Interesting viewpoint "take off or go to a big zero". And unique to this (the software) business. Representative of the challenges all investors face in this sector when looking for a product-oriented company to invest in.
The basic problem is that uWInk must make an investment up front in order to hope for a return down the road. This is extremely risky. Many technology companies prefer to simply rent out there people (do consulting work). They make a nice fat margin with minimum overhead.
The main problem in this business is estimation. Ever asked a programmer how long it will take to write a piece of code? Ever get an accurate answer? I have moved into Engineering (bricks and mortar) businesses and have found a refreshing change. The companies I work for now can say with near certainty what their income will be next year, and can manage development or deployment.
uWink is typical in that the people running the place must do everything in the large. Large salaries, lots of hype, etc. If they were a restaurant company living within their income they would be a great business. It is unfortunate that they are not. They will pull in roughly 3-4M a year on those restaurants. If they were able to exist within that framework, I would say they make a hell of an investment...
The problem faced by the investor is what are they really worth? Who knows? Who can say? Even when a deal is announced, you can usually et a sense of how it affects the financials based on the dollar value of the deal. Because of the lack of this information it is doubly difficult to assess their potential.
In light of that, I suggest the best thing to do is to go with the current trend until the financial situation resolves itself, which will be mid-Nov, when the next financials are released.
Until then, Stockman, let me modify your statement "this will either take off or go to a lower value in mid-Dec.. possible mid-Oct". About as good as you are going to get it. Can't go to zero unless they are completely out to lunch and can't pay their people, or the ST debt people come and take the furniture. Then there will be no place to sit!
