I was looking at the company and I think I know why this is. Management just sold intangible assets to raise cash equal to $1.99 a share, which it’s now 1.93 a share. They did this to pursue a different business model. Although it seems to be working brilliantly, until they generate positive earnings or their earnings potential becomes obvious to Wall Street, then investors in theory will wait until the new business model is proven, and the price will remain valued at $1.93 (unless other people see their earnings potential as well and push the price higher)

Here is the catch 22. If you had known ahead of time that they would raise that much cash, then you could have bought the stock at a steal under 50 cents. This could also mean their other intangible assets make the company worth much more, since they are not reported on the balance sheet. If you wait until positive earnings are generated, then you can miss the boat again. It seems like they are well on their way. So I am going to continue to hold. That is a boat I do not want to miss.

Mr. Gur said on the Q2 earnings call that he did not want to go to Wall Street, until he has profitability, and that is a very smart move on his part. However when that does happen, this stock will have likely already moved up much higher in price. So again, it may be a good hold, on the speculation that this will continue to work for them. Based on the laundry list of new deals they keep on making, that push revenue up past a 30% increase on a quarterly basis with gross margins in the 60% plus range, it’s probably a very good bet that it will.

I do have stock in this company, and will continue to hold in the mean time.