SOURCE: NewMarket Technology, Inc.

NewMarket Technology, Inc.

December 28, 2009 10:48 ET

NewMarket Technology, Inc. Founder P.M. Verges Contemplates the Small Business Decade, Investment in Africa, High Frequency Trading, and Clooney's "Up In The Air"

DALLAS, TX--(Marketwire - December 28, 2009) - NewMarket Technology, Inc. (PINKSHEETS: NWMT) today announced that CEO and Founder Philip M. Verges has released a personal letter to shareholders discussing his vision for the Company and his continued resolve to see NewMarket deliver a long-term return on investment. The letter, published in its entirety below, includes highlights of the upcoming Virtual Town Hall scheduled for January 22nd and a preview of Town Hall topics.

Dear Fellow Shareholders -

"It was the best of times, it was the worst of times..."

Earlier this year before we had all become more accustomed to living with the symptoms of the global financial crisis, and at the same time still celebrating the first African American leader of the United States at a fever pitch, I published a personal letter to shareholders relating the state of world affairs to Charles Dickens' introduction to his "Tale of Two Cities." At that time, I had already received my American Airlines Executive Platinum status through 2010 for flying over 100,000 miles in the first three months of the year. We have operations in North America, China, Singapore, Latin America and have begun our expansion to East Africa, so I travel extensively. You may remember my commentary on my wife's less than favorable reaction to my premium status with American Airlines. Two weeks ago I received new Executive Platinum cards in the mail for having flown over three million miles total. My wife was not impressed to say the least. To make matters worse, I get a dirty look every time we see an advertisement for the new movie "Up In The Air" starring George Clooney as an American Airlines frequent flyer.

As 2009 and the first decade of the twenty-first century draw to a close, I think Charles Dickens' commentary remains timely. Bankruptcies and unemployment are the norm. After the attack on the World Trade Center over eight years ago, the war in the Middle East is cause for a Nobel Peace Prize winner to authorize a troop increase. Having embraced free trade, Communist China's economy continues to grow in the face of a global financial crisis. Ironically, the United States' economy, the beacon of capitalism, is struggling and the United States Government has become the majority shareholder of one of the world's largest companies -- General Motors. However, when faced by the worst, mankind has historically been at its best. We come together and we rise to action. We fight the neighborhood fire and provide shelter for the displaced neighbor. We revolt against despotism and fight the revolution. We come to the aid of the oppressed nation and fight the world war. We unite against disease and we fight the epidemic. Our collective goal in the face of adversity is to be better -- safer, healthier, and more just. But until our health, welfare and happiness is pushed to discomfort, our resolve remains dormant. I think our collective resolve is hearing a call to duty and I am enthusiastic about the next decade of the twenty-first century and what I believe will be history making advances in global peace and prosperity.

But what about the NewMarket share price? Ok, let's concentrate first on how a contribution to global peace and prosperity can be achieved and create a return on investment for NewMarket shareholders. NewMarket has enabled hundreds of jobs in emerging economic regions that need them and we plan to enable and create thousands more. We are in South America, South East Asia and we are now starting operations in Africa. Every job contributes to an improvement in per capita income and ultimately to a sustaining peace. Improving per capita income is a measure of improving welfare. As the welfare of an emerging market population improves, the corresponding potential for a sustaining peace is enhanced. NewMarket has regularly realized respectable profitability and reasonable sustainability from the operations established within our targeted emerging markets. Our emerging market growth and development has been fostered by shareholder investment. Why has the investment not yet created sustainable long-term returns?

The shareholders of NewMarket are on a journey. Perhaps a longer journey than originally anticipated. The objective destination is a long-term return on investment. The route from investment to return appeared straight forward at the onset, but has turned out to be more complicated than anticipated and resulted in a longer journey. Each of us has joined the journey at different times and has slightly different experiences, but our frustrations are the same. My family and I, with the help of an angel investor, started this journey in 1997. We could not have imagined the course we have encountered, from start-up, to dot-com collapse, to reverse merger, to PIPE investment, to a $1.35 price per share when the revenue was $10 million annually to a $0.07 price per share when the revenue is pushing $100 million annually. As founders, managers and shareholders, we are frustrated but nowhere near resigned. We believe in NewMarket and we believe we can achieve a long-term return on investment.

We had high hopes for our OTCQX strategy to enhance the opportunity for a long-term return, but could not sustain the required minimum share price. I don't think our experience with the OTCQX application process was unique, as the OTCQX is currently revising the required minimum share price. I am a fan of the Pinksheets' effort with the OTCQX and will continue to look for opportunities with the OTCQX. Contemporaneously, with our OTCQX strategy we have also been proceeding with a complementary initiative involving Worldwide Strategies, Inc. (OTCBB: WWSG). The Worldwide initiative remains on track, and we remain optimistic that the Worldwide strategy will substantially improve the opportunity for a long-term return.

The over-the-counter markets, on the surface, appear to present a simple route from initial investment to sustainable long-term return provided the listed company succeeds operationally. If the operation expands profits and shareholder equity, then we expect to see a corresponding share price increase similar to what one would expect from a national exchange listed company. As we get below the surface of the over-the-counter market, we discover share price volatility and share prices that are usually higher or lower than what might be expected in consideration of the related operation. We find that the most actively traded companies on the OTCBB have an average share price of $0.02 and the most actively traded Pinksheets companies have an average share price less than $0.01. In fact, almost 50% of all over-the-counter companies trade at share prices of $0.10 or less and almost 80% of all over-the-counter companies trade at share prices less than $0.50. It is not an easy road to list on the over-the-counter markets and graduate to a national exchange listing.

In spite of the of the fact that the over-the-counter markets have not performed like a mini-New York Stock Exchange as we expected, and in spite of the fact that we have not yet mapped a sure course from investment to long-term return, we are nonetheless confident that the over-the-counter markets provide excellent access to capital for early stage companies and meaningful potential returns for self-directed retail investors. This year we have begun to talk openly about how to best achieve consistent returns from over-the-counter investments, and for next year, we have an initiative underway to further our ongoing presentation on over-the-counter investment strategies. We announced recently the launch of the Small Equity Initiative, a not-for-profit organization dedicated to improving the investment market for small and early stage companies and the return on investment opportunity for those that support small and early stage companies. Look for a detailed introduction to the Small Equity Initiative at our January 22nd Virtual Town Hall.

The over-the-counter markets are made up primarily of early stage and small companies. A large majority of early stage and small companies statistically do not achieve sustainable operational viability within three years of starting operations. Accordingly, a long-term investment is a risk proposition. However, most early stage companies will have multiple milestone successes within the first three years. An early stage or small company listed on the over-the-counter market can experience a corresponding and substantial increase in share price in conjunction with the achievement of a milestone success. However, a milestone success is not necessarily a success that translates into sustainable operational success and similarly, the milestone increase in share price is also not likely to translate into a sustainable increase in share price. The Small Equity Initiative intends to further the study of over-the-counter performance trends and provide entrepreneurial education on leveraging the over-the-counter markets to fund early stage business plans in addition to providing self-directed retail investor education on improving investment strategies to better realize consistent returns through milestone investing.

We firmly believe that expanding the understanding of milestone investing and further communicating that understanding can meaningfully improve the over-the-counter market for both issuers and investors. Market trends are always changing for both over-the-counter markets and national exchange markets. For instance, high frequency automated trading is an increasing factor on market performance. High frequency algorithms trade on share price and trading dynamics, but the operational performance of the traded company is not taken into consideration within the programming of the high frequency algorithm. The proliferation of high frequency trading could influence a separation of operational and share price performance for national exchange listed companies similar to the separation over-the-counter listed companies already experience. As we continue in our journey to ultimately achieve a long-term return on investment, we will contribute our lessons learned along the way to the Small Equity Initiative so that a milestone investment strategy can be continually enhanced and a repeatable long-term investment strategy can be mapped.

NewMarket was founded in the height of the dot-com market. The dot-com market was rich with frequent IPOs of technology companies raising large sums of money for big ideas, with little current traction in terms of revenue. After the dot-com market collapsed, "hedging" against the risk of investment became the new Wall Street fad. The "hedging" arguably became more profitable than the investment, and Wall Street certainly went looking for riskier and riskier investments, ostensibly to have more to "hedge" against. We are all suffering the aftermath of a nearly decade-long hedge-worthy investment frenzy trend. Following the dot-com and the hedge frenzy, the question is now, "What's next?"

I suggest that the next decade of the 21st century will be the small business investment decade. Small business is more agile, and the increasing speed of business, market and economic changes requires more and more agility. In my opinion, brand name companies would be prudent to assemble and continuously reassemble networks of task organized small businesses to deliver on time sensitive and often short cycle market opportunities.

The small businesses with the highest growth potential will likely be those concentrating on emerging markets that need everything but can't absorb everything at a rate that would be required to sustain a pre-existing large company. The greatest growth potential for the foreseeable future is in the emerging markets where roads and utilities need to be expanded and improved and the consumer market is virgin territory.

The only obstacle hindering emerging market growth is lack of emerging market investment. The emerging market growth potential is ready to be empowered with investment. The challenges in realizing small business emerging market investment momentum are fragmentation and perceived political risk. Investment brokers want to work with large sums of money because the current compensation model is driven by commissions based on the sum of money under management. A lot of small businesses require only a little money and while a large sum of money could feasibly be organized to invest in a lot of small companies, until recently, a number of easier ways to make a living still existed for investment brokers. The effort to organize investments in many emerging small businesses may seem more attractive now that the "hedge" opportunity isn't what it used to be. As for political risk, I say poppycock. The number of organizations around the world such as the World Bank, willing to provide guarantees on emerging market investment mitigates emerging market risk to a level comparable to investment in a developed market. Political risk may have existed decades ago, but today is an excuse offered by institutional investors to say don't bother me with that cumbersome emerging market stuff or as an excuse to questions regarding socially responsible investing.

I am enthusiastic about the next decade of the twenty-first century and what I believe will be history making advances in global peace and prosperity. I think Wall Street needs a new market to replace its dot-com and subsequent hedge markets. The emerging markets need everything, and fulfilling everything results in high growth. The factors previously fueling Wall Street's resistance to emerging market investment may no longer seem so burdensome. With investment and growth in emerging markets, per capita income increases follow. Improved per capita income and the corresponding improvement in human welfare contribute to the potential for sustaining peace. By continuing on our journey at NewMarket and improving the milestone return potential while advancing toward a sustainable long-term return, we can share our lessons learned with other self-directed retail investors and entrepreneurs. Our experience at NewMarket can be of value to all self-directed retail investors and entrepreneurs and contribute to small business growth and returns to investors both domestically and abroad. Our endeavor to create milestone and long-term returns for NewMarket shareholders is a great place to start in making a larger contribution to the next decade. Hopefully, in addition to providing an emerging market small business investment road map, our journey might even be an inspiration to other self-directed retail investors and entrepreneurs.

The founders and managers of NewMarket wish all of you a Happy New Year. We are enthusiastic about 2010 and the next decade of growth for NewMarket. We look forward to sharing our plan for 2010 and the next decade, to include some dramatic changes, at the upcoming Virtual Town Hall.

Best Regards,
Philip Verges
NewMarket Technology Founder and CEO

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About NewMarket Technology, Inc. (

NewMarket is a reporting company with audited financial reports filed with the SEC. NewMarket provides systems integration, technology infrastructure services and emerging technology worldwide. NewMarket has a focus on providing technology and support services to rapidly growing economies where technology purchasing is on the rise. In addition to its base of operations in North America, NewMarket has operations today in the growing economies of China, Southeast Asia, Brazil and Northern Latin America. Last year the Company reported over $40 million in revenue from Asia and over $20 million in revenue from Latin America. Overall, NewMarket reported over $95 million in revenue for 2008.

Across the globe, NewMarket is a Microsoft and Oracle partner, distributes various computer hardware and peripherals from brand partners such as Dell, HP, IBM, Cisco, Sony, Epson, Canon and Sanyo and is also an authorized reseller of operating systems and various software from companies such as Red Hat, Sybase, IBM, BEA, Veritas and others. Additionally, the Company works with emerging technologies such as mobile computing, various security and wireless broadband technologies.

NewMarket's rapid growth since 2002 has placed the Company on the Deloitte Technology Fast 500 for 5 consecutive years. NewMarket was recognized as the third fastest growing technology company in the United States in 2006 and the number one fastest growing technology company in North Texas for two years in a row.


This press release contains forward-looking statements that involve risks and uncertainties. The statements in this release are forward-looking statements that are made pursuant to safe harbor provision of the Private Securities Litigation Reform Act of 1995. Actual results, events and performance could vary materially from those contemplated by these forward-looking statements. These statements involve known and unknown risks and uncertainties, which may cause NewMarket's actual results in future periods to differ materially from results expressed or implied by forward-looking statements. These risks and uncertainties include, among other things, product demand and market competition. You should independently investigate and fully understand all risks before making investment decisions.

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