>Howdy
@hoytaedwardo long time no see
Yes, well there is not much debate here anymore, is there? You hardly ever contribute yourself, either. This forum is now just an echo chamber for half a dozen people.
>Yes, I should have written 99% of stock is not for sale today.
I know, I was just taking the opportunity to yank your chain.
>What are your thoughts these days? $17 million is a fair bit of coin.
It is indeed a fair bit of coin, but my view is that the full picture is a bit more revealing than that number.
Consider what has happened in the last 12 months or so. At the end of 2019 they forecast revenue of $15.3m. (December 19 quarterly.) Then the pandemic hit and the world was thrown into chaos, but they did not change their forecast. Then we had the "perfect storm," where millions upon millions of people needed secure networking solutions so they could work from home. Netlinkz boasted how it had got on some preferred suppliers list from the Chinese government, but they did not change their earnings forecast. Then the perfect storm passed, the avalanche of sales failed to materialise and the world's economy slumped. Still no change to earnings forecast. In this, the most uncertain of years, they changed nothing from what they predicted a year ago. How can that be? Clearly, the answer is that they knew at the end of last year that the money was coming. 2020's revenue was pre-determined at the end of 2019.
It is also odd that a company which has based its last decade on a licencing model, with endless resellers selling nothing, has suddenly, in a year, apparently forgotten all about licencing and has talked about little other than infrastructure deals. Given the long commitment to licencing, and the VIN, and the other things shareholders have invested vast amounts of time and money in, you might think an explanation would be forthcoming. Or not. I always said it would not work. Perhaps we now have the tacit admission I was right and they have quietly moved on to another business model, hoping no one would notice their astronomical failure.
Another observation: Netlinkz have no staff. A couple of years back JT said in an interview that the payroll was him and one other. Since then they have made no announcements about recruiting people, other than executives of course. ICT developers are expensive people to hire, yet the Netlinkz accounts show no significant payroll outgoings beyond executive pay. Sites like Glassdoor and LinkedIn show no Netlinkz staff profiles. Money is being sent to subsidiaries, but nowhere near enough to pay even a handful of employees above the executives. So the next question is, who is doing the work? If a company lands $17m of work, but has no staff, how can the work get done? Is JT doing it himself? Does not seem likely.
Next question is how they are managing to make such an enormous loss all the time? The last annual report showed a loss of $23,974,272, which followed last year's loss of $18,509,291, and $14,629,086 the year before that. That is nearly $60m lost in 3 years! Whatever excuses they may spin, and however much you might believe it is all leading to gains in the future, it is clear to any independent observer that something catastrophically bad is happening in the business. Even the vociferously financially acquisitive board has not trousered that lot! Where is it all going?
What scenario explains this? There is only one answer that I think of: maybe iSoftStone wins a contract for, say, a large water plant in China. iSoftStone, for what I am sure was a modest consideration, agree at the end of 2019 to subcontract some of the ICT work for that plant out to their partner Netlinkz. Say, work worth $15m or so. Netlinkz, who do not do this kind of work, and have no staff anyway, clearly can not do the work themselves, so they need to immediately subcontract the work back out again. So they hand it back to iSoftStone.
It is the perfect answer to the observed facts. Netlinkz know a year in advance what their income will be, and even a pandemic will not get in the way of a large, established and funded project. Netlinkz do not actually have any work to do, so the lack of staff is not a problem. A large wad of revenue appears on the accounts, which looks great as long as no one notices it is matched by huge outgoings and no profits. The effect is to prop up the share price, justify boasts of massive revenue increases, and get huge payrises voted through for the board. The only issue is that smart people are not taken in by it and the share price fails to take off, much to the puzzlement of those who do not look past the headline numbers.
As ever, I would welcome a rebuttal, from yourself or anyone else, but I know I will not get one. Merry Christmas Bob, and to anyone else who is not currently lining up a salvo of abuse!
(20min delay)