On my Om
On Technology & Change
They are bleeding money and perhaps its time to sell? But who will buy them?
What a scoop from Russ!
The Risk Factors Russ has highlighted are essentially boilerplate in any SEC 10-Q filing for a company that is losing money. These statements are intentionally gloom-and-doom – wouldn’t want to accidently hype the company to an investor. When you first stumble across this in one your investments, it is an Oh-No moment, but you need context to understand it.
The Risk Factors section changes ever-so-slightly for a company that is making money. Take Yahoo for instance. Their most recent 10-Q filed at http://www.sec.gov/Archives/edgar/data/1011006/000110465905036846/a05-14285_110q.htm shows a company that produced $112M in net cash in their latest quarter. Their risk factors are outlined in pages 32-43 of that 10-Q. Sounds like the roof could cave in at any moment.
I’m not saying that 8×8 shouldn’t be out shopping themselves around or that they will be able to grow out of their problems. I’m just saying that this information is not the smoking gun.
They should have used Gips. No kidding.
Excellent post, Jake. All firms include lengthy gloom-and-doom statements covering just about any conceivable eventuality in order to keep the totally unethical and slimy class-action law firms from filing a lawsuit based on some triviality. 8X8 says it has sufficient funds for at least the next 12 months, which is fine — most firms say no more. There are a couple not very bright bloggers who have made too much of this. They should stick to accumulating freebies and stop trying to do serious analysis.
Well, it might be inherent that most firms publish nothing but doom and gloom to avoid class actio but, i can tell you…as a long time shareholder of 8×8, the guys running this company should go looking for jobs elsewhere. Perhaps in middle management at IBM. Because, time and time again they have been proven to be abysmal failures – especially, 100%, when it comes to moving any type of product. If i had a dime for every cutting edge product 8×8 came out with and didnt sell, i’d be rich.
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