HerbVic, prior to the IBM news that spiked IBIS's price, all dealings with IBM were already disclosed to everyone that cared to know. The stock price discounted the IBM deal.
Then, the IBM news attracted new people to IBIS, who mistakenly thought that something new had happened. These people were incorrectly assuming that heavy sales would continue to IBM, possibly for years. It would have been great, if it was true. These sales would do a lot more for IBIS than simply bring in profits. The steady sales would improve manufacturing efficiencies and greatly improve IBIS's gross margin. The operating costs would be spread over a large sales base. Then, the net margin would be grand, and IBIS could start broadening the customer base. Briefly, the market was discounting long-term sales to IBM.
However, IBM wants to build their own implanters, not buy from IBIS. The best that IBIS could do was to sell a couple, and then license the technology to IBM. Sure, IBIS will get royalties for every implanter that IBM builds, but it's not nearly as good as building the implanters at IBIS. Once this situation was clarified, the stock started moving back to where it was before the misconceptions. |
