Well, all, I have given up on FNTN. I sold 100,000 shares over the last two weeks after having been in it for about a year.
What did it in for me was when I finally saw the balance sheet (or that six line thing they called a balance sheet). If that is the concept of being fully reporting, then they need to get some new accountants.
Truly, though, what amazed me was the total lack of assets. Remember that this was a company who went public at about $7/share a while back, with about 7M shares outstanding. Where did all this cash go? Even if they only offered 1M shares at that point (perhaps the other 6M from the original are in the "owners" hands, whoever they are), that would have been $7M to spend. Where it went we will perhaps never know. And as for the rest of the shares issued, who knows where that money went either. What I see is a company with less than $850K in assets with less than $150K in cash. No wonder they have to draw shares in lieu of salary, as obviously they would be bankrupt if just one of them drew the normal $200K+/year VP salary.
It truly is a great concept they have, but I wonder if that is all it will be.
By the way, whatever happened to James R. Reiff, Senior VP of Technology? Or Micro Intelligent Systems? Another acquisition that went nowhere? Less than two years ago, James Reiff (whoever he is) was named this post, yet I never heard of him once since then. No one has ever discussed these on this thread:
library.northernlight.com
library.northernlight.com
These balance sheet numbers really bothered me. Not the lack of sales, just the total lack of assets. FNTN is at its current price trading at approximately 20 times book value. I understand what many of you will say that fundamental analysis won't work for this type of company. But, wow, even Intel is only valued at 9X book, and one of the only companies I could find with a higher ratio is Rambus at 50X book. Rambus has some pretty guaranteed revenue growth, though.
Unless FNTN can show some real revenue growth, there is no reason in my opinion for it to be valued higher than $0.30/share. That would be a 5X multiple, very reasonable for a non-internet tech stock.
I will be taking down the FNTN website soon. If anyone wants it, let me know. I'm sorry I didn't do more with it after taking it over from Kevin. Perhaps I am reading this wrong, but cannot justify holding any more with all the broken promises I have heard from this company. |
