I'm not asking where is this stock going. I'm trying to figure out Ram's strategy here. IFON has moved away from being a 3rd world cell phone distributor to being an "economy" cell phone producer and distributor. Part of the reasoning for that move, from what I could tell, was because of gross margins. You can make more money selling your own phones rather than someone else's. It appears to me that Ram has done a very good job of minimizing costs while trying to keep R&D active so that IFON releases phones worth considering. The problem is not on the supply side. It appears there simply isn't a robust demand for IFON products. We need aggressive marketing blitzes to sell off old stock rather than push new models. I've lived in Africa and Eastern Europe and what I observed first hand is that at the end of the day people are willing to spend more money than they should on their phone. They're going to buy a Nokia, a Samsung, and iPhone. I don't question the value of IFON products. It just seems to me that there is not a sufficient market for these "value phones" to allow IFON to be profitable and grow. So where is this company going? What does RAM see has possibly changing on either the supply side or demand side that keeps him motivated and dedicated to this project?
Good post. This was not a bad quarter in terms of balance sheet management relative to operations with sales in the 7+M range. However, the issue is where will the needed demand to drive profits come from....as you address. I've seen IFON come back too many times to pronounce the company down on a count of ten. The company is bleeding book value but has the working capital to persist over 20 quarters at this bleed level. The $1.10+ net asset value is virtually all working capital.....so the stock price continues to be a premature reaction, IMO.
If Ram does not see a clear path to profitability in the next 2 to 4 quarters.....no longer, the choice is a simple one.....Liquidate right now.....and get a buck or so per share for the shareholders.