IA: Trading Opportunity in Max Sound (MAXD) $0.55 ?

[Institutional Analyst Inc.]

MAX SOUND® - HEARING IS BELIEVING.

Max Sound traded down yesterday on profit taking, spurred on by an article in SeekingAlpha.com which listed the company, along with five others as overvalued (the author disclosed a short position).

SeekingAlpha.com is a depository of articles and opinions from over 4,000 contributors. Anyone is permitted to contribute and contributors range from high school students to investment managers, some who manage in excess of $100’s of millions of dollars. Sometimes the contributors have positions and would like to share their discovery/opinion with others – some just like to write for the fun if it.

Our position has always been all views, regardless of whether we agree with them or not, are valid. Everyone has an opinion and when we do agree with it, we’re overjoyed that someone has discovered what we have. And when they disagree with ours, that’s fine too.

As we stated in our earlier twelve page report, Wall Street has not overlooked the potential that Max Sound has and has accordingly awarded it with a premium (note difference vs. “overvalued’) valuation near $100 million at current prices. We also noted that the company will have to grow into this valuation, but that the share price could be quickly spurred higher on the announcement of signing a major record label, which seeks to convert its entire library into the next generation format, or into HD Audio™

While rarely do we take any others opinions and/or financial modeling’s to task, we do have to point out one glaring inaccuracy put forth in the SeekingAlpha article which led the author to conclude potential revenues of $60 million five years from now. For the record, we do not forecast earnings or revenues for any of the companies we follow, but merely state basic facts of life such as if there if a company has a target market of 10 million consumers and a product has a $10 price – then the addressable market is $100 million.

This is where he made his mistake. We offered up “two” addressable markets with regards to Max Sound, one huge -- which is the potential conversion of every download that has ever been made at the iTunes store, which is 10 billion or an addressable market of up to $2 billion under the best circumstances.

And one much smaller in scope, which would be the sale of $7.99 Smartphone app. This represents 10 million units annually, or an addressable market of up to $80 million under the best circumstances.

So what did the author do? He totally disregarded $2 billion revenue market potential and focused only on the $80 million market potential. He just totally disregarded it. Go figure. But as we stated earlier, everyone is entitled to their own opinion and their own financial modeling tools.

So we suggest investors look once again at our original report which can be found at www.internetstockreview.com and come to the own assumptions and conclusions, and please…don’t forget about the music conversion potential. And we haven’t even addressed the potential conversion the audio portion of movies another billion dollar market. In fact you could totally ignore the “app” potential and focus only on the music conversion business alone and still walk away enthused about the potential, as we are.

For now, the shares which traded up 8 fold from the recent low are now fetching near half of its recent high, offering a potentially attractive entry point.

 

This publication is a Corporate Profile on behalf of Max Sound® (MAXD) and may not be construed as investment advice. This profile does not provide an analysis of the Company’s financial position and is not a solicitation to purchase or sell securities of the Company. Readers should consult their own financial advisors with respect to investment in this or any company covered by the Reviews. An independent financial analyst should verify all of the information contained in this profile with the profiled company. Institutional Analyst, Inc. the parent company of the Internet Stock Review is an investment research and public relations firm, which has been compensated by MAXD for investor and public relations services. Institutional Analyst, Inc., or principals of, has entered into a multi-year contract with MAXD and has been compensated with four hundred restricted shares. In preparing this profile, the Publisher has relied upon information received from the company, which although believed to be reliable, cannot be guaranteed. This profile is not an endorsement of the shares of the company by the publisher. The publisher is not responsible for any claims made by the company. You should independently investigate and fully understand all risks before investing in this and any company profiled or covered by the publisher. The majority of companies listed on the OTC Bulletin Board have factors, which create an uncertainty about their ability to continue as a going concern. These concerns are typically related to financing (or lack of), competitive environments, lack of operating history and operating at loss levels which is typical of most start-ups. These statements can be found in their most recent 10Q filings and should most definitely be read. Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements which are not historical facts contained in this profile are forward looking statements that involve certain risks and uncertainties including but not limited to risks associated with the uncertainty of future financial results, additional financing requirements, development of new products or services, government approval processes, the impact of competitive products or pricing, technological changes, the effect of economic conditions and other uncertainties detailed in the Company’s filings with the securities and Exchange Commission.