Hey Brian Thanks for your post. Some thoughts on our thesis and...

Hey Brian

Thanks for your post. Some thoughts on our thesis and how we missed a 55% long run in 7 days.

1 - We dont think the 1PG product works. This is the beginning of our thesis. We dont think it has the cut through to get traction, dont think the revenue model is there and the weight of competition so big and deep (there are scores of players doing this) that this will not fly.

2 - We do think thought its a momentum trade. Which means we're not betting on a company but its buyers. We can see a great deal of exuberant enthusiasm for this stock. But when we pull the string the drivers of this enthusiasm are at best weak.

3 - But then you look at these two great up swings in recent buying. Are we wrong? Is this stock actually going to work? Do we reset a disciplined investment thesis? Do we switch from high conviction bears to high conviction bulls? (and this wont be the first time we've done this). These are the questions we've been asking ourselves. And a great place to start with momentum is alway price and volume.

4 - Looking at this we see the first big buy spurt was between the 6th and 7th August, the second on 11th and 12th August. These are two very non-typical (for this stock) buying spurts and both pushed the stock out of a consolidation and decline. We are always concerned when we see this kind of action. In particular the great buying on the 6th and 7th arrested a calamitous drop that would have seen this stock fall below $2.

5 - No news came out. No competitor imploded. No technical limits were hit. No stops (as far as we can see) were hunted. Yet one or many people decided that in the middle of a fall off a cliff from Aug 3rd to Aug 6th this stock needed pushing back up,

6 - And then on the 11th when the stock began again to decline this force for the long side came back and pushed this stock almost 22% in a day.

You know what?

We'll stick to our thesis.

Laters!