Press ReleasesOctober 26, 2021CBMJ Suddenly Becomes A Sympathy Play As DWAC Shares Draw Attention To Conservative Media Stocks


  • We have often talked about how micro-cap stocks will suddenly explode higher, and why establishing a long-term position early gives investors the best chance of catching a big move higher.
  • We had that exact experience with two of our most recent micro-cap investment ideas, CELH and GLUC, where both companies eventually turned into 100-baggers.
  • It is critical that an investor use periods of consolidation, technical basing and general boredom in a micro-cap stock to build a sizeable position that can create huge profits.
  • Micro-cap companies can suddenly catch fire, and when they do investors typically will not have the opportunity to accumulate shares at favorable prices.
  • As the promo for many State lotteries says “You have to be in it to win it”. We have found that to be especially true when it comes to micro-cap investing.

Before we dive into the crux of this article, we would ask that you check out these charts, by clicking on this link.

Those two visuals say more than we ever could about the five summary statements above.

Source: Ahatoexit

They say that timing is everything. That is especially true when it comes to investing.

Just yesterday, Conservative Broadcast Media & Journalism (OTCPK:CBMJ), posted Q3 financial results that were impressive to say the least.

It represented the fourth straight quarter of successive double-digit increases in top line revenues.

It reminded us of when Celsius Holdings, Inc (NASDAQ:CELH) reported successive double-digit figures in revenue growth for the first time in the history of the company.

Most of our articles these days appear on our Google blog page, and we had actually given some thought to giving up sharing our micro-cap investment ideas with our friends and family, by writing about them in a pubic forum which they could then quickly and easily access.

However, we soon discarded that idea, primarily because we enjoy micro-cap investing and writing about the companies that we discover so much, that we just could not see ourselves giving up something that we are so passionate about.

The problem with micro-cap ideas is that they are not suitable for 95% of the investing public; something that we wrote about just recently.

We never want to be thought of as providing investment advice, and we have hammered home that point on multiple occasions over the years. We have also have been very clear about the significant risks and dangers that micro-cap investing entail.

We play in the highly-speculative deep end of the equity market pool, which is not appropriate for the typical retail investor, so please be careful, and invest wisely, if you decide to jump into the water.

However, there is something about seeing one of your investment ideas go from $0.22 cents to over $100.00 that is exhilarating, and keeps us going with the difficult challenge of finding the next 100-bagger.

Just yesterday, we authored an article about how we use insider ownership as a key indicator when performing due diligence on a promising young micro-cap company.

We wrote an article back on May 13th of this year “pounding the table” on Conservative Broadcast Media & Journalism (OTCPK:CBMJ), and how much we like the company, based upon our belief that there would be an outcry from conservatives about some of the censorship that we saw taking place on social media and other news outlets in an attempt to silence the growing conservative crowd.

In fact, in our very first article on CBMJ, on January 11th of this year, we pointed out that CBMJ was likely to be a beneficiary resulting from the conservative media fallout that was taking place at that time.

This current piece is not designed to pontificate on all of the fundamental reasons why we have accumulated close to 10 million shares of CBMJ. You can dive into our research and thesis for yourself by reading our postings on the Seeking Alpha website and on our Google blog page.

This is about developments over the last 24-hours that have suddenly changed the investing landscape for CBMJ and other conservative media stocks.

In case you missed it, the shares of Digital World Acquisition Corporation (NASDAQ:DWAC) rose more than 1,200% over the past few days on news that the Donald Trump-related Special Purpose Acquisition Corporation, or SPAC as they are more commonly known on Wall Street, was going to merge with Trump Media & Technology Group (TMTG), creating a potential Trump-led media empire that would focus on right-wing, conservative principals that would center around a social media and TV platform that would be called “Truth Social”.

The platform would feature what is being called “non-woke entertainment programming”.

While the news came suddenly, and the shares of DWAC were met with a frenzy of buying, it also woke up the shares of CBMJ.

The average daily volume traded in the shares of CBMJ for the past 10 and 90 trading days have averaged 315,494 and 345,360 respectively.

Yesterday, CBMJ traded almost 1,900,300 shares, and today the number of shares changing hands climbed to over 38.5 million, with the shares closing up 64.59%, at $0.739, after hitting an intra-day high of $0.12 cents.

Source: Fidelity Active Trader Pro

This tremendous increase in the number of shares being exchanged among investors during today’s session can be attributed, in part, to day-traders and meme-stock followers jumping on an obvious momentum trade.

Generally, this type of buying in stocks that are in a related sector, or stocks that share some common characteristics, is often called “sympathy buying”, meaning that investors are sympathetic towards the mutual traits of all companies in that investment space.

Whether or not, this newly-found catalyst driving the near term share price of CBMJ, and other conservative media stocks, has a significant impact on their prices longer term remains a mystery.

Investors, these days, have a short attention span and the big moves over the past week can quickly fade with the fickleness of day-traders and meme stock momentum players.

As Roy McAvoy, the character played by Keven Costner in the movie Tin Cup, liked to say “ya ride her till she bucks ya, or you don’t ride at all.”

Source: YouTube

Our guess is that even if the sector begins to cool down somewhat after this week’s initial surge, once we get closer to the 2024 election, there will likely be a resurgence in the level of interest in these stocks, as potential Presidential candidates look for ways to communicate their message, without the fear of retribution and censorship that we saw from mainstream social media players like Facebook and Twitter.

Speaking of Facebook, we should note that a rather interesting article appeared in The New York Times Magazine, back in 2016 that talked about the Liberty Alliance, founded and developed by current CBMJ Board member, Brandon Vallorani.

According to the Times article, Vallorani had found a way “to create and develop something sustainable, and even potentially transformational, almost entirely within the ecosystem of Facebook”.

When Conservative Broadcast Media & Journalism CEO, Mark Scahftlein, acquired Vallorani’s company DeDenato Enterprises in September of 2020, not only was he adding a company that was producing approximately $2 million in revenue, to the CBMJ portfolio of media properties, he was also purchasing the knowledge and experience of Mr. Vallorani; one of the premier marketing minds in the country.

Mr. Vallorani, a Forbes Books published author, who is regarded as a pioneer in the digital media and data driven marketing industry has been distinguished six-times as an Inc. 5000 entrepreneur. He has built and sold two other similar media companies over the past 12 years and has a strong track record of increasing shareholder value.

The idea of having a creative genius like Vallorani, as part of the CBMJ management team, was a primary reason for our choosing to make a substantial investment in CBMJ.

We are looking for Mr. Vallorani to play a major role in the implementation of CBMJ’s strategic business plan, and have confidence in his capabilities to drive new and innovative ways to increase revenues and profits for the company.

One thing is certain, there is now a sudden awareness of CBMJ, and the DWAC tailwind for the stock price will likely cause many investors to take a closer look at the fundamentals of the company.

When they do, they might just decide to stay for reasons other than the idea of riding the current momentum of DWAC.

Either way, we view this as a potential game changer, at least in the short-run, for many of the shareholders in CBMJ, and expect to see further gains realized in the share price over time, as CEO Mark Schaftlein builds on what is already a very impressive micro-cap story.

Source: The Schaftlein Report


Disclosure: I/we have a beneficial long position in the shares of CBMJ either through stock ownership, options, or other derivatives.

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