<<Anderson reported seeing continued pricing pressure from all competitors, particularly with regard to large retail contracts. >>
One of the things that disturbed me when I spoke to the company in person was when I asked if they were or were not signing new contracts and growing revenues and hopefully profits...the response I got was that there is extreme competition and pricing pressure and yes, they are signing new contracts, but they may not be making any money on them. They said sometimes in order to get established and get a good reputation, they may have to sell their services for a LOSS, in order to land the contract, which they feel will help them in the long run.....I see some truth to that, as it certainly would help them alot if they had some very big named clients...it will give them some validity(sp?) and possibly attract more big names...but, at the same time..for a company losing money, I am not to keen to hear directly from them, that competition is very intense and they are having to give away their services to land certain contracts.....additionaly, the last press release sounded good, but it also sounded kinda pumpy to me.....almost like they wanted to put something positive out just for the sake of it....anyway, I no longer feel like I can trust management, as they have said so much stuff over the past 2 years, most of which was just pure talk that never came to fruition..a year ago, they were talking about being CFP by now, yet here they are...and what has happened...a RS, a severe drop in valuation...still no profits....still more 're-organizing'.....They made some stupid deals in my opinion..for instance, how exactly are they benfitting from the dorsal deal? IMO, they have made many errors and have misled shareholders and if you cant trust management, you should not own any part of the company....now, with all that said, It would not surprise me if BWNG pulls an infospace...I thought they were dead meat when they did their RS, but look at them now....quite a nice gain after the RS...so maybe BWNG will do the same...I hope so for the longs.... |
