Small Fry -
I covered my short when USWB hired an adult to run it's business. You will also recall that I indicated that the replacement of Firmage gave USWB a higher likelihood of success. Nonetheless, I view it merely as a trading stock, and have held positions long and short over the past year or so.
You've stated that my argument is full of holes yet fail to show me the light. The point on a per employee valuation should be rather obvious - employee hours are the inventory, it is what you sell to customers.....so, if I have a stable of employees today that can generate around $158,000 each year, and the market is paying over $1,200,000 based on todays employee base, the math is quite simple that in order to get a decent return on investment the company will have to grow very rapidly to make the numbers work. Let's say each employee clears you $50,000 - Would you invest $1,200,000 today for an employee that can generate $50,000 per year in profits ? NO.
So, clearly investors (or fools depending on your perspective) are paying for the future growth. My perspective is that they are overpaying.
I will be happy to come back in June/July. To be specific, my proposed trade is CATP long and USWB short. This trade takes advantage of the valuation disparity between the two, and is a lower risk way to play the services industry.
USWB has always been a service stock masquerading as an internet stock.
rick. |
