RE:RE:RE:what a trip
TobySheen7 wrote: I just sold majority of my position at $29 today. Judging from all the founders, management and majority of board members selling $39m of their holdings right before they went into blackout at the end of the year and the CFO selling almost all of his holdings at around $22, it tells me that the Q4 results are not going to be that great. I was also reading the anlayst reports, and they're also not expecting any growth (actually they're expecting the Q4 to be weaker than last year and the year to just end little over $100m of revenue, which is shrink from last year). The revenue is on a gross basis and they have on average 50% margin. So on a net revenue basis of $50m, the current market cap is $1.5B. 30x net revenue? That doesn't make a lot of sense. I think with the management selling at $6 and then between $17 and $22, I would say they agree too.
Looks like there is a lot of emotional buying happening right now, so I would be cautious about buying at these prices.
Yes they should be trading at least 30 times net revenue which is still less than the industry heavyweights. Earlier in the year, I had targeted a share price to be around $30-$40 and we already reached that target. One thing to keep in mind is that their business model is mostly a fixed cost structure with about 10% being variable. For every incremental increase in sales, the majority of that net revenue flows to the bottom line. With that being said,I think there is fundamental support here at $30 and we go higher from here.