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. (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
ir@newmarkettechnology.com