Two analysts downgraded today.
Additionally reading the earning release it appears pricing pressure is killing margins
Three Months ended Six Months ended
September 30, September 30,
1999 2000 1999 2000
Revenues $20,705 $22,935 $33,777 $30,791
Cost of revenues 8,701 14,744 12,586 19,036
Gross profit 12,004 8,191 21,191 11,755
Operating expenses:
Research and development 9,302 11,657 16,960 22,872
Sales and marketing 5,511 7,615 10,848 21,510
General and administrative 3,052 3,827 5,748 8,577
Total operating expenses 17,865 23,099 33,556 52,959
Operating loss (5,861) (14,908) (12,365) (41,204)
Interest expense associated
with warrant issuance -- (1,557) -- (1,557)
Additionally costs (R&D, sales and admin) were all up.
One the plus side Hawkins stated that margins should improve in next 6 months.....resulting from new products (probably related to PSII).
My take is he has been dropping price to move product....sign of weak strategy.
Add to the mix, the time of year and THDO's price weakness and it should be no surprise that the price crashed.
I'm sure it'll bounce a bit, however I'll stay only if they demonstrate the ability to move good margin product, a sign of strong products.
m2
PS I bougth in in May/June and was trying to decide between THQI and THDO......would have been much better off spreading the risk, as it turns out I bet on the weaker horse |
