The issue of my observations regarding NAVR & IFLY was raised by another, I believe I had a right to defend my analysis. I try to be fair and it is in my own interests not to become emotionally involved, whether short, long or day-trading.
The question of valuation is why I went short on NAVR after the first recent pop. It is very difficult to give NAVR a value when its total float is unknown. Before the June 30 S-3 filing we knew there was 3.5 million in the float. Now we could have as many as 21 million. That's a pretty big number.
As far as NAVR comparisons to others, what sector are they in? Well their core business is as a wholesaler, not an Internet retailer. It has become evident from their under-writers report that NetRadio will become a separate company via another IPO with NAVR holding a minority stake. In the meantime, NAVR has a growing business that is being bled by their non-core Internet offering. So NAVR will be a stronger company once they spin off their Internet business. What was the reason why most of us initially were interested in NAVR?
Now, what is the markets sentiment toward the Internet Retail business? A report today in the Wall Street Journal Interactive edition stated that competition in the Internet retail end is becoming very stiff and margins are being squeezed. So, what should a reasonable person be led to conclude? That the Internet business is going to be hit by the same business cycle like every other business.
Right now you are asking me to compare Apples to Oranges. In a few months, I'll be happy to compare NetRadio to CDNOW, etc. Until then, it is in the companies interests to clean up its financials, focus on its core business and spinn-off NatRadio.
Right now I still have NAVR on my watchlist, as I suspect the company will continue to release momentum type news. And, I don't see it breaking out of the previous resistance areas until the street gets better direction from the company regarding its future structure. |
