SOURCE: NewMarket Technology, Inc.

NewMarket Technology, Inc.

November 25, 2009 10:46 ET

NewMarket Technology, Inc. Releases Milestone Return on Investment Update and Long-Term Return on Investment Overview in Letter to Shareholders

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

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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