John, I just did a very cursory look at WEBX, it is going up right now, but gosh, the valuation, a billion bucks cap, for a product that needs to be sold one by one to corporate users. Even if I assume their sales rate will double in the next year, I get only $100 MM in sales, and frankly, they have barely 2 quarters of cash on hand (not counting increases in working capital that increased sales will require) at their current burn rate. If they do not increase their burn rate, they cannot achieve that doubling of sales. If they indeed double their current sales rate of $60 MM to $120 MM, they'll need another $20 MM in working capital to support that, they are in a box and IMHO, grossly overvalued.
Why do you like it?
Zeev |
