Here's an update, I sent my first game back Saturday, they got it Monday, and they're going to ship me a new one Tuesday.

Still going well, I really enjoy this service.

I just took a quick look. Their stock is selling for around 1 cent, where it has been for a while. This is in large part because management seems to be paying themselves in stock and selling it on the market, meaning that they are flooding the market with new shares constantly. They're up to over 1 billion shares, and it looks like that's not going to stop any time soon. That'll make it harder for the stock to move.

The reason they pay themsleves in shares is that they are losing money hand over fist, although less this year than last year, and they don't really have the money to pay themselves. Will they make money before they throw themselves on the bankruptcy courts? Hard to say. Hopefully they can grow their way to success, but this is a company that apparently has been around since '98, so I don't think it's easy.

Bottom line, this is a neat, but dangerous, speculation, especially if you're familiar with how penny stocks work. I'd expect that in the next year you'll lose it all, or a good chunk (40%), go nowhere, losing a bit (50%), or make some good money (10%). While those odds don't sound good, the upside could be dramatic (say, a 2% chance of that). If I did invest, I'd do it with money where I wouldn't mind much if it just disappeared. I'll probably poke around a little more, and probably end up doing nothing, because that's what I usually do with this stuff...

Seriously.

"GamerZnFlix! Now with 20% more bling! Word to your momma!"

Couldn't they come up with something that sounded like skateboarding and just, you know, getting more in my face?

I've been researching the company more, myself. I know that they've been flooding the market, but having acquired a larger inventory, a slowly progressing partnership with Circuit City (and plans of resurrecting a potential deal with Wal*Mart), plus the growing awareness of the company through word being spread via forums, leads me to believe that even with a terrible market rating, this might be one of the few penny stocks that has a chance to explode.

While there is so much stock available on the market, there will never be a rise to the Netflix level, I can still see the stock gradually increasing in price, potentially growing to 300-400% of it's current value, or even to higher levels if the company stops releasing hundreds of thousands of shares at a time to the market.

I'm thinking very seriously of snatching up around a fifty or a hundred thousand shares or so of GZFX.ob. If there's any way I can find out if they're going to keep throwing out more and more shares, I will use the lower or higher number of shares depending on the information I get. I figure even if the price collapses, I can swallow it, largely thanks to the wildly succesful growth of my DRPs.

It's a high risk move, but with the popularity and inventory of the company rapidly growing I think it has a much greater chance of paying off than not.

Not at all. Several of the current investors have been encouraging people on communities they frequent to join GZFX.

It's not spreading like wildfire due to the popularity of Netflix and Gamefly, but the popularity is slowly increasing, which is far safer for investment purposes anyways. Companies that explode in popularity have a tendency to die back down just as fast.

One of the questions I'd ask is if this business model is a winner, why is Netflix giving it a pass for now?

One of the fears controlling the share price will be the worry that once this company and others like it build a market, Netflix or Blockbuster Online rush into fill it with much better economies of scale, destroying profits. Is there something about this company that would prevent such a thing from happening, should it build an adequate market for its product?