Netlist Inc. (NLST) Closes 22.64% Higher

Netlist Inc. (NLST) Closes 22.64% Higher

Shares of Netlist, Inc. (NASDAQ: NLST) jumped more than 25% in today's trading. The small cap stock closed 22.64% higher at $3.25. Volume was up from daily average of 592,000 to 3.86 million. Irvine, California-based Netlist is a designer, manufacturer and seller of memory subsystems for the server, high performance computing and communications markets.

Netlist yesterday announced its first-quarter results, reporting a 265% increase in revenue in the quarter. On a sequential basis, revenue increased 17.8%. The company reported a loss of $0.14 per share in the first quarter, down from a loss of $0.19 per share reported for the same period last year.

C.K. Hong, Netlist's CEO, said that the company continues to make important strides toward commercialization of its two emerging proprietary memory platforms, HyperCloud? and NetVault?. Hong also said that the company received its first commercial order for NetVault in the quarter. He believes that the company is in strong position to continue its progress through the rest of this year. In the first quarter, the company also sold 4.6 million shares of common stock. The shares were sold at a price of $3.85 per share, slightly higher than today's closing price.

On May 6, the company reported that it has shipped more than 1 million units of its NetVault-Battery-Backed (BB) module since inception. In its latest 10K, the company mentions that as of January 2, 2010, it had 14 patents issued and 16 patent applications pending. So any news of approval for any of its pending patent applications can have a positive impact on the stock. The company also highlights a number of factors that may cause its operating results to fluctuate. Some of these factors include inability to develop new or enhanced p! roducts that achieve customer acceptance, loss-of, or significant reduction in sales to a key customer, and ability to effectively operate its manufacturing facility in China. Since its inception in 2000, the company has reported a profit in only one fiscal year. The biggest operating risk the company faces is that it generates bulk of its revenue from a limited number of customers. In order to lower this risk and also to turn profitable, the company will have to expand its customer base.

With a 52-week range of $0.29-$7.98, the small cap stock has been extremely volatile. It has an extremely high beta of 6.54. This implies much volatility and risk involved with the stock. Currently, it is trading below its 50-day and above its 200-day moving averages.

About BeaconEquity.com

BeaconEquity.com is committed to producing the highest-quality insight and analysis of small cap stocks, emerging technology stocks, hot penny stocks and helping investors make informed decisions. Our focus is primarily on the underserved OTC stocks market, or "penny stock" market, which has traditionally been shunned by Wall Street. We have particular expertise with renewable energy stocks, biotech stocks, oil stocks, green energy stocks and internet stocks. There are many hot penny stock opportunities present in the OTC market everyday and we seek to exploit these hot stock gains for our members before the average daytrader is aware of them.