About UTK
UTK was added to my watch list yesterday after an over 30% drop in one day solely due to an analysis report from http://sharesleuth.com/.
A long story short - UTK business model is to acquire technology from university/lab at a low cost, and transfers to companies (usually micro-size/start-up) in exchange of the shares from them.
The report challenges the background of those companies as well as the valuation of the shares.
Here is my opinion.
The report is biased, to begin with. The author shorted 75,000 shares before the report was published. To be fair, he does disclose his position in the report. To be precise, "biased" doesn't mean the report provides inaccurate information (I have no idea the level of accuracy in the report), however, it could filter and only provide the information he wants you to hear.
Furthermore, I wasn't surprised that some of their partners has questionable background, or has a questionable business. However, I don't think that shall be the reason to sell the stock, here is why.
By the nature of their business model, they mainly deal with micro-size company - Pick Sheet, Over the counter, or start-up. Very few investors buy those stocks in anticipation of 10% - 15% annual returns - instead, it is either 100% loss, or huge gains. This indeed, makes UTK's model more attractive - it diversifies the portfolio by making deals with a lots of those companies, and allow a reasonable portion of those companies to fail eventually.
So, if you believe in their business model, the real question is do they have a competent management team with good judgement, execute deals in good faith, each and every time?
To that question, I don't have a answer.
My friend Jaewoo's blog has a few updates on the subject. Worth reading if you are interested.
A long story short - UTK business model is to acquire technology from university/lab at a low cost, and transfers to companies (usually micro-size/start-up) in exchange of the shares from them.
The report challenges the background of those companies as well as the valuation of the shares.
Here is my opinion.
The report is biased, to begin with. The author shorted 75,000 shares before the report was published. To be fair, he does disclose his position in the report. To be precise, "biased" doesn't mean the report provides inaccurate information (I have no idea the level of accuracy in the report), however, it could filter and only provide the information he wants you to hear.
Furthermore, I wasn't surprised that some of their partners has questionable background, or has a questionable business. However, I don't think that shall be the reason to sell the stock, here is why.
By the nature of their business model, they mainly deal with micro-size company - Pick Sheet, Over the counter, or start-up. Very few investors buy those stocks in anticipation of 10% - 15% annual returns - instead, it is either 100% loss, or huge gains. This indeed, makes UTK's model more attractive - it diversifies the portfolio by making deals with a lots of those companies, and allow a reasonable portion of those companies to fail eventually.
So, if you believe in their business model, the real question is do they have a competent management team with good judgement, execute deals in good faith, each and every time?
To that question, I don't have a answer.
My friend Jaewoo's blog has a few updates on the subject. Worth reading if you are interested.
posted by Siyu LI at
1:15 AM
3 Comments:
Nice site. A Korean friend of mine in San Jose sent me your blogs link. It's a small world :) Do you have a page where you keep track of your picks? The last stock/performance review i could find was for June 2006.
By
Anonymous, at October 29, 2006 2:30 PM
Thanks for visiting.
2 months ago, I started to fully disclose my long-term investment activities in this blog right after the purchase.
So, come and vist the site, you will see all the picks. Also, share your thoughts, and most importantly, introduce yourself next time!
By
Siyu LI, at October 29, 2006 8:41 PM
You mentioned that you have UTK on your watchlist, but you didnt mention at what price it would be attractive to you.
Acetrader seems to have bought at todays level. when are you planning to jump in, if at all?
Sam
By
Anonymous, at November 04, 2006 3:39 AM
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