Internap Network Services (INAP)

mysoftballcoach (31.02) Submitted: 5/08/08 12:34 PM : Start Price: $4.50 INAP Score: -17.61

INAP management continues to engorge themselves with company stock and dilute away any and all potential profits.

A quick look at the revenue picture:

March 31, 08 = 62,053

Dec 31, 07 = $61,636......+0.7%

March 31, 07 = $53,534.....+15.9%

Now a look at stock based compensation

March 31, 08 = $2,375

Dec 31, 07 = $2,043......+16.25%

March 31, 07 = $1,625.....+46.15%

Does anyone else see the GROSS disconnect here? Comparing the current quarter to the December quarter, Revenues were up a paltry 7/10's of 1 percent yet management increased their stock based compensation by 16.25 percent.

How about comparing the current quarter to the year ago quarter. Revenues were up a handy 15.9 percent, but stock based compensation was up a WHOPPING 46.15%.

Are you FREAKING KIDDING ME???!!!!

You should read the 3 paragraph disclaimer/explanation management gives in the Press Release (http://biz.yahoo.com/bw/080507/20080507006372.html?.v=1) regarding the benefits of excluding stock based compensation as a measure of the company. Honestly, I am thankful they show the results both ways, because I believe it absolutely HIGHLIGHTS how management continues to drain any potential investment value out of the company.

This conversation could be taken to the "What's wrong with Corporate America" level or why we have the "Shrinking Middle Class". The top 5 or 10 executives are taking all of the profits. Middle class investors can't invest in this company because the executives are seeing to it there will never be a return on the investment.

This is not a commentary on socialism. Trust me. I've owned my own business for over 15 years. I'm all for being rewarded for performance. The difference is, I didn't take my company public and stick my hand in the public investor cash till. Therefore, what I earn I keep. These guys did take their company public and took all they could from the till. Now they owe it to their investors to treat the investors fairly. The investors should be reaping some reward. As Steve Martin used to say in his hey day, "But NOOOOOOOOOOOOOO...". These guys took from the public till initially and now view it as their own private ATM.

A 46.15% increase in stock based compensation? This has got to be bordering on criminal. Certainly unethical. Interesting that Americans complain about price gouging at the gas pump, or anything else when there is short supply. Isn't this essentially the same thing? Although one is gouging consumers, this is gouging investors.

When to invest in INAP? NEVER! If you want to invest in content delivery pick AKAM.

Good Luck and Play to Win.

Coach
http://www.mysoftballcoach.com/streams-of-income.html

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