That is an excellent post, and part of the reason
I am in the stock is the chance of an aquirer coming
along. It seems to me that the price of the stock
reflects the declining revenue as Hotmetal loses the
war to many good, cheap products, but does not reflect
all of the positives. For instance, the stock does not
reflect the probability that a really terrific turnaround
may occur in the next 12 months as quite a number of
potentially exciting products hit the shelves, or that
a company simply buys them out for their titles, prospects,
code, and tax write offs.
It is so strange that people, in this wildly overextended
bull market, are willing to throw money at expensive stocks
--where you know the PE is way ahead of the growth rate,
(where you expose yourself to market risk, but have little
chance for any upside surprises in earnings, call it predic-
tability at a cost) and yet nobody is willing to take a chance
on the obvious huge potential of turnarounds when companies
suddenly go from losing money to turning profits.
It would not surprise me at all to see Softquad put out
a handful of decent products, maybe even a blockbuster
from Alpha, and end up with a nickle a share by Christmas.
Can you imagine the return you will see in the stockprice
if they pull in a quarter in 1999, wow, doesn't hurt to
dream.
What's the risk? That Microsoft (or any of the gaming
companies, ATVI, THDO, BROD, ERTS etc) sees the FS add
ons flying off the shelves, makes and offer, and ends up
getting the Internet code for free--risk=Softquad sells
out for only a couple bucks a share. I like the downside
risk. |
