NeWave has definately turned into NoWave. The company has become barely a ripple at this point in time. Their previously lofty 400% year to year gain on the revenue side from ’03 to ’04 has turned into three steps backward to go one step forward in ’05.
September quarterly results were announced on Tuesday, and the word that comes to mind relative to what we’ve grown to expect is “abominable”. The company delivered $1.77 million in revs for the quarter, down from the $2.4 million it had delivered in the same quarter in ’04.
Adding insult to injury was the refunds and credits number which comes off the top line. It has increased considerably as a percentage of revenues; not a good sign.
As you can see from the chart, the stock sold off in dramatic fashion shortly after the news hit the tape. A few hundred thousand shares caused the stock to crater down to a new low.
While I was expecting some softness in their numbers relative to closing down two subsidiaries that didn’t work out, I will be the first to admit these numbers served as a slap in the face.
On the plus side for shareholders who are taking this on the chin (myself included), the company followed up the next day with positive news concerning October’s performance.
Apparently the company has taken its lumps and is back on the upswing. Onlinesupplier.com generated 5400 new members in October, and at the subsidiary level generated $90,000 in operating profits. The press release made it clear the overall public company wasn’t in the black, but it is promising to see the core business turn cash flow positive for a month. Hopefully, this is the beginning of a trend.
The results of the first couple of test runs of their nationwide infomercial were as expected. The pilot test was designed to give them some idea of how well it would be received. They got about the call volume they were expecting, but are re-editing the infomercial for major nationwide roll out next year. Timing wise, this makes sense.
As far as the future goes, I am not optimistic for price appreciation in the near term. It’s a seasonal issue. Home based business services don’t do very well in the 4th quarter up against the holiday season. Conversely, they do extremely well in the 1st quarter along with gym membership and Weight Watchers as we all tend to go on self improvement kicks just post New Years.
While the worst is probably past, and the price rapidly adjusted to the poor performance, there will no doubt be some tax selling in this issue before year’s end. Therefore, it is hard for me to see price improvement until we get into next year. Then, it will depend on the corporate performance.
However, the stock will no longer trade on potential. Q3 numbers took them out of the “story” category, and it will be a “prove it to me” market from here forward.
Your comments, questions, and complaints are welcome and appreciated. No doubt, there will be many.
I loaded up when it dropped like a bomb, this company has a solid idea to help people that are less than internet savy. When it rolls the infomercial out nationwide, LOOK OUT!!
Editor: I can only hope you are right. The major roll out won’t happen until next year. Holiday season is slow for these kinds of companies.
I am very disappointed in YOU. I have had no winners—only losers with your recos—like the now-abandoned NTDL You forget that you touted NeWave as the secoind coming, almost sure to jnump back close to $2/ Gary Peter Klahr
Editor: that’s simply not true- have you forgotten about XNOM (80%), TREN (triple), and GEPT (250% move), all between June and July. I just haven’t had any winners lately, admittedly so. I’m no different than a major league power hitter in a slump. I’ll come out of it. You are certainly right about those stocks. At least I’m not hiding from the truth and ignoring these comments. You are right.
I hope Newwave isn’t banking it’s come back on the infomercial. IMHO it was the most amatureish one I’ve ever seen and Ewbanks is just terrible. They don’t need to just re-tool it they need to scrp it and start over. After watching just 5 minutes of it I thought that maybe I should just sell and take write off.
Editor: I did not see it because of the last minute schedule change. My DVR was set to the wrong time. They are doing a major retooling and will roll out a very condensed version just after the first of the year.
Greetings and Happy Thanksgiving. I am wondering what it means when a stock has an e on the end that wasn’t there before, for example NWWV is now NWWVE. Thank you! Susan
Editor: I was just made aware of the situation- the “E” means they have filed for an extension to file their financial statements- however, they have already been filed.
What is the meaning of the “E” on NeWave?
Editor: Generally, it signifies they are late with a filing- they have filed their financials, so I don’t know why it is on there- it will probably come off tomorrow- “E” is for extension.
It is awful to be burned with strong recommendations for investment. I should not have listened to you. I lost money on both NWWV and BPTR. You are leading people down the garden path.
Editor: As have I. I’m hoping in six months we will look back at this period in time as a low point, but I can’t say for sure. NWWV has definately disappointed, but BPTR is inexpicable. You do the math yourself and tell me what the company is worth.
My Blogs arent posting, If this appears twice pardon me. Are you planning to hold on to NWWV and BPTR?
Editor: The intro in the newsletter explains that your comments don’t post until I answer them. Your answer- yes- I believe that 2006 is going to be a good year, and both of these stocks will do better. It will be 2 years in Feb, and I have only sold 14,200 shares of NWWV over the entire time. I have not sold one share of BPTR. I am going for home runs on both. So far, I have not been right about long term holds on either one, but I guess that is the definition of long term. Holding through the ups and downs.
If you still like this pig shouldn’t you be backing up the truck? It looks to me that even you have lost faith in this disaster… Obviously there are cheap shares on the market and they are screaming to exit as ASAP. This company has lost almost all it’s credibility. You may need to consider telling everyone to sell and take the loss and drop coverage or please tell me why this is even worth a hold… That was as ugly of a Q i’ve seen in a while… I’m quite sure Dutchess sells everytime they get a chance, which will put a lid on the stock even if good news comes out. NWKI has the same problem, Dutchess sells on spikes and beats it down… All in all not impressed and it looks like we’ve been duped by this pig….
Editor: Thank you for your contribution. I’m pretty sure we will look back on this as a low point in the market for this and a number of other issues, but I could be wrong.
I am sticking it out with you. I have a good feeling.
Editor: I’m not saying I believe it is going to $2 anytime soon- I just believe it will be higher in a few months as corporate performance improves and the market swings in a new direction. The company is past it’s low point, but the stock apparently is not.
Seems to me a good way to look at the stock price at these levels is to think of it as a low cost call option – that doesn’t have an expiration date. After all the business model is still a good one and they don’t seem to be mismanaging the company like AMW-I think ’06 will be a real turning point.
Editor: As I have said, I believe the steps they took over the summer to cut out their failed subsidiaries set them up for the very poor showing in Q3, but was like cancer. Sometimes you have to cut and make the patient temporarily unhealthy to restore long term health. I believe we will look back on this Fall as the low point for the stock, but could have a little more downside from year end tax selling. The key for their long term success- customer retention.
With NeWave at .31 where do you think it will bottom out? .20?
Editor: I wouldn’t be willing to forecast a price, but I would be willing to share a time frame. I believe it will bottom out in December when whatever tax loss selling hits the stock is over. I wouldn ‘t buy it until we are at least 1/2 way through December.
Loading Up tomorrow, riding this Wave all the way….you with me?
Editor: I think it’s a pretty good idea. I own too much to buy more, but wouldn’t consider selling a single share at these prices. As I said before, I expected tax selling on this one, and it is here. Next year there will be some major changes, and the company is actually doing fine. Some positive developments coming as well.
In early 04 this stock split 1:345. Then in early 05 it split 3:1. For 5 months it ground thru low volumn and traded sideways. The last 6 months it has gone from 1.6 to .22. If anyone wants to buy, now would be the time. I myself own it at varying levels but would not touch it untill it at least goes to a buck, or close to a buck. The big question I have is “Who the hell is managing this sick puppy?”
Editor: The ulitmate question: “Are the inmates running the asylum?”- Adults are running this one now. A lot of people have made a lot of money buying at what Sir John Templeton referred to as the “point of maximum pessimism”. High profile case in point over the last few years: Martha Stewart (MSO) at $5 in December of ’02 as she was indicted – it hit $38 earlier this year.
NWWV is acutally healthier than it has ever been. The operating subsidiary generated $90k in excess cash flow in October, and all the perpiheral businesses they started have been shut down and are no longer a cash drain on the company.
It is certainly entitled to rebound to at least $.50 in fairly short order. If you buy it down here for a trade, don’t forget to sell when it rebounds.
Hi, could you please advise me about nwwv shall I buy or sell now, thanks.
Editor: I believe it is more of a buy than a sell. I know the company is doing very well right now. I know for the time being they are cash flow positive and growing very rapidly. I know their customer retention levels are improving. I don’t know when the stock will start trading better. Therefore, if you buy more you have to be long term- your window in time needs to be 1 year plus to give the stock a realistic chance to get going again.