Netstore Share Discussion Threads

[jewelsy] 17/2/2002 09:54

A closer look reveals that they were buys........No small fry either. Always a good sign when the directors are buying shares in their own company. Lets hope it gives the market the courage to invest in Netstore. I feel very confident. Their future looks very bright, especially as they managed to buy £18.5mln worth of business for £1.5mln. I can't find one piece of detrimental reporting for this company......Perhaps I'm wrong...The drop in prices seemed to coincide with Redrock ex-employees selling their shares........I shall still be in there, when the shares rise, as Netstore establishes its position with its new aqusitions.

[supervisor] 16/2/2002 00:15

What makes you think they are sells.?

[irresponsible] 15/2/2002 14:59

Good question. Mostly because it seems that as soon as I buy into one of these small tech companies, the share price collapses because some big institution is dumping stock. The price hasn't fallen, which is a good sign.

[irresponsible] 15/2/2002 11:48

Has anyone noticed today's trades - I was going to buy but it looks like there is a big sell going through.

[jewelsy] 16/1/2002 14:53

Is this a good time to buy or will they be dropping futher?

Jewelsy

[jewelsy] 09/1/2002 11:49

Thanks for the confirmation on share sales. I did think this could be the reason. Lets all hope that Netstore can now 'strut its stuff' and make us all some money.

[warranty] 07/1/2002 21:19

Though not a holder I've watched this share for some time. By many accounts there is huge earnings potential but I was surprised to see such a large drop in share price today.

Can't see any adverse news to account for it unless anybody can shed some light on something I've missed.

Could be a good buying opportunity I suppose.

[jewelsy] 07/1/2002 13:48

Thanks for the quick response. I don't think QSP customers have an alternative other than netstore now but perhaps I'm misguided. Maybe with the management changes that netstore made, they are better equipped to steer the ASP venture. Could be I am just dreaming or simply hoping. Still I shall hold onto my shares for the foreseeable future and keep my fingers crossed.

[whyme99] 07/1/2002 13:30

Although RedRock appears to be a logical purchase for NES, there appears to be little synergy with QSP customers Let's not forget, Netstore are not a true multi-application ASP. They are a shrink wrap service provider, and as such, it appears that the QSP business may well outside NES's field of experience and expertise. Netstore dropped out of the custom ASP market a long time ago to concentrate on well developed "off the shelf" products, and they may have wasted £900k last month. I hope not. Now we are waiting to see what they can do with the goldmine that is RedRock.

[jewelsy] 07/1/2002 13:15

As netstore are using their assets to acquire new companies, ie. Redrock and QSP's ASP, why are their shares plummeting? From information gathered about Netstore ,I understand that they have positioned themselves in a market with guaranteed customers for the next few years worth £millions. Surely this should be increasing share prices not reducing them. Any ideas??

[media trader] 21/8/2001 13:24

Merrill Lynch reiterates “Accumulate221; (21/8) – whatever that means in today’s ambiguous analyst language! (Oops, perhaps I’m getting too cynical)

“NETSTORE: New Management, New Focus” research note dated 20/8 available free to download at www.multexinvestor.co.uk

[mr ashley james] 16/8/2001 19:58

Energyi,

I think when mc was £11.93m, so 13.50p mid, need to look at contract notes, but approx 14p was our price.

Do you agree chart looks ok?

Cheers

Ash

[energyi] 16/8/2001 19:49

Nice move today.
Did you get some, Ashley? If so, what price?

[mr ashley james] 16/8/2001 19:15

Tywocky,

You were ever the sceptic, worth reading RNS out today and the 28.60% rise in shareprice as the market results were better than expected, looks like I indeed bought £25.08m worth of cash for a whole lot less.

Best regards

Ashley

[mr ashley james] 07/8/2001 14:40

Hello,

Is there anybody out there holding NES?

Up 4% on 83k volume so far.

Cheers

Ashley

[mr ashley james] 23/7/2001 23:26

Anybody have any idea why mms marking price down of late?

Marked down 0.25p on very low volume 17k approx.

Is anyone else on board with NES?

Cheers

Ashley

[mr ashley james] 19/7/2001 20:53

Courtney,

I guess three i will just have to go in there and fire a few of the most highly paid directors, reduce salaries overall of board, and fire around 60% of the 350 staff!

Pretty simple really.

Cheers

Ashley

[cheading] 19/7/2001 18:09

Ashley

Enjoyed your logic as ever. But unlocking the money may not be so easy. Two Directors own over 28% between them (and one is currently away on holiday for a month, clearly been a stressful period). 3i own 25%, and RBOS and Barclays have around 6% each.

Running in and taking the cash may not be easy when many jobs would be on the line. Nettec also has a lot more cash than cap, don't times change.

cheading

[mr ashley james] 18/7/2001 18:10

Harry,

I guess that is what they want us to think, after 35.70% drop, I personally think a lot of bad news factored into the price, cash in the end is cash, if you could buy and access £25m of cash for £11.93m, what would you do?

Who says Netstore have to continue doing what NES currently do?

Who says cash outflow needs to stay at £600k pcm?

Who says NES need to keep current salary and staffing levels?

Everything in life can, and IMHO does change, indeed share seems to be currently holding 14p/13p offer/bid, there is a lot of pessimism factored in already!

It is conceivable IMHO that fair value could be 28.30p, ok just cash!

Someone will be taking axe to a £600k pcm cash burn, and not before time IMHO.

Cheers

Ashley

[mr ashley james] 18/7/2001 00:26

Argy,

The answer is I do not have a crystal ball so I do not know, but unless I am reading this wrong, this is my view for what that is worth:-

(1)"The current rate of cash outflow is on average less than #0.6 million per month and is continuing to reduce as revenues build and management continues to control costs."

If they have £25m cash, and are currently burning £600k, and cash outflow reducing, I assumed £25m/£600k is 41.66 months, or 3.47 years approx cash, not bad for a TMT stock I thought.

Another way of looking at it if they have £25m, spending £600k per calendar month, market cap £11.93m per ADVFN (NB this will not be fully diluted I guess), the difference is £13.07m, which at £600k pcm would last 21.78 months or 1.81 years in theory before in effect the price you pay, ie market cap, assuming ADVFN figures, is reached, ie in theory I reckoned you could hold for up to April 2003 before you were in theory breaking even waiting a recovery, on current trading/cash outflow etc.

(2)There in theory must be several VCT companies or stronger cos ie Resource stocks (ref Bruce Rowan on Viking Internet) who would in theory I would have thought be interested in buying cash for less than cash, ie possibly changing business out of TMT and putting it into a sector better liked by the market.


If so, and at least this is a penny stock, with quite serious trades of late, it may get a bounce short term, as sheds says, or may be a takeover target medium term.

Who know's? It is IMHO a gamble!

BOL

Cheers

Ashley

[harrykewill] 17/7/2001 14:54

Analysis

--------------------------------------------------------------------------------

Netstore shares collapse as ASP market disappoints
Tuesday 17 Jul 2001
But aggressive cost managment means the business is still on track in terms of cash flow

--------------------------------------------------------------------------------

Revenue in current year to meet expectations
Operating losses to be less than expected thanks to aggressive cost cutting
Management aiming for cash flow breakeven as soon as possible
Long term sales forecasts slashed

What once seemed a massive market has turned out to be much smaller, at least for now. Just as Baltimore found with internet security, so NetStore is finding out with ASP.

Demand for ASP services is growing at a much slower rate than expected, and rather than optimistically predicting a rapid uptake in coming years, analysts are now playing safe and have dramatically cut their forecasts. Netstore's house broker, Dresdner Kleinwort Wasserstein, has slashed its 2002 revenue forecast from Ѓ13.3m to Ѓ6.1m and its 2003 forecast from Ѓ30.6m to Ѓ13.3m. Its EBITDA forecast for 2002 has improved from a Ѓ6.4m loss to a Ѓ5.5m loss, although its 2003 EBITDA forecast has been cut from a Ѓ2.6m profit to a Ѓ3m loss. The broker says positive cash flow will be achieved between 2002 and 2003, with the company's cash pile reaching a low of Ѓ17.3m.

Great expectations once surrounded the ASP industry, with figureheads like Bill Gates and Larry Ellison predicting the majority of software applications will be delivered in this way by the end of the decade. The benefits are obvious: it makes sense to outsource the running of software applications to a third party that can employ economies of scale by running them centrally on behalf of many customers. This reduces the need for in-house IT support, makes sophisticated services like disaster recovery more affordable, and includes regular upgrades to the latest technology with no effort by the user.

Unfortunately, this message hasn't got through in time to save a great may ASP start-ups, mainly in the US, from falling into bankruptcy. But in the background, the ASP model is making steady progress as the market evolves. Although the original theory was that companies would adopt the ASP model for business process software like customer relationship management systems, NetStore has found the humble e-mail to be its killer application.

The problem with that is that companies are used to regarding email as a service that, once installed, is as good as free. They are loathe to pay for enhanced service. Although logic dictates the ASP offering should be more attractive to smaller businesses, who can least afford to have dedicated in-house IT departments, Netstore says it is the larger companies who are proving more receptive. Large companies with better in house accounting are more receptive to 'real cost' arguments.

If the ASP model is gradually adopted in the corporate IT market, Netstore is well positioned to be one of the winners. The shares are now trading at a large discount to the company's cash value, and considering brokers still predict positive cash flow at the end of next year, that seems unjustified. For the foreseeable future, however, with sentiment heavily against this type of stock and the company itself tearing up future demand predictions, it's hard to see the shares staging much of a recovery.

[shedloads.com] 17/7/2001 13:45

Ash

Cashburn £600000 a month the fire will be out of fuel soon, trade any bounce and make a very smart exit imho this company is on the road to the poorhouse.

Shedloads

[energyi] 17/7/2001 13:08

Ashley,
Here's the part that worries me:
"The proportion of recurring service revenues were lower than anticipated ...significant revenue in the quarter was accelerated out of
deferred revenue balances as a result of the review of our strategic
partnerships."

I'm not entirely certain what this means, but I think they are
saying that the got a ONE TIME JUMP IN REVENUES from accelerating
reveune due from partnerships. This suggests that they may have trouble
repeating the "better than expected" performance. It would be helpful
to see the detail.

Have you looked at their website?

[shedloads.com] 17/7/2001 11:22

Give it a miss Ash. Does Not look good you might get a bit of a deadcat though.

Shedloads