do well. One such industry is telecommunications. Last week at the CTIA conference in Las Vegas, FCC Chairman Kevin Martin announced the results of the spectrum auction, which brought in nearly $20 billion to the federal government. The auction, which sold off wireless spectrum that became available as a result of television going all-digital next year, is especially significant, because the large amount of spectrum—and the unusual terms under which it was sold—will set the tone for the telecom industry for years to come.
The big winners in the auction were Verizon and AT&T, which both spent billions of dollars, but even more interesting was the fact that 99 bidders other than the major telecom incumbents won 69 percent of the licenses that were being auctioned. Fifty five percent of the companies winning bids qualified as small businesses. In total, 35 percent of the licenses went to those small businesses.
Small telecom companies this year have an unusual opportunity to expand in their marketplaces, and those with a global perspective have an even better opportunity. One such company is Hop-on Inc. (Pink Sheets: HPNN), which announced at the CTIA that it has signed distribution contracts in mainland China. Their HOP2001, which includes 3G dual-mode GSM and CDMA technologies and gaming features, will be offered at extremely competitive prices. Hop-on is known for having developed the world’s first disposable cell phone.
The writer does not own shares in the above stocks.
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