Micro-Cap Acquires Media Company, Shares Rally On News

By: AllPennyStocks.com News

August 19, 2009
The wave continues to roll among media companies to unite and acquire. Perhaps it is a sign that the economy is improving, however marginally, that yet another player in the field is trying to strengthen its numbers by hearkening to the wisdom of, well, strength in numbers.

In the third week of August, Westminster, Colorado-based cable services provoder NexHorizon Communications Inc. (Pink Sheets:NXHZ) announced that it had signed a letter of intent to purchase the assets of new media up-and-comer Dynamic Media International. The all-stock deal is set to close sometime in this year’s fourth quarter.

The Hollywood-based DMI operates out of three divisions: Dynamic Media Network, the producer and distributor of high-definition original TV content on 14 digital TV channels targeted for worldwide Internet, IPTV and iPhone platforms; Dynamic Media Music, the producer and distributor of original music content through its iRecords music label and its ownership of Zuma Pacific Entertainment Inc, and its worldwide distribution output arrangement with ADA/Warner Music Group; and Dynamic Media Pictures, the motion picture production, finance and distribution division.

NexHorizon Communications, Inc. focuses on identifying and acquiring a series of strategically targeted rural cable systems and networks in the United States. It plans to enhance its acquired basic cable TV service systems to include digital, video on demand, pay per view, high-speed Internet, and telephone services.

Last year brought a number of such purchases; one being Chula Vista Cable, another being National City Cable, to be renamed NexHorizon Broadband of Southern California. Last fall, NexHorizon Communications executed a definitive agreement to acquire certain assets and subscribers from Story Communications, passing along more than 10,000 homes in the rural communities of Oklahoma.

Speed is of the essence with this company; in July, NXHZ announced it had completed the next increase in High Speed Internet upgrade for NexHorizon Broadband systems located in Southeast California. The completed upgrades include expanding the former 5-Meg Internet Service to up to 15-Meg High-Speed Service.

But all this acquisition fever has a downside: year over year, NexHorizon has seen its bottom line shrink from a loss of $2.8 million to an even larger loss of $3.1 million despite an increase in revenues from $29,800 to $343,800. It is hoped that the new acquisitions – particularly the most recent one out of Hollywood – will start generating more revenue, and soon.

Meantime, for those who wish to take on some of that risk and potentially watch their portfolios fatten as a result, the stock remains in bargain country. The news of the DMI purchase brought the stock price up 27% in one day to 0.532 cents – but still short of its peak for the last 52 weeks. In June, the stock hurtled to the dizzy heights of 11 cents, after digging itself out of a ditch of a penny the month before. The speed with which this company is spreading its influence over the southwest should make small cap investors sit up and take notice.

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