Versatile Systems Inc VVVFF

RE: Management has to get the Versatile name

[dwothers]

No kidding, it seems to be lost on some that a company should actually make money and this company has failed to show that it can make money. They gave the appearance of earnings with tax benefit accounting magic, but all they seem to do issue new equity to cover costs. There was no evidence of improving margin because of new products in that last financial report. They are supposed to have a 40% margin, so what happened? Did they have to reduce the price to actually make sales? They don't break their financial reports down enough to tell. If they can't improve their margin they will never make any money.

This is the same complaint that has been posted over and over again for the last 10 years. Just for information purposes... Versatile has over the years hired a number of IR companies to promote the story. Unfortunately it always comes back to the financials... lumpiness of revenues lack of earnings visability etc. but really it still boils down to one thing for the large funds. By virtue of the fact that a fund always takes a large position when they invest they are loath to take on a company that returns less then 10% on equity. The reason is simple... they can achieve that level of return safely through more conventional means. When they do take a position it is very necessarily for the long term since they can't readily dispose of a large number of shares in a short time (as evidenced by Laurus). Hence they can't play the market like traders but are rather locked into the steady growth performance of a stock... unfortunately microcaps like Versatile seldom fill that definition. Only rarely does a compelling enough story come along that will intice fund managers... and Versatiles story though good isn't yet compelling.