management purchases

I can understand why investors think that management are firm believers in NBS as management have been willing to put their own money into the stock. However we need to look at their previous track record.

On 24/8/2009 Johann Young announced that he had just bought 500,000 shares (ave price 45c). He then anounced on 3/10/2009 that he had bought a further 250,000 shares (ave price 39.5c). Unfortunately 4 weeks later he announced the delay in the Malaysian contract.

On 10/3/2010 Johann Young announced that he had bought another 2,000,000 shares (ave price 14.8c). Now he has anounced (10/6/2010) that he had bought a further 2,000,000 shares (ave price 8.35c).

While we can't doubt his enthusiasm for the stock, we know that anyone who has followed him into the stock has lost a lot of money. So while the share price may rally from here, it won't be sustained until they announce either revival of the earlier contracts or signing of a new "paying" contract. It is really quite simple, either they get a paying customer soon or they will need another cash injection. Hence buying NBS shares before any contract announcement is not investing, it is punting.

The other concern I have with Johann is that after the last two NBS results he did not come to Australia to face up to investors. The only time he has come in last 12 months is when he wanted/needed to raise money.