Doug,
I ahve no argument with you here, but we cannot always assume that
the market valuation of companies is rational.
When Netscape went public its market capitalization was something like
$2 billion or so. They had barely any sales, no profits and only offered
the prospect of a product that may be THE vehicle to use on the Internet.
As it turned out the speculators were right and Netscape used their market
value to acquire some real hard assets through stock swaps.
Another good example is Rambus.
Naxos' market cap is probably too high today given the fact we have no
solid confirmation yet on COC samples. The fact that it is where it is, is
simply anticipation there might be something good.
Once the that anticipation is confirmed, we turn to the next phase, but in the
meantime expectations will be higher and the investors are likely prepared
to up the ante and we will see a higher market cap.
Would that be reasonable, perhaps not, but then again, the market is not
always reational as I illustrated with Netscape and Rambus. Actually, there are
a few more that went on the same tear, but ultimately floundered, so success is not
guaranteed.
JMO
Jan A. Van Hummel |
