Gary, the point of comparisons at all, is that you compare *aspects* that are relevant, not all aspects. I compared certain aspects of AMZN and MSFT to NITE, aspects that were relevant.
<<So even though their business model is superior IMO, they do have reliance on these guys abilities to keep retail investors trading.>>
Yawn. The whole point in diversifying your revenue stream, is that you are not relying on any single one. The real profit margin is in institutional trades - and NITE is moving in that direction; NITE is becoming LESS reliant on OLBs, so that point is irrelevant. KP's job was to SELL that vision AHEAD of time, Bezos-style, so that when the OLBs reduced their stream to NITE, this should have been spun as "expected". KP should take lessons from Bezos. Just look at how Bezos spins the negative.
<<But in listening to the Q&A from the CC (did you?), its clear that the analyst community understands NITE's business is not that of an OLB.>>
Umm... how much institutional ownership is there in AMZN vs NITE? And what are the respective valuations of the two stocks? Are you telling me that AMZN has convinced the street as well AS THE INDIVIDUAL investor that their business is a great one, even though if you just looked at the #s, you'd have to pick NITE rahter than AMZN? In that case why can't NITE management do the same job (or better)? Sorry, KP & Co are again outclassed by Bezos & Co. Proof is in the pudding - take AMZN's business performance #, vs NITE, and then look at AMZN share price vs NITE. Case closed.
<<The quick money has largely left the stock now.>>
LOL! LOL! LOL! What a joke! What is "quick money"?? If you mean the money that fuels innovative companies by causing "excessive valuations" - then who cares what you name it, it has been instrumental in financing worthwhile businesses since the dawn of the stock market. If you mean speculative/quick trader type money then why hasn't the same money left countless internet stocks that have hugely greater valuations relative to earnings or any other yardstick compared to NITE. Sorry, the fact that MONEY has left the stock - whether you call it "quick" "slow" or "medium", (I call it "green") - is a tremendous failure to manage the stock by KP & gang. If AMZN and countless others, less worthy than NITE can do it, why can't KP? And as we know, that has direct business consequences.
<<Unique in what way? They aren't just another OLB, but they are just another MM.>>
LOL! And AMZN is just another e-tailer. Somehow the market cap on AMZN manages to dwarf the other e-tailers. What, you want me to write a PR piece describing exactly how NITE is superior to other MMs? That's KP's job - articulating a vision that sells... something he's obviously failed to do. NITE should do the same job on other MMs as AMZN does on other e-tailers - stand out from the crowd. So happens that KP doesn't need to make up stuff - NITE is far-reaching in scope (international etc) and more innovative than any number of rinky-dink MMs. Sorry, but selling the sizzle is KP's job.
<<Again, I think because the stock traded way above its true value at one point, because of a somewhat unique "bubble" in the longer term profit picture, you feel management should have "hyped" in some way to keep the price up somehow.>>
Are you joking or are we in kindergarden? What the hell does this mean: <<the stock traded way above its true value at one point>>? Do you grasp the first thing about the principles of how the stock market works? WHO SAYS it traded above its "true value"??? What is "true value"??? Are you discounting earnigs against bond yields? What valuation models are you employing? If you are using the same measuring stick that applies to a staid non-evolving business model, then we can try to figure out what you mean. But the fact is, that in eruptive business models you cannot use the same valuation methods as in a fixed business model. How do you value a new MSFT - on current earnings, or potential? That is the whole premise behind net stocks (and has been for others in history). It is stupid to say "traded above true value" for an eruptive business, because you have a hard time figuring out what "true value" is. What is CMGI "true value"? Basically it is an incubator for a bunch of net companies. Any one of them can be worth billions, or nothing at all, and you can't really say ahead of time - so what is the "true value"? LOL! The only value is what what the market is willing to pay for it. And KP did an abysmal job of retaining and building that "value", while many other CEOs did a hell of a lot better. A final nail in the coffin of this inane argument: from the horses mouth... KP himself complained that the market is not willing to assign NITE the same p/e ratios as to the OLBs!!! Hey, AMZN and countless others have traded far "above real value" for years (AOL by many's reckoning).
<<you feel management should have "hyped" in some way to keep the price up somehow>>
Yes Virginia, that is exactly what I think. Call it hype, selling the vision, whatever. BTW, I think you are wrong to imply there is something shady or unethical about this. You are wrong. As I explained repeatedly, using salesmanship, or PR skills in building stock value has REAL LIFE BUSINESS consequences. Just think about KP's complaint about the p/e ratios! Exactly. He failed to distinguish NITE from OLBs - in fact he did WORSE than OLBs valuation-wise (p/e multiple). That has been my complaint about him for months now - and the horror that I outlined... if you cannot convince the investment community that you are anything more than "just another MM" or just another finance/brokerage stock, you will get the typical traditional brokerage stock p/e of 18-28 - THE HORROR OF IT!!! If I were an investor, I'd flee right now! That's worse than the OLBs! Exactly the failure of KP and gang. Would I want him, or Bezos to be the guardian of my investnment $ if I had to choose? LOL!
Again, this has business consequences. KP may be a brilliant trader and business organizer, but that is simply not enough. He is the Wozniak of AAPL. NITE needs a Jobs too. Would you let Wozniak run AAPL? Oh Gawd! This has real long-term BUSINESS implications. KP is a miserable guardian of shareholder value - the Kevorkian of investment money. I would never *invest* in NITE with KP at the helm - delegate him to running the business and have someone with vision, like Bezos be the face to the world (and start caring about your shareholders, who are the real key to your success!).
Morgan |
