Daniel, be careful about being impressed with IMOT. Consider the following facts:
1. Chinese company with no U.S. assets or presence. Typical sinister set up with tiny PR firm in Florida as front man.
2. No audited financial statements - and what is there is so incredibly weak that nobody seems to notice that their own press release is the worst news you could expect:
They say they have 1/3 of Chinese companies signed up. Well that SOUNDS great, but consider that their revenues are incredibly tiny. Think about it they have six months GROSS sales of $140,000 and have 1/3 of all available business in their stated core area (business to business in China). They are calling a 10% sales increase "whopping" which is a measure of the drive to succeed and the ignorance of market economies inherent in third generation communists. also note that that shows they are not even close to ramping up sales as you would expect in a startup. Second quarter sales should have been at least 150% higher than first... follow me here?
This carried to its logical conclusion would show that IMOT's near term (within the next five years) potential getting 100% of the market is total annual sales of no more than $800,000. With some excellent expense control the expect annual profit is maxing out at about $25,000.
These dismal facts are all from their own press release. Re-read it an analyze it. I guess the PR guy they hired is a good copy writer.
3. In the next several years the much hyped Chinese internet market "explosion" would make it equivalent to the Cleveland metro area in size. This is the most optimistic figure cited in the 2/7/98 article "the Great Wall Wired" in the respect journal "The Economist". Recent updates have only stated that they are slower than expect and have dragged out the time line for five years. Therefore you have to ask yourself would you invest in a publically traded company that maximum five year potential was doing well in Cleveland?
There are several intractable and pressing problems that make the vast majority of the 1.2 billion Chinese people unreachable for the next 1 - 10 years in terms of internet acess.
First and foremost is that the communist party is deathly afraid of the rapid communication and exchange of ideas that the internet makes possible. Why do you think all communications technology has been so limited in China?
Second, infrastructure that will raise the standard of living, thereby cementing the communist party as the sole power in China, is going to be, and has to be, their first priority. To think otheerwise is to judge the leadership idiots. Why would they allow free flow of ideas when so many of those ideas would be complaints against the way things are?
Now consider the rest:
4. The average, well paid, Chinese person would have to use about two years salary to buy a rudimentary computer.
5. Even if they can afford them they can't get to the internet as most don't have electricity or phones.
6. Demographics reviewed in U.S. models for computer based businesses are upside down as the Chinese edict of one child per family is enforced in areas most likely to be able to adopt technology... urban areas.
7. China is a huge growth market for the basic building blocks of civilization: food, distribution and infrastructure. Corruption is rampant.
8. Few chinese citizens can buy anything outside of China. Even then they need permission, or at least cooperation from the government to do so. Have you had any economics lessons on communists planned economies, and trade with market economies?
9. on and on and on...
Daniel it just goes on. If you have an investment in this company you need to not hype this one as you have already made your money. If you continue to do so you are both betraying your short term strategy, and defying logic.
Do you think the basics of this are any better than CITI. HEAL, FSOL?
Take your profit and have a great weekend. |
