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

To: Carl R. who wrote (2695)	8/14/2000 8:58:52 AM
From: rupert1	Read Replies (1) \| Respond to of 2908

Carl: I understand all your points, which are well-made. I have become accustomed to statements like "You also seem to want to blame the fall on the secondary." and "you....rely on the fact that NETP keeps saying that they are not dependent on etailers and assume that because they say it, the market believes it" and "You believe that the fall in the stock was solely caused by the lack of PR,..." on and on. Perhaps I should stop trying to illustrate the subtleties with reference to facts and figures and join you in selective statistical comparison and what you call "belief". I for one would have been unwilling to pay as much as I did pay for the stock if they hadn't done the SPO. My impression from your last post is that you bought and sold at $41 before the SPO "on the way up". So it was irrelevant. I assume you bought again at $16 (and sold some at $19) after the SPO. I understand your point - but it suggests to me that your original purchase of NETP relied a lot on your expectations of a bubble and even your second purchase relied on the disappointed expectation of a revival in the internut sector even after it had crashed. It also reinforces the impression that fundamentally you do not have very much trust in NETP's capability of raising whatever capital it would need to bring it to profitability in the unlikely event that its pre-SPO funds would not have been enough. I have more "faith" in its business model and performance to date than that - and I have given the factual basis of that "belief". If NETP in 2000 earning $55 million in sales, with projected sales of $100-150 millions in 2001, could not raise $30-$40-$50 million or whatever it was you thought it needed to insure profitability - how did NETP in 1995-1999 ever raise the money it did when it was not much more than a R&D programme with a few pilot applications? It seems to be that one of the implications of your position is that if NETP had not had its SPO it would have had to have been bought out. So, by different routes, we may have come to a similar conclusion. In any case this strand of the debate is "what if". Should you argue that NETP needed the $100 million it raised to give you and other investors the comfort of an unecessary cash cushion, then you should look again. The purpose of the SPO, as stated in the documents , was not primarily to give you comfort of this sort, it was primarily to raise funds that could then be spent on buying technolgoy or other companies. As this debate continues - it appears that you are much more influenced by what you think market sentiment is going to be than by what you think earnings are going to be. That is one way to make money on the market. I think we all try to guess at market sentiment and build it into our investment decisions. But it is guesswork and cannot be disguised as a science by reference to TA or statistics. I know you also believe that a consideraton of the fundamentals should be used as an anchor. You are right that our debate is wandering into area of opinion and judgement that are not verifiable. You attempt to support yours by selective statistical correlations. I support mine by deductions drawn from historical fact about NETP. Your last point did try to push my position into an extreme which it does not have. I can assure you I pay as much attention to market sentiment as the next man (or woman). I guess, too. But I have a long position and a trading position. Fundamental analysis predominates - but is not exclusive - in the former - and guesswork in the latter. In reply to your question about my predictions. I have said ever since I started to comment in April 1999 that I think NETP is more likely to be taken over than not. This is not a wish, it is a rational expectation based on my understanding that it is a niche player - even if the niche can be broadened. If it remains independent, I would guess at an end of January price of $35-40, but I allow the possibility that between now and then it might have touched $60. I think it will surpass $60 sometime in 2001 probably before May. There are simply too many unknown factors which may affect the price between now and January. NETP is volatile not only because of the so-called "internut" fashions you rely on, but also because it has a very small free float. These are some of the factors that could cause it to spike up (I am sure the factors that could cause it to spike down will be well represented by others). Takeover speculation. A series of BUY recommendations by new analysts covering the stock. Buy recommendations by media gurus. A Fall and Winter rally. A return of confidence in the internet economy especially as e-commerce sales increase sharply in the run-up to Christmas. A burst of growth from the ASP products or one or more partners - such as ORCL. Blowout 3Q numbers (although I do not expect this). Blowout 4Q numbers (more likely). New products such as the Personalization Manager which is scheduled for 4Q release. NETP buying another company. If NETP does get a spike up over $40 I think VC's and some institutions will sell into it and long-term holders will simply have to wait until the price builds support levels - as in the case of other stocks. That's why I think longs should also have a trading position, so they can take advantage of the volatility and pay for their long position in this way. However, it is hazardous. Feel free to respond to this and correct any inaccurate representations, but I have used up my time on this topic.