Future not so bright, admits Packet 8,

4 Comments

They are bleeding money and perhaps its time to sell? But who will buy them?

4 Comments

Craig Poschmann

Well, it might be inherent that most firms publish nothing but doom and gloom to avoid class actio but, i can tell you…as a long time shareholder of 8×8, the guys running this company should go looking for jobs elsewhere. Perhaps in middle management at IBM. Because, time and time again they have been proven to be abysmal failures – especially, 100%, when it comes to moving any type of product. If i had a dime for every cutting edge product 8×8 came out with and didnt sell, i’d be rich.

Thomas Hirsch

Excellent post, Jake. All firms include lengthy gloom-and-doom statements covering just about any conceivable eventuality in order to keep the totally unethical and slimy class-action law firms from filing a lawsuit based on some triviality. 8X8 says it has sufficient funds for at least the next 12 months, which is fine — most firms say no more. There are a couple not very bright bloggers who have made too much of this. They should stick to accumulating freebies and stop trying to do serious analysis.

Jake

What a scoop from Russ!

The Risk Factors Russ has highlighted are essentially boilerplate in any SEC 10-Q filing for a company that is losing money. These statements are intentionally gloom-and-doom – wouldn’t want to accidently hype the company to an investor. When you first stumble across this in one your investments, it is an Oh-No moment, but you need context to understand it.

The Risk Factors section changes ever-so-slightly for a company that is making money. Take Yahoo for instance. Their most recent 10-Q filed at http://www.sec.gov/Archives/edgar/data/1011006/000110465905036846/a05-14285_110q.htm shows a company that produced $112M in net cash in their latest quarter. Their risk factors are outlined in pages 32-43 of that 10-Q. Sounds like the roof could cave in at any moment.

I’m not saying that 8×8 shouldn’t be out shopping themselves around or that they will be able to grow out of their problems. I’m just saying that this information is not the smoking gun.

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