Perhaps the last release was seen as a hollow attempt to jump on the mysterious e-commerce bandwagon? (This was suggested to some extent by a poster to the stockhouse bullboards). However, I think GPW was talking about e-commerce before MCF and BII took off.
I am going to ride it out since the company does have a long history hopefully they can go long and provide value eventually to us who are patient. I rather see a slow build in business with the momentum of growth eventually turning it into a significantly larger (and profitable) company, instead of a quite burst and then let down.
For a contrary view (From stockhouse bullboard):
y2k. Outsourcing. Reasonable growth. For a while there, it seemed like GPW was a promising investment. Except for one
thing: the market will have nothing to do with this company. Volume remains as thin as the president's head is think and a
month rarely goes by lately where the stock doesn't hit another record low. Why? Here's two reasons:
1) Failure to capitalize on y2k. The true benefit of y2k was not so much what it did for revenue but what it did for the share
price of y2k companies – and how that share price enabled acquisition. Compared to their competitors, GPW came up
short in both areas. Compare them to Cognicase, for example. While LGS gloated over a 254% increase in revenue from
1997-1998, Cognicase recorded an almost 9-fold increase. This kept Cognicase shares high, which enabled even further
expansion through acquisition financing. GPW stock, as we all know, went the other direction. It was slow to capitalize on
y2k, it's acquisition strategy was weak, it's stock price plummeted - which in turn killed further acquisitions. Today,
Cognicase shares are worth almost $25. (off 37% from their record high) GPW shares are worth 1.55 (off an astounding
86% from their record high)
2) A failure to shift gears. Not only did GPW fail to effectively capitalize on y2k, it failed to realize the limited potential of
y2k and get out and/or diversify in a timely fashion. I've been told recently that Bill Ste. Marie was actually offered $4 a
share in cash and stock last year for the company (I believe it was Cognicase that made the offer) but turned it down.
Today, that deal would have netted shareholders something like $11 a share. Why did he turn it down? Greed and
stupidity. Bill believed GPW was worth far more. In fact, it was worth far less – and their business strategy proved it. Only
now have they started to shift gears. It was this gear shifting (i.e. outsourcing) that I personally hoped would revive the
shares. I was horribly wrong. No telling what Bill's greed and stupidity will do next to hurt this company.
3) Almost criminally inept IR management. As I've said in previous posts, outsourcing, while lucrative, isn't exactly the
sexiest pitch to investors. It's certainly not the net. Which is why GPW needed strong IR – IR that could get investors as
excited about the outsourcing as y2k. (Kind of like the recent outsourcing section in the Post did. Predictably, GPW wasn't
even mentioned.) As we all know, this type of IR never materialized. Part of it was Bill's fault – he let go the original IR guy
(the same guy who had a part in fuelling the $8 share price and fostered numerous financial relationships for the company.)
Even worse, he
replaced this guy with an amateur. Just check out the last annual report. Horrible. We can only guess at how bad this new
IR guy has been externally whilst wooing institutions. But I believe the consistently thin volume and string of new lows says
it all.
I'm sure there are many more reasons for GPWs demise: a weak sales force, a president who never really came to terms
with what it meant to be public, a board that never delivered on business connections (Otto Jelinek, as you might recall,
was supposed to be a big gun in drumming up European business as the Chairman for Deloitte & Touche for Eastern and
Central Europe. Uh, ya. Whatever.) But for now, let's just say that if you're thinking of investing in this sorry excuse for a
small cap (or any cap, for that matter) - do yourself a favour, keep your money in the bank.
PS Would you believe it? GPW just hit another all time low again yesterday. |
