To all: I have followed PTON for five years...this co was in a league of its own with products better than Cisco, Wellfleet & Synoptics (now Bay Net.). 3-Com and Madge were not even thought about in that time frame. Proteon has always had superior products, they had the fastest routers in the business and were the first to offer large enterprises a complete network solution...if I recall SwissAir and a major Bank (maybe Chase) wired their worlwide operations with Proteon. Their R&D still is well regarded and indeed had been called a "technology bank".
Their problem has always been in executing its business plan. They can't seem to sell the good products that they develop. They got rid of a poor chief executive named Curtin a couple of years back, but by then the co was in a shambles. The new CEO Capone has cut back sharply on expenses, apparently without sacrificing R&D. New products have been developed, and they have now focused on remote access. So the question is now....Can they execute the business plan? Its going to be much tougher than five years ago when Proteon was in the same financial league as Cisco, Wellfleet and Synoptics. Now the competition is much stronger and bigger. But if their product is superior and price competitive, they just might pull a rabbit out of their hat. With 25 million in the bank they can give it a good try. But that money will evaporate if these new products are a failure. You can't buy this stock based on "book value" because, if they fail, by the time it becomes apparent that their sales drive is not successful there will be no "value" left in the books. You should buy this stock if you believe their products are superior and that their sales and distrbution channels can deliver this time. Personally, I'm optimistic. Their recent alliance with NEC in Japan opens a new market for them without the psychological baggage carried over from the bruising they took in the US from Cisco. Once they show they can compete against Cisco abroad, they will have the confidence to go head-to-head in the US market.
JEC |
