mrbuick:
NPLI got its money from those who participated in its IPO. It is no longer affected by the price of its stock.
The price of its stock is certainly of great interest to its shareholders, but swings in their stock price have *nothing* to do with the amount of cash they have on hand, nor the immediate-term viability of their business.
I don't know if NPLI has positive book value; I never read their SEC filings. So I'll make up an example to illustrate my point.
Suppose company XYZ is $100M in debt. It's losing money daily. It goes public and sells 10,000,000 shares at $20 apiece to investors who believe the story. It now has $200M in the bank. It could shut its doors, pay off its debts, and have $100M left over, or $10/share to give to its shareholders.
Suppose the market panicked one day and sold XYZ down to $1.00 per share. How much money would XYZ have in the bank then?
The same $100M.
Someone could buy the entire company for just $10M, and discover they had a pile of cash worth $100M. Would you say that "XYZ iz doomed cuz there stok iz fallin to $1 buck!" or "WOW! XYZ iz a screaming buy!"
I'm not saying NPLI is a buy or a sell - merely using my mythical XYZ as an example to point out that the price of a company's stock has *no* bearing on what the company's shares are actually *worth*, nor does it have any immediate bearing on a company's ability to continue to do business.
Is it a reflection of what market participants *think* the company will be worth *someday*? Yes. But investors are people, and people make mistakes.
Did people make a mistake in buying NPLI? Were they paying too much for it two days ago? Are they offering too little for it now?
I don't know how to answer those questions. But people who *do* know how to answer those questions, not just for one company, but for many companies, make millions of dollars a year. They're called research analysts and fund managers.
