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NetWork Installation (OTC BB: NWKI) 2 for 1 Split Paying Off

The OTC Journal has been covering NetWork Installation since August of 2003. We started at $.80 (split adjusted: $.40). The stock rocketed to $6 in four trading days.

NWKI then pulled back to a pre split level of about $3, and slowly worked its way to a high of $5.50 by the end of April. Unless you bought the stock at the all time high of $6, it was a big win until the market sold off in May and June.

The stock took a pretty good beating from the beginning of May until this past week. The attack was two fold. High oil prices and geopolitical concerns drove the entire market down in May and June. In addition, NWKI did a private placement of 745,000 shares at a pre split price of $3. From that point on, there was excess supply anytime the stock poked its nose above $3 ($1.50 today).

I always felt the company had extraordinary growth potential, and I have not been disappointed. They are intimately involved in the burgeoning infrastructure build out of wireless internet access. Every time you see a "Hot Spot", think of NWKI. 

In August of '03 NWKI had one office in Irvine, CA and a customer base which read like a Who's Who of the California Public School System, municipalities, and major corporations.

Fast forward 13 months: they now have opened regional offices in Phoenix, Las Vegas, Sacramento, Seattle, and acquired Del Mar Sytems in San Diego. They intend to have a nationwide footprint by the end of 2005. June quarterly revenues were up 43% from the March qtr, and 133% over the June qtr in '03. 

I expect the company to continue to generate losses into 2005 as they continue funding expansion.

This past Monday, NetWork Installation completed a 2 for 1 split. The symbol changed from NWIS to NWKI. In conjunction, there has been a major paradigm shift in the trading pattern of the stock. This week it finally broke out above what has been significant resistance.
 

Persistence Breaks Down Resistance

You are looking at a chart of NWKI over the past two months. The stock has been trying to break out of its trading range since the beginning of July. As you can see from the blue circles on the chart, each time the stock reached the $1.50 ($3 pre split) level, it was repelled. It butted up against that level four times in the past two months, only to retreat after each effort.

It is no coincidence that $1.50 was the ceiling for the stock. This was the exact level of the private placement. It was done prior to the big drop in the market, so it appears those investors were content to break even and hold warrants that convert at $2.50.

In conjunction with the 2 for 1 split earlier this week, the stock finally broke above the $1.50 level on the fifth attempt. Technically speaking, this implies the supply of stock from the private placement has been absorbed by the market, and the stock could be poised to head towards its previous high of a now split adjusted $2.75 over the next thirty days.

NWKI came out with another press release after the close today. The company recently landed $100,000 in installation contracts in two school systems- one in Northern California and one in Southern California.

This comes on the heels of numerous new business awards over the summer which include VoIP installations in New Mexico and Seattle, and telecom projects in Las Vegas, San Diego, Irvine, and Arizona.

For shareholders who have been patiently biding their time in this stock- your break out has come. I believe higher levels are now imminent. For those who don't have a position, the company now looks great both fundamentally and technically.

Here is the complete text of today's press release for your review:
 

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