Here is the ONE reason why I think you are wrong. Their product is obviously nowhere close to as good as they seem to think. Everytime they come out with something new, they hype it as the next great smart grid product. Then nobody buys it. Remember the special press conference announcing Ecos? How many of those did we sell? Today they have announced another "revolutionary" product. My guess is that they will sell as many of these as they did the Ecos nodes, the Holley meters, and the ELO meters. There is a reason why the "worlds leading network platform provider" has declining revenues and increasing losses.
Don't be stupid. Nobody buys a company that is losing money and shrinking revenue. This spike is temporary while the day traders try to make a nickel a share. Once reality sets in, it will drift back to 2 where it belongs. If they can find a company run by someone as stupid as Sege, then perhaps they can sucker them into a buyout. Then again, any company run by someone as stupid as Sege will be on the brink of bankruptcy and in no position to buy a tank of gas, much less this company.
First they would ask what his sales are for the past 3 years, and when they saw how badly they are declining, there would be a gasp, followed by snickering. Then when they asked about profits, and discovered the company has had one profitable year in the 20 year history of the company thanks to one big contract, you would hear 'IM OUT!" 5 times in a row. But, I'm sure a public company like Siemens, Honeywell, Google, Yahoo, or any of the others mentioned here would love to present their shareholders with millions in annual debt along with shrinking revenues. Yeah, that's going to happen. I realize the people running Echelon don't understand the concept of shareholder value, but sadly those companies do understand, and that's why this stock will be back to $2 or less within 6 months, once reality sets in. But I do encourage all day traders to play it for a quick small profit, because as you can see by the chart, once interest dies down, it will go back to flat line mode.
Investing 101 teaches us to never fall in love with a stock. At one point, my shares were up 300% and I didn't sell a single share. A smart investor would have been long gone and on to the next investment. I never made that mistake before and I will never make it again.
Phil, this is worse than drugs, it's a case of a total lack of business knowledge. This accumulation very well could be insiders who know about a pending contract announcement, but I promise you it has nothing to do with a buyout. Anyone who really believes Echelon is a good buyout candidate with the balance sheet that they have simply does not understand valuation.
I won't waste time trying to explain it to you. I will only tell you and anyone else who thinks Echelon will be offered a buyout BEFORE they show fiscal profitability that you are in for a long wait and a big disappointment. As a shareholder, I would love nothing more than to see someone offer a billion dollars for this company. It would be the happiest day in my very long relationship with this miserable company. But I know better, so I am hoping that people with inside knowledge are buying in anticipation of a contract announcement. At least that will improve their chances of someday actually becoming profitable. If they are able to show actual sales in China and Brazil, they might reach profitability in a couple of years, and then the big boys might come courting.
Phil, this spike is one of two things. Either word has leaked of an impending contract, which will be known publicly within 30 days or less. Or, speculators jumped in when Echelon was mentioned in relation to the Google buyout, and those people will sell and move on when no buyout offer comes within 30-60 days.
Oh, I remember ENEL quite well. In fact, did you know that they have relied on the 150 million dollars from that deal to fund the business for the last 12 years? If not for that one major deal, we wouldn't even be talking about Echelon because they would have gone under a long time ago. Are you aware that Enel only uses Echelon for spare parts now? I wonder why they use someone else? I assume you are familiar with the Duke deal in Ohio? Do you wonder why Duke cancelled their Indiana project and has not used Echelon again since the Ohio project? Do you remember the press conference, when an analyst asked Sege why Duke cancelled their order for the EcoS nodes? He stumbled around for a while before trying to say that it was actually Echelon who decided to focus their efforts in Europe, where demand was stronger. That was the day all smart investors got out of Echelon, as you can see by the chart. So, if you think you know more about this company than me, bring it on. I have been following Echelon since 1999.
yeah, cause companies always offer a 200% premium over the current price. :0
Well, since there are about 42 thousand shares short, I would say it might make more sense to say "Sleep well Short", since one small investor could own the entire short position. You either know nothing about shorting or you just didn't bother to look at the short interest, because Echelon is where it is due to shrinking revenues and growing losses.
You just don't get it, do you? Some analyst says Echelon MIGHT get bought for $5-$10 and speculators pour into the stock. That makes you think a secret buyer is driving up the very stock they plan to buy? Educate yourself before you put your money at risk. A company that wants to buy another company doesn't buy stock in the open market. All it does is make the offering price go up. In fact, if there was an interested party, this run will only cause them to back off until the speculators are gone and the stock drifts back down to where it belongs. There is no buyer. This is investors trying to get in ahead of a possible buyout. There very well might be a fund manager putting his or her 2014 risk capital into Echelon. Let's face it, the downside is limited now that they are so low, and any major contract at all could return 50% or more from here. But, contrary to what some of you may think, this is a HIGH RISK investment.
Here is a decade worth of education in one post. This company began as a software company, and they were light years ahead of anyone else. They had a working relationship with a hardware company that made electric meters. They sold 27 million of these "smart meters" before companies like GE and Itron even knew what a 'smart meter" was. Then, the meter manufacturer ran into production issues so Echelon decided to buy the manufacturer and become a hardware/software meter company. That was the fatal mistake that Then CEO Ken Oshman made. His arrogance was his downfall. He went around telling anyone who would listen how superior Echelon meters were to GE, Itron, Badger, and the rest. Once the other manufacturers saw the future potential of smart meters, they turned their focus and money to smart meter technology. Oshman had awakened the sleeping Gorillas. If you are CEO of a utility company and you have used GE or Itron meters since Thomas Edison lit the first bulb, who are you going to buy your new meter from? GE, a name you know and trust, or some tiny company called Echelon that you never heard of? Fast forward to the present, and Echelon is now back to trying to get other manufacturers to use their software. Had Oshman simply approached the CEOs of every major meter manufacturer with this amazing software that could transform each dumb meter into a smart meter for a price of $10 per unit, the gorillas would have gladly paid an extra $10 instead of creating an entire division dedicated to catching up with the technology. Echelon would have become the intel of the smart meter industry. and because they were so far ahead of anyone else, it would have been impossible for a start up like Silver springs to penetrate the market with any real share. So, as a new investor, you are here at a good time because anyone who has been here more than a couple of years is in at prices twice the current price or more. You can take a small position here and put in stop losses.
Take about 60 seconds out of your day to check the short position in ELON. Then tell me about all the shorts out there who are keeping the price down.
Just because an analyst says someone might buy them out, how does that equate to a buyout? The only thing that analyst statement proves is that the company that the analyst works for probably had a financial stake in seeing the stock go up. I will make you a deal. If someone actually tenders an offer for Echelon BEFORE they sign contracts that will lead to profitability, I will come here and apologize for being so clueless, and if no buyout offers come this quarter, next quarter, or the quarter after that, you come here and tell me how smart I am. Trust me, the only way a company will take on Echelon is AFTER contracts have been signed that show future profitability. I'm not saying Echelon has to report earnings that show a profit, they have to have signed deals that will lead to profitability. then a well run company with resources can actually GROW profits year over year. No successful company wants to take a business that is failing and try to turn it around unless they can get it out of bankruptcy for pennies on the dollar. Since Echelon is nowhere close to bankruptcy, this will continue to be a short term traders dream, taking advantage of each rumor that drives up the price, then waiting for it to come back down so they can do it all over again.
Can you name me ONE example of a publicly traded company paying a premium over the current market price for a company losing millions of dollars a year?
they are doing about 90 million in revenue, and I believe they need to do about 140 mil to break even. In order to get an offer of $20 per share, they will need to show approximately 40 mil in annual profit. Since costs increase along with an increase in revenue, Echelon will have to be doing over 200 million in annual revenue while keeping their profit margins steady before any sane company offers them $20. We used to fantasize about getting 25% of the 300 million meters in China, so I suppose we could play that game again. But, if we are going to live in reality, Sege is praying that they get 5% of the market at $10 per meter, which equals about 150 in total revenue in China. Divide that by about 5 years to roll out, and the BEST CASE SCENARIO in China is 30 million in additional annual revenue. That still leaves them a long way from profitability, and that 5% market share is wishful thinking. Welcome to reality.
I was keeping it simple by using 2013 revenue numbers. If you want to project 2014, revenues are projected to be as much as 20% lower. maybe that's why Sege came up with the 110 mil break even figure. So, instead of 90 mil, they do 75 mil,, and it will still take a 5 year China rollout capturing 5% of the market just to get into the ballpark of breakeven.