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Is Somebody Interested In Net Talk.Com, Inc. (OTCMKTS:NTLK) Patents?

Is Somebody Interested In Net Talk.Com, Inc. (OTCMKTS:NTLK) Patents?
Written by
Jarrod Wesson
Published on
March 12, 2018
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Market sentiments on Net Talk.Com, Inc. (OTCMKTS:NTLK) strengthened recently after market participants commenced wondering what's going to be the next move of the company after magicJack VocalTec Ltd (NASDAQ:CALL) lawsuit was "dismissed with prejudice." That's not all. In our view, market expectations are high after CALL, which is a direct competitor of NTLK, signed a merger agreement in 2017. NetTalk ezLink - Net Talk.Com, Inc. OTCMKTS:NTLKThe share price has risen by 200% (from $.01 to $.03) over a period of one month. During this period, its traded volumes have also risen to nearly 10 million. Have a look at the most recent share price action in the following stock chart: YTD chart for Net Talk.Com, Inc. OTCMKTS:NTLKWith the stock reading at the $.02 candle, a close above the $.03 mark could be followed by movements to the 52-week highs of $.05. On the downside, a close below the $.02 mark will indicate that market sentiments are weakening. The stock price could decline to the $.01 mark. However, taking into account the recent announcements of NTLK, downside movements are not likely.BusinessNET TALK.COM, INC. is a telecommunications company, which provides and sells residential telecommunication services, including services utilizing voice over internet protocol technology, session initiation protocol technology, wireless fidelity technology, and other similar technologies.The following are the flagship products:- Analog telephone adapters: they provide cost-effective solutions for individuals requiring connections for analog telephones for home or office. The main device is the DUO, which provides one USB port, one Ethernet port, one analog telephone port, and a WiFi interface.- Advanced calling features: the company offers several options; call forwarding, caller ID, 3-way calling, call holding, call retrieval, and call transfer.In addition, the most interesting is that the company is able to connect users to the company's global communications network through their DUO devices and CONNECT mobile apps, which ring simultaneously when a call is received. What about pricing? The solution is sold as an ultra-low-cost service with just one bill once a year. Pricing - Net Talk.Com, Inc. OTCMKTS:NTLKWe encourage readers to explore the site of the company and do further due diligence on the products provided. Additionally, there is a lot of feedback provided by other clients on the Amazon website. It is very important to check it too. We have seen that the products have received a very good rating. Clients mostly appreciate the software, while the customer service is the weak point of the company.PatentsNTLK is not a new entrant in the industry. The patents held by the company show that it has accumulated know-how. A quick look at the Google patents reveals that the United States Office granted a patent in 2017: VOIP Analog Telephnone System - Net Talk.Com, Inc. OTCMKTS:NTLKWhile patents are interesting as they usually prevent new competitors from entering the industry, they are also searched when a consolidation phase commences in an industry. In line with this rationale, the largely discussed CALL's acquisition by B. Riley Financial, Inc. for $143 million may be creating some expectation around NTLK as well. Market participants may be wondering whether NTLK, which owns this patent, would not draw the attention of other financial buyers.What's the main issue?NTLK is interesting because of know-how accumulated. However, the company has not updated its most recent financial statements in the last two years, which increases the risk of shareholders. Think about it. We know that NTLK owns patents and they may be valuable for other competitors. But, the amount of cash in the balance sheet and the number of revenues obtained in 2016 and 2017 are unknown. Market participants holding shares of the company should be aware of this fact.Is this an opportunity? In 2018, we will be looking for NTLK's announcements noting that it intends to release the most recent financial statements. If this happens, the market expectations on this name could increase. Consequently, the stock price could also run. It would mean two things. Firstly, as it happened with CALL, bankers will be able to assess the total value of NTLK, and a transaction would be more likely. Secondly, transparency efforts should increase the liquidity in the market, which is usually beneficial for the shareholders.ConclusionCurrently trading with a market cap of $7.5 million, NTLK is an exciting story among small caps. In our view, the sale of CALL is affecting NTLK's share price. The fact that NTLK's stock commenced running exactly when CALL published its merger agreement may be only a coincidence. With that in mind, we need to say that we don't believe in coincidences in Wall Street. Have a look at the following image: CALL's Merger Agreement - Net Talk.Com, Inc. OTCMKTS:NTLKTo sum up, NTLK seems a stock, from which we should learn quite a bit soon. We will try to follow the next announcements of the company.Disclosure: We have no position in NTLK and have not been compensated for this article.Image courtesy of Brook via Flickr.

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