My "make or break quarter" comment was intended narrowly, and from my personal perspective. I think that the company is right on track and looking good, IF -- and this is always a big if for me, because I've seen accounting problems sink companies before -- the 10% reserve for returned units is not too low. I don't believe the posts I've seen claiming that returns are running very high, but then, you have to admit to the possibility, since the machines are sold with a 30-day (or possibly 60-day in some cases, although again I have seen no confirmation of this) free trial/free return policy.
Anyway, right now, the only question I have about the company is the number of returns. If they are actually below 10%, I'm very happy with my holding. If they are above 10%, I'm worried. And this quarter's earnings report should provide a much firmer grasp on the return rate, as the returns will have to be shown on the income statement, most likely as a separate item or footnote, but for sure as a reflection in revenues. |
