Thanks Sy...I will try it if it's fixed now. Here are some thoughts from another message board on the present situation....
Topic: Now The Future Begins.....All Over Again -- Message number 6 of 12. ( View ALL of them )
Caution out there to those of you who will buy on weakness. (This is just MHO, and it's not going to be a very popular one. Feel free to say I'm wrong. I'll be the first one to tell you it hasn't been the first time.)
At this point, Jain has told the street he owns a company that will bleed red ink for four more quarters. At the rate the stock has been dropping, does he have four quarters left? Presumably, the company would be bought, before then, on further stock price weakness, or, disastrously, allowed to simply run to ground.
How much is a company worth if it promises you it will lose money each quarter? $8 a share? $12? None? The latter is more likely than the former two.
Remember, there's no clear guidance, now, as to when INSP will reach profitability. And the street may not tolerate the idea that 'this year is for building, next year is for profits.' INSP already sang that song. (And was allowed to, though the stock price was punished mightily for it.) This was to be the profitable year. Jain is not necessarily popular on the street as it is. Will analysts let him get by with that kind of guidance? (Obviously they won't. The downgrades are already out, this morning.)
Will new buyers come to a stock with NEGATIVE earnings, (projected through the next solid YEAR, and a big restructuring plan on the table? Put another way, if you didn't already own INSP, would you be a buyer, here?) Or would you say, "I'll wait a little while, a couple of quarters, maybe, to make sure the soft landing is in place, and the company's restructuring efforts are actually working." Bluntly put, there's not a compelling reason to buy here, unless I'm betting on being profitable in 2002, (which quarter? 3rd? 4th?) and think I can get a 'quick double' in 24 months time or so, for a nifty 50% gain a year. (And that's sheer speculation at this point, which is fine, because INSP is getting into awfully speculative prices. Remember, I don't KNOW that the company is headed for profitability, in any quarter, at this point. And I no longer have 40 points to ride down with while it gets its infrastructure in place.)
Make no mistake. That conference call was devastating. INSP is trying to 're-make' itself. This constitutes a shift in the business plan, going forward. (INSP has essentially decided to be a B2B business, and their revenue stream will NOT grow through customer growth, but by tapping existing customers for additional services.
In an economic downturn, who's buying more services? Aren't down turns, by their nature, contractionary periods, where businesses and consumers (who just got thrown out of the boat) buy less? How much more does each INSP client have to spend to get the company to profitability? Will they do it? In a Downturn? Won't they, too, adopt a 'wait and see, maybe next year' attitude?
Wireless income is projected to more than double. Yet, that still won't even get the company to 'even' status, by INSP's own calculations. How fast must the company gut itself in order to break even? Who will pay top dollar for the assets it wants to sell? (No one. Top dollar for assets is a thing of the past. Economic downturn, remember?) Okay, who will grab whatever is offered for cheap? Probably somebody, and that will reduce operating expenses, but how soon?
I am NOT trying to be the voice of gloom and depression, here, I swear. But some very sobering forecasts got made, last night, by this company's CEO. We all pretty much assumed this would be the year INSP would at least turn some kind of profit, and even if it wasn't much, (The PE was still ridiculous,) it distinguished INSP from every other money losing dot com. Unfortunately, we no longer have that distinction. We're not any different from a money losing dot com, many of whom have gone out of business in the last year. INSP IS a money losing dot com. Again. How kind has the street been to those this year? The street isn't going to help those businesses out, capital wise, this year, (or at least not for the next few forseeable quarters.)
In 30 days, Jain needs to have the confernce call of his life. He needs to have a VIABLE, reasonable road map to profitability, and it better be quick, for everyone's sake. "We'll not make any money this year, but we'll be outrageously profitable next year...or the year after" just isn't going to buy him any time, with the analysts, anymore. Might the company simply languish, until next year? Sure, until the next time insider selling rears its ugly head.
Whatever the costs are that are causing the company to bleed red ink, they'd better be brought to heel, NOW. Jain will need to come to the conference with sales contracts in hand, showing what parts of INSP he's dumping, and for how much. And a strong balance sheet in the other, showing the quarter INSP plans to turn profitable again. And heaven forbid he sells a large block of stock again, this Spring. (Analysts might rather snidely imply that the CEO's salary could stand a little trimming, along with the rest of the company.)
If INSP predicts Income growth, but EPS weakness, where is the money going? Even the analysts were trying to get the answer to that one. Jain says there will be no new acquisitions, so it can't be from there. How can you make more, but earn less? Is the consumer segment SO weak that it will drag you in to negative territory? Since you're planning to cut that segment loose, won't that fix that problem? Say, by the end of Q2 or so? In 30 days, the answer to that one better be readily apparent.
Please forgive the length of this rant. Also its tone. You all know I wish you every success in the market, and with INSP. But I feel it is reckless to NOT post the negatives I see hanging over the stock, for any of you who may not see them. If you still want to load up on more, under the feeling that things will turn positive, (thanks to the Fed, Naveen's penchant for lower guidance, INSP's association with some very big customers, whatever,) good luck, God Bless and godspeed. I deeply hope you're right, honest. I'd love to see everyone here make a ton of money. And when you do, you can pull up this post, wave it around and say "See? You were wrong. Too pessimistic. Didn't give the company the benefit of the doubt." And I will GLADLY admit you're right. Very Gladly.
Here's hoping for a much brighter picture in 30 days,
Penny
Posted by: QcommPenny on 01/30/01 - 8:12 AM (Pacific)
quicken.com
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Just to clarify, I don't 'hate' the stock. As I said in my previous post, if I didn't own any, it's an interesting speculative play, in expectation of a fast rise, once earnings turn positive again. The problem is, most here do own it, and need it to climb a few hundred percent just so they can break even. (Not saying that can't happen. Heck, it soared to over 30% in one hour at the earnings call, until the forward guidance got aired.)
I think we'll know a lot more in 30 days. If Jain comes forward with an aggressive, reasonable cost cutting plan, and a picture of a 'new INSP' that the street can clearly see has earnings potential, things should look much brighter. But until then, like the analysts, we're just sort of stuck waiting.
Also, there's the reasonable expectation that as each earnings quarter comes in to focus, the path to profitability is clearer. One big cash cow of a customer should be all we need. And I figure Naveen's plan to cross market to existing customers has merit. The INSP platform is widely recognized among some very big industry heavy weights. Getting Nortel, or Microsoft to 'buy more' from Jain could be a real possibility, if the economy turns back in to an up swing. (Fed meeting results are out tomorrow, don't forget.) If the rates ease enough, when will 'speculative capital' make its way back in to the market? As we all know, the market highs were 'overbought' and the market lows are 'over sold.' Where is 'fair value' for us? I hope in income stream grows at a staggering pace, so that number can get even higher. If stock pickers see the income streams growing furiously, say by Q2, wouldn't a good speculative buy be in order, then, in anticipation of rapid profitability in 2002? You'd want to get 'ahead' of the rest of the market, and that could give us a boost.
quicken.com
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There are no cobras to charm in the state of Washington or on Wall Street. I know that is stereotyping, but the facts are plain and simple. There have been enough new announced contracts to allow this company to earn money going forward. I agree with Penny, where is it all going? Naveen's pocket? The wicker snake basket?
Right now INSP is the Wall Street proverbial "dog with fleas". It will not be allowed to get up off the dirt floor until it is washed, trimmed and groomed. On the surface the premise of the business is sound. What lies underneath might be a much uglier picture. I think one thing is for certain. There is no muddled outlook for this company. It will not plod along for several more years. Some companies can just meander along and exist. This one won't. It will either be acquired, fly high on it's own or wither up and die. The sad truth is that either three scenarios allow Jain to make out like a bandit. He has already made a fortune by selling stock so if the company tanks he could probably care less and would blame Wall Street for his failures. If it is acquired he makes another fortune. If it comes through and takes off he makes an even greater fortune. The outcomes for the investors and the fund managers are much less certain.
As of now this is an "Old McDonalds farm" daytrader's stock. Here a scalp, there a scalp, everywhere a scalp-scalp.
quicken.com
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