My thoughts, would love comment...
I'm as frustrated as most are with this stock price and after reading various posts here and on other boards, I also realized that post posts could have been on an extremely large portion of technology stocks. All you would have had to do is change Snyder to that CEO's name. Look at CTXS which IS making a profit and it about 2 points higher than NETP and was at 50's a month ago, 100's 3 months ago.
My biggest frustration is if you look at the goals and plans of the company in terms of revenues, profits, and growth and look at where they and probably IPO investors felt the companies numbers would be at, then I think they are well beyond their targets. The only thing I can find as majorly wrong with this company is the stock (price). Granted, maybe the SPO wasn't needed then, but looking back, if they didn't get that cash then we'd still be looking at a company which wasn't quite to profitability, had only about 6 months worth of cash left, and might be considering going out in the market and borrow NOW. Perhaps you could say the SPO hurt the stock price, but in terms of dollars if they were going to need to do it between March and August, that was the best time to do it.
In April many stocks were grossly overvalued, perhaps NETP was overvalued but I wouldn't say grossly. Why were stocks that had NO profits and weren't expecting to make a profit for years to come if ever (Amazon for example) so highly valued? No one was looking at the numbers and fundamentals of the company except revenues. The saying was grow revenues at all cost first, then worry about a profit. Now that's reversed and NETP on both counts was caught in the crossfire. When revenues were the most important thing, they were just growing and had not hit the big revenues numbers yet. Now its profitability first, and they're almost there, but not quite, so they're getting beaten down until they can show they can make a profit. Even the Barron's article about companies which were going to run out of cash before they became profitable came out a week before the NETP SPO, so they were listed in the article although it was a mute point. Could management have addressed those problems, I doubt it, this company probably wouldn't have even IPO'd until this year under "normal" conditions, but today is a different tech world.
So what do I think management needs to put on their list of priorities, stock price. Sure the financial numbers will start to turn toward profitability and help the price. But all you need to is look at EPNY and see the difference between promoting your stock and not promoting it. But I do see them addressing it. Road show a month ago, Analysis day next week. Hired 2 more PR people who seem to have responsibilities which are centered on stock awareness. What do I truly see as what's needed to correct a problem in this stock. I see a primary rotation in the stock ownership. Until something happens to get rid of the investors who (and understandably so) are more than willing to sell at 19 so they can rebuy at 11, shorters, and the VC's, well then things will reverse. That's why a major push on new stock ownership is so fundamental through institutions and analysts in a major push, coupled with profitability and new product announcements. Only when that trading pattern changes will this stock fly. I should also say I think there are some major institutions on the sidelines more interested in seeing it hit 70's than 19 and will jump in if they think that pattern has been broken. They tend to be longer term holders instead of 3 week traders on a smaller stock like this, so they won't move until they think it's closer to breaking the pattern. They don't want to park money (or more money)in a small stock like this until they feel it's about to or has broken out. But when they do move it will probably be substantial. The SPO investors tend to be longer term and also have deep pockets would love to throw more money in at 15 if they think it's about to break out, or at 25 when it has and ride it right up to the 50's. When that comes you will see everyone saying how this is such a bargain stock in the 30's because they will targeting the 70-100 range. You'll hear everyone talk about how solid the numbers are, just like you hear so many of us today saying the same thing.
Well enough of my morning rambling. Oh, and I agree they need to revamp their website. |
