As for bubbles, you are correct that there is no fundamental reason why it couldn't re-inflate yet again to form a third bubble top even bigger than before, but the dynamics have changed and you can no longer IPO ".anything", so I just don't see it happening. As for your opinion that somehow NETP did not participate in the bubble peak between December and March, I just don't understand where you are coming from. You seem to be unwilling to concede that NETP could ever have been overvalued, or that it is even an "internut" stock, and therefore you are trying to force that notion onto a fact set that just doesn't support it. The facts are that NETP rose sharply during the bubble peak and fell sharply after it. Coincidence? I think not.
You also seem to want to blame the fall on the secondary. The fact is that the SPO did cause the stock to start down. They usually do, but in the end the cash is useful, and the higher book value helps to support the stock. You say that those who believed that the cash hoard would support the stock price have been proven horribly wrong, but I believe that they are correct. In fact, I believe that if they hadn't done the SPO the stock would now be trading in the 6-9 range instead of above 11. Obviously you disagree, but since we can't know where NETP would be trading in the absence of the SPO it is only speculation. I do know that I for one would have been unwilling to pay as much as I did pay for the stock if they hadn't done the SPO.
There is no evidence whatsoever to support your contention that linkage with e-tailers is the main cause of its decline. You appear to have treated a statistical correlation as evidence of fact.
You are correct that I believe that the fact that NETP's stock price has tracked the e-tail sector is evidence that in the minds of some investors NETP is in the same group. I on the other hand consider that to be an investing opportunity because I don't believe that the failure of the pure etailers will compromise NETP's future. Other than the statistical correlation, I can't prove that there is any connection. You on the other hand rely on the fact that NETP keeps saying that they are not dependent on etailers and assume that because they say it, the market believes it. I think the statistical evidence is better than an unprovable belief, but we are each free to believe as we choose.
I do not actually, accept your premise that all e-tailers will inevitably fail because of lack of cash.
I never said that. Obviously I believe the reason they will fail is because they are "cash sucking", i.e. because they have a fundamentally unsound business plan. I said they will fail when they run out of cash, which is very different. The difference is kind of like analyzing the crash where the guy strapped the rocket to his car, went airborne after his brakes failed, and crashed into a cliff. The true cause of his death was because he strapped a rocket to his car (a fundamentally unsound idea), but he died when he hit the cliff, and if you were charting his progress towards the cliff, you could predict the time of his death.
PR has been deficient.
It always comes back to that for you, doesn't it? You believe that the fall in the stock was solely caused by the lack of PR, and is unrelated to the bursting of the bubble, and the fall of the etail sector. I, on the other hand, believe that the fall in the stock price was caused solely by the bursting of the bubble, and therefore in my opinion no amount of PR could have changed the inevitable. Obviously we have a major disagreement that we can't resolve.
What is your prediction of the year-end stock price, by the way? Or are you predicting that they will be taken over before then (which is always possible)?
Carl |
