Porn's newest public company, if approved by the SEC, will be Pure Play Media Holdings, Inc. They issued a shelf filing in June, meaning they are interested in selling stock to the investing public, they just don't know when. Kind of like a whore showing up for a shoot "around" her call time. Porn and finance don't mix, as whitnessed by the idiots who surmised that Club Jenna sold out to Playboy for $30 million or whatever, by Bob Friedland who got himself melted down when the Smiling Arab got on XPT and exposed the fraud of a company that JKP was, and by lowly Nick Manning wielding a whiffle ball bat to collect his A/R--even JeffMike took along a real one.
So they will sell you a piece of the company for $2.00 per share, and since you probably will have to buy in 100 share blocks, you want to know if it's safe to lay down $400 to own a slice of Pure Play Media. My answer: probably not.
If Pure Play wants to be examined against other peers in the investing public, this is a no-go. The market for $2.00 stocks is not all that great, bids can go unmatched on the OTC BB for days. Not to mention that there is no stated intention to pay a dividend. Remember that a stockholder only has a residual interest in that company, and only profits if the stock goes up in value or pays a dividend. And in a bankruptcy/liquidation scenario, only gets paid after all the federal and state agencies, secured creditors and trade vendors do. And then there is the ten ton gorilla in the room: it's a porn company and, well let's face it--while Stormy Daniels and Mary Carey think they are mainstream worthy...uhh, no, you are still freak shows who still have the porn taint. Porn businesses and the investing public are the same way.
Not to say that PP in itself isn't a decent business. They recently sold off the NinnWorx assets to Michael Ninn which basically had a neutral impact, sales have increased dramatically in some years, and that increase, coupled with a accptable but thin current ratio, put them in a working capital bind (probably causing them to consider going public). PP is not overly indebted (= low leverage) and they distribute some big titles like Danni, Score, and Cousin Stevie, pun intended.
Still, porn has yet to prove that it can generate companies with intrinsic, and profitable, stockholder value. In the U.S., consider porn's largest pubic company, Playboy Enterprise (NYSE:PLA). PLA peaked in 2002 around $16 per share, and closed an hour ago at $9.21. They pay no dividend, have a whopping price/earnings ratio of 57:1, and just announced a huge restructuring. Porn hasn't exactly set the NYSE ablaze with their performance so far.
Search "Pure Play Media" at the Securities and Exchange Commission's website for the mountain of information.
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