The institutions are selling. They misgauged the margins in the business. The reason I am confident of this is because if you listened to the last conference call a couple of analysts sounded confused about margins and asked for clarification on download economics. It's clear that the business is not what they expected. Then Rob came out with an NYC tour trying to differentiate the sub model, which actually makes sense. The problem is that Real's biz model continually changes so they have these legacy business lines that are declining while the music business ramps. Lastly, some analyst asked what lessons they learned from putting the player on 300MM pcs and not making any money, and Rob responded that he thought that was a successful strategy. I think everyone agrees that while the numbers of RealPlayers are interesting, there still isn't a clear, defendable economic model as of this point. Additionally, if you back MLB.com, subs growth isn't meeting market expectations, holding constant at about 1MM. This brings up the old question of churn, which the company refuses to deal with in a clear manner.
And then the guys steering it give the wheel a crank and up it goes 28% or something.
It's a trading platform, and is played as such.
Let me repeat: when you talk about the stock and its price and movements, and then you talk about the company, you are talking about two different entities that share a short fuzzy boundary.
That's what you really need to know about RNWK, and then hop aboard. There's still lots of guesswork and possibilities for losing in the short term, but there is one truth: if it falls down, it eventually goes up. It's been doing that spectacularly for the past 2 years, and remains at about the same price at this moment. But check out the swings inbetween.
I agree with you. A stock like this, all you have to do is look to see if it has enough cash to make it another few quarters, but rnwk has more than enough and their cash burn is not so much. Debt is low.
This one can definately be traded. I just wonder what the bottom will be.