DALLAS, TX--(Marketwire - November 25, 2009) - NewMarket Technology, Inc. (
PINKSHEETS:
NWMT)
today announced that CEO and Founder Philip Verges has released a letter to
shareholders addressing recent shareholder questions and discussing the
improving potential for a short-term and long-term return on investment.
The letter is included in its entirety below:
Dear Shareholders-
NewMarket Technology has recently posted financial results through the
first nine months of 2009 that I believe demonstrate endurance, resilience
and ongoing potential. The Company has weathered a global financial crisis
and rebounded to meet revenue figures equal to pre-crisis performance.
Operating margins from the Company's emerging market operations are on the
rise with record net income through the first nine months of the year
reported in China. Nevertheless, share price performance does not reflect
a company with approximately $100 million in profitable annual revenue and
more the $30 million in shareholder equity. A number of shareholders have
emailed questions regarding the share price discrepancy and some have
emailed their own suggested explanations for the share price discrepancy.
I do not believe an easy answer exists. Regardless of the current share
price, I believe NewMarket has the potential to deliver a compelling
short-term and long-term return on investment.
Increased Trading Volume
Even though the share price has decreased, the average daily trading volume
is becoming more consistent and generally increasing. Some
over-the-counter securities do not have trading activity on a daily basis,
or the trading activity is erratic with a few shares traded one day with a
comparative monumental increase in trading volume on the next day. It may
seem logical that as a share price increases reflecting an apparent
increasing demand for the shares of a particular company, that the trading
volume would likewise increase. However, the NewMarket share price has
recently decreased, apparently demonstrating a decreased demand for the
Company's common stock, and instead of seeing an anticipated corresponding
decrease in trading volume, we have seen more consistent daily trading
volume and a general increase. When share prices decrease, we often
receive shareholder inquiries as to "Who is doing all the selling?" We can
only speculate as to the source of sales or purchases of stock. However,
few ever seem to speculate in regard to the source of purchases when a
share price is declining. There cannot be any sales without corresponding
purchases. If shareholders are selling in reaction to a perceived
reduction in value, why is some other party buying?
Shareholder Profits from Periodic Increases in Share Price
Included regularly within the Company's communications is the message that
we believe an ongoing disconnect exists between the underlying fundamental
financial performance of over-the-counter quoted companies and the
corresponding price per share. To offset the disconnect, we regularly
discuss the idea of supplementing a long-term investment strategy with
small, short horizon stock purchases to enable profit taking when the share
price periodically increases in reaction to a milestone success. We
emphasize "small" because trading volume might not be sufficient to enable
the liquidation of a large investment when the share price experiences a
periodic peak.
Long-Term Returns from Long-Term Sustainable Operational Success
In our communications we characterize long-term return on investment
potential as a function of operational success, not share price
performance. We discuss our belief that long-term share price appreciation
of
over-the-counter quoted securities is unlikely. We believe long-term
return on investment is absolutely possible, but will more likely be
realized directly from the operation rather than from trading of stock.
For instance, cash received from the future potential sale of an operation
might be issued in a dividend to shareholders.
Long-Term Potential is Strong and Continues to Improve
A long-term return on investment requires a Company to achieve sustainable
viability. NewMarket's resilience through a global financial crisis is a
good demonstration of such sustainable viability. NewMarket's business
strategy emphasizes a concentration on emerging markets, and the Company's
recent successes in emerging markets bode well for NewMarket's future. The
Company's Chief Financial Officer discusses NewMarket's financial
performance in more detail in a recent on-demand Webcast. A link to the
on-demand Webcast is available on the corporate website homepage
www.newmarkettechnology.com and is titled 'NewMarket 3rd Quarter Review
Webcast.' Having achieved reasonable sustainability and the corresponding
potential to deliver a long-term return on investment, management is
implementing a plan to begin delivering a return to long-term investors.
The plan has been detailed in previous communications and will be further
detailed as next steps in the plan are executed. The next anticipated step
would be the first public filing necessary to proceed with a dividend
distribution.
Over-the-Counter Share Price Volatility and Potential for Dramatic Returns
The over-the-counter markets are well-known for share price volatility.
The price of over-the-counter securities can go up and down dramatically in
terms of percentage change. Stock priced in the pennies can more easily
double than one priced in the dollars, creating an opportunity for a penny
stock investment to deliver a dramatic return as high as 100% and sometimes
even higher. The share price can similarly go the other way. It is not
unusual for such share prices to go up and down repeatedly. As mentioned
above, there cannot be a sale of stock without a corresponding purchase.
Even when the share price is declining, some party is purchasing the stock
at a declining share price. Accordingly, it is reasonable to conclude that
money is being made on one side of the transaction or the other whenever
the share price is increasing or decreasing.
NewMarket Technology Return Potential on the Horizon
Since the Company's recapitalization at the end of July, the share price
has seen periodic increases as well as periodic decreases. The trading
volume has been inconsistent until recently. Again, we can only speculate
as to the cause for the most recent decrease. Regardless of the reason for
the decrease, the Company has posted a positive financial report in
addition to communicating potential upcoming milestone events that have a
likelihood of occurring before the end of the year. With improving trading
consistency, I believe the opportunity to profit from periodic increases in
share price resulting from positive market reactions to milestone success
is getting better. I believe NewMarket has the potential to experience a
milestone driven rise in share price with respectable trading volume before
the end of the year with repeated milestone ROI opportunities throughout
2010.
Small Equity Initiative
I and others here are dedicated to improving the opportunity for
self-directed retail investors to profit from
over-the-counter investments and for entrepreneurs to gain better access to
capital for their business plans. Our first initiative is to improve the
collective understanding by investors and entrepreneurs as to how the
over-the-counter market really works. It is our position that conventional
efficient market wisdom is flawed when it comes to the over-the-counter
markets. We nevertheless firmly believe the over-the-counter markets can
deliver compelling returns for investors and be a consistent source of
investment capital for entrepreneurs if approached from the right
perspective. We will continue to provide shareholder communications
similar to this one in our ongoing effort to improve the collective
understanding as to how the over-the-counter market really works. We have
also taken part in launching a not-for-profit organization called the Small
Equity Initiative to further the long-term improvement of the
over-the-counter markets for self-directed retail investors and
entrepreneurs. Look for more news on the Small Equity Initiative in the
near future.
Best Regards,
Philip Verges
NewMarket Technology Founder and CEO
Sign Up to Receive Regular NewMarket Updates
NewMarket sends regular Company updates to its opt-in, permission-based
email database. Interested investors can easily, safely and quickly
register to receive these communications directly on the corporate website
homepage (
www.newmarkettechnology.com). Recipients can manage their own
email contact profile and safely unsubscribe at any time.
About NewMarket Technology, Inc. (
www.newmarkettechnology.com)
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.
"SAFE HARBOR STATEMENT" UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995
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.
Contact Information: Contact:
NewMarket Technology, Inc.
Investor Relations
214-722-3065