December 15th CEOcast Weekly Newsletter
Often, investors reap the greatest rewards when new management is in the early stages of a turnaround. Shares of Glowpoint (NASDAQ: GLOW), the nation's first and leading carrier-grade, IP-based video communications service provider, could be poised to rally as its new management team has quickly begun to implement initiatives designed to improve operating results. The company has taken steps to contain network costs, reduce non-revenue generating subscriber locations and make changes to subscription plans to align Glowpoint's underlying cost structure with its revenues. Since the company has exited the hardware business and is now exclusively focused on delivering video communications services after being spun off from videocon
ferencing solutions provider Wire One (which was founded in 2000 as the result of a merger between All Communications, Inc. and ViewTech, Inc.), these cost-cutting initiatives, combined with revenue enhancing moves such as new subscription pricing and plans to be announced in January, could dramatically improve GLOW’s operating results. In addition, the company continues to work closely with industry leaders such as Radvision and Polycom, as demonstrated by announcements last week. We believe the launch and acceptance of new pricing plans will convince investors that the turnaround is for real, making the company’s current valuation look “cheap”. If the stock breaks through resistance at $2 (two intra-day tests of the level last week), it could easily return to the $3 range it traded at in early October. Shares rose 7 cents last week, closing at $1.80. |
