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Technology Stocks : Net Perceptions, Inc. (NETP) -- Ignore unavailable to you. Want to Upgrade?

To: Carl R. who wrote (2530)	7/23/2000 7:16:01 PM
From: rupert1	Read Replies (1) \| Respond to of 2908

Carl R: Your case is very tortuous, however sincerely held. Bottom line is you want to defend NETP from the charge that it has been more unsuccessful promoting and supporting its share price than comparable companies. Your defence is that PR is hype. Hype is bad because over a period of time a company cannnot live up to it. Those companies that have been more successful than NETP will get their come-uppance. I think this is a series of non-sequiturs rather than an argument. In the first place PR is not hype. So bang goes your premise. In the second place, if the PR is truthful and the company comes to be known, understood and appreciated by a larger circle in the market, there is no reason in the world why this state of affairs would cause its share price to fall in the future. Finally, if PR is hype why is NETP out there now on road shows, and analysts meetings? You then go on to concede that a strong share price helps growth by providing currency for acquisitions. But since NETP does not have a strong share price - you say acquisitions can be bad, too! But you still congratulate NETP for raisng money in an SPO so that it can, after all, do acquisitions. What kind of acquisitions do you imagine NETP doing with the about $60 million of the £120 million it could afford to spend without raising questions about cash reserves. For example if it were to do no another acquisition like KD1 which was dilutive of earnings, but to do it with cash instead of shares - not that it could afford to pay the $124 million it paid for KD1 - it would suddenly need a larger reserve of cash to stop the market becoming concerned about what such an acquisition would do to the date of profitability and to the burn rate. NETP lost $280 million in market cap within a day or two of announcing the SPO: it then lost another $280 million the week after. What acquisition for $60 million would make up this lost $560 millions in market cap? Subsequently, as a result of the market crash NETP lost another billion. But the SPO caused technical weakness that exacerbated the effect of the crash. NETP dropped more severely than the companies which you say were overvalued through hype. It never bounced as strongly after the crash as they did. And NETP never went as high in the first place, which is something you seem to think was a good thing. The main beneficiaries of the SPO have been the insiders who got over $600,000 when they sold at $42. Apparently, they dont agree with your defintion of the share price. Snyder and one other actually withdrew half their shares on the grounds that a price in the $40's was not high enough. I dont agree with your general assumptions about what makes an appropriate price based on sales and growth. But why quibble over formula. The fact is that NETP was grossly undervalued by whatever formula you use for most of last year. It started to do better in the last two months of the year when Harmon and Briefing com did some unpaid PR for it - but never came closer to 400% lower than the other companies you mentioned. EPNY is now about 7x higher in price than NETP with only about 50% better revenues.