Glad to be back Brett to give you your reality check. I don't drink the Kool Aid anymore. Nor does the market it seems, price down 21% from its mid April high in 2 weeks.
Fact is, management is selling. SCM sold 1.7 million shares, its entire holding - Hmmm... wonder why, if things are going so good? Tsiolis didn't just sell "some stock". He sold half his holding. That's not a trivial proportion. How do you know for sure it was just because he wanted some spending money, or was it because he knew the quarterly was going to be so abysmal.
Wow, I am so excited NET earned $18k revenue for the quarter - and this after 3 years of marketing a cutting edge technology. My barrista makes more than that and she isn't selling to millions and millions of Chinese.
It also worries me that NET has opened a lab in China and China Telecom is doing the R&D. Bye bye the IP. One thing the Chinese have become very good at and that's being tech savvy and expropriating other people's IP. That's why the US is getting tough on IP protection. When even their biggest companies get ripped off, do you really think little old NET is going to be immune?
The coming cap raise signals management doesn't think revenue is going to exceed the burn rate anytime soon. That $3m is enough for just 9 months at current cash burn. Any bets that's the last time they will have to come with hands out? No, didn't think so. And the loan facility is sitting there unused. Hmmm... wonder why? Maybe, just maybe, it's because NET doesn't think it will have the money available to pay it back with the interest.
NET Price at posting:
3.3¢ Sentiment: None Disclosure: Held
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