Barb,
As I'd been out of this one for quite a while, I took a quick look at the financials before punching the "Short" button yesterday. Their latest filing is the Q3 10-Q dated 8/12; we should be seeing the 10-K in the next three weeks. They did, however, release unaudited results for the year on 10/27.
As of September 30, they were still losing money, with a loss of $6.4 million for the quarter and $13.1 million for the year. This was less than the prior year, but cash was only $1.7 million at year end. The convertibles had all flipped by the end of the fiscal year, but I suspect that they'll have to go back to the well very soon, and maybe this release was timed to get the convertible preferred investors an attractive price.
Clearly, with the low penetration of Linux relative to MSFT operating systems, this new product announcement will mean very little in incremental sales, at least for the near term. IMHO, Y2K and Matridigm made a much more juicy story, because the touts could manipulate the numbers to create billion-dollar sales projections. The new versions of VisualRoute are just different flavors of something that's already in their numbers. Once people figure that out, I suspect the stock will drop back just as quickly as it did in July, when it popped on an IBD recommendation, but fell back to prior levels within 2-3 weeks.
I think you're right to let the daytraders run this for as far as they can take it, and then get back in on the decline, as long as upticks are available.
Regards,
CMason |
