ONE opened the week at $2.23 per share and ended 20% lower – at $1.78. At the same time, the turnover was almost three times the average.
The company has practically not issued any major developments this year. The lack of information makes it very hard to explain the current share price performance.
Probably, the recent downfall is resultant from shorters’ activity. It might be also due to the fact that Communique is overestimated on the TSE. The present market cap of the company is $106M, while the net worth of the company is only $4.6M according to the latest financial data.
Perhaps, investors have very high expectations about 01 Communique and have overvalued the company. These expectations, however, do not seem to be supported by the company’s fundamentals.
01 Communique presently has two ongoing and outstanding litigation matters against LogMeIn and Citrix Systems Inc. They both concern alleged breaches of the company’s patented intellectual property.
As 01 Communique admits, “in order to ultimately generate future profitable operations, the Company is heavily dependent on the successful outcome of its patent litigation against Citrix and LogMeIn and an unsuccessful result could materially adversely affect the Company’s business and financial prospects”.
Certainly, there is not much we can say here. If a company’s future depends on the outcome of its lawsuits against two other firms, then little further comment is needed.
Still, 01 Communique has several positive factors on its side. The company’s financial condition is not perfect, but looks stable enough. At the end of 2010, Communique had $4.87M in cash – 428% more than one year before that.
At the current cash-burn rate, this money probably would be sufficient for more than 2.5 years ahead. Besides, the revenue for the quarter ended Oct. 31, 2010, was $164K – an increase of 133% over the corresponding figure in 2009.
Technically speaking, during last session a high wave was formed. This candlestick implies that there is huge indecision in the market.
