I sold out today for the following reasons:
1) Prior to bringing this thing public the executives were getting about $90k a year in base compensation. On Dec 4th they filed an 8-k with their new comp structure where everyone is receiving $200k+ salaries. I understand that you need to pay money to retain top people but I would have liked to see them actually generate some revenue prior to boosting their salaries 100%+, and this doesn't even take into account any equity compensation.
2) The prepared remarks in the conference call were awful. To me, it revealed that they don't actually have a realized market for this product. Many on the board say that this is just a "misunderstanding" In reality though, they get a chance to communicate like this only 4 times a year so I will assume they got their talking points correct and I will take their comments at face value.
3) The Q&A on the conference call was ok, but it was management basically agreeing with the analysts in very general terms that at some point in the future they may recognize revenue from their technology if a potential customer doesn't have a viable alternative available to them internally or otherwise and it will work with their design and development timeline.
4) This really makes it hard for me to understand why this company would not get bought out if the opportunity is so valuable. The buyer could integrate their new technology into their design process and have this working exclusively for them. My guess is that this is no where near as far along as it appears to be and the only ones willing to take this risk are us folks who bought this company up to about $16/share, not the companies that truly understand the tech.
Hope the co has a bright future but i think this is going back to around its IPO price, maybe it will be worth the risk around then.
draw a line at $25 over the past few weeks on the chart. The share price doesn't move from there and if it does it moves right back. Someone is dumping hard at $25 and above is my only guess. Refiners rallied today, except for NTI. :\
I don't think they said swks rejected their design outright but they didn't think it was a fit for them at least now. I do agree with cashflow that they will be doing another offering so they can pay the bills, as long as they can find enough people to throw their shares at for a product that isn't proven.
I don't know the specifics of MTDR but it looks like the company made / is making money. CEOs can pay themselves as much as they want as long as they can fund it. What gets me is when they do a share offering so we can pay their salaries then they miss the milestone with the customer. Tie more of it to equity i don't care, it's dilutive, but at least we all would win together. My holdings don't include many development stage companies but they do include SWKS, which has done quite well. That's how i first found out about this company.
If you want to make the argument a bit more reasonable why not take ESPR. I was in them from about 40-65. It is a development stage biotech company (I realize there are distinct differences between the industries). They've done at least 2 secondary offerings since I started following them and they haven't made a penny. The secondaries really have not had an impact on their share price and their officers get paid more than RESN's. This company has also hit every one of their milestones for their cholesterol drug and are being rewarded for it.
I didn't mind paying for success, and neither does the rest of the market when there appears to be a product that is proven with known customers and management that delivers. Maybe RESN will be there too but they need to be valued appropriately. Would you be happy if RESN had to do another offering to pay SG&A and dev costs at this point?
It's also interesting that there has been no equity investment in the company by any development partner. Even OPBL, which was a fraud, got NYMEX involved about 7 years ago.