Ann: Shareholder update , page-5

Hi Septic1,

Thanks for directing me over to look at IPX.

I skimmed through from listing in 2007 and felt like I had read this story before (I hadn't). This plot seems to be repeated so many times in the market - goes something like "IPO's late in the financial year with big growth forecasts over prior and then goes on to announce they have been exceeded. Usually some acquisitions somewhere in the process of listing or shortly after. With FY out of the way, the company proceeds to crash and burn to a fraction of the IPO price. Writes off intangibles, re-strengthens the balance sheet with new equity and then starts to make a comeback..." .

At this point, the company is frequently a good buy, just for the recovery. However, while some return to former profitability and give an easy 100-300% gain, others just muddle along with ups and downs undermining investor interest for years.

I like to see:
* Straight-up communication
* Harsh accounting treatment
* Change of management

Plus all the usual bits about balance sheet and funding.

After reading through IPX, I didn't feel like all the pieces were quite there. On the other hand, they didn't seem like a total "avoid" either. They are definitely interesting on financial metrics in that the price has been so written down that a return to just half the NPAT they reported after listing would give a reasonable chance at 100%. And given revenue hasn't been run down too hard, this is not unrealistic.

Unless a single large investor decided to take an interest, I would think this would take at least another 5 months to start moving as investors rebuild confidence and some profit targets start to crystallise. Maybe. It depends a lot on how much guidance the company gives and how regularly they repeat it...

I'll put it on watch.