Mike: I share your concerns, but I still feel there is a very good chance here at price appreciation over the next 3 months. I have no idea what your exposure here is, so I cannot speak to your individual situation: re risk vs reward.
I view SEVL like this. The company will make a substantial effort in the next while to turn around the cash drain. This is already underway. From a long term point of view, this is fundamental to any success. It has been the story of many software companies; a lack of good financial management. They have a good chance on success here I believe.
Yes they do need increased marketing skills, that show up where it counts, sales. This will also take a little time. Success here??
However, there are other market factors that in the short run may prove beneficial to the stock price regardless. Among these I feel are the following: perception of progress in solving their problems, possible takeover, amalgamation because of consolidation in the sector, success with Barney, perceived subsequent potential for additional characters, publicity re: their partners Disney & Microsoft, and last, but not least, a market in software and high tech which turns around.
The market in these type of stocks rarely in my opinion reflects true value. Since in fast moving markets like this, who can really predict what will happen. That is why I like the chances here. They have an opportunity to come out with good news, which will raise exposure, and expectations. If by chance the whole thing works out, then a large turnaround is in the cards.
This is not for the low risk investor. I would be quick and ready on this one. IE set a realistic target price. Do not get greedy.
I can see the potential here for a double or triple in price on good news and publicity. I can also see it being short lived.
Good luck.
Eric |
