I sold my NEWR position in January. I sold for a few reasons, but yes, the fact that the stock price seemed range bound was a factor.
I try to not allow stock price to influence my decisions too much, but I can’t ignore it either. When I have a position that does close to nothing for a few months, I might not see much wrong with the company, but the fact remains that this one is not performing (for whatever reasons) while others are performing very well. Ultimately, I invest to make money. So relative performance can’t be ignored.
As for NEWR as a company and the products they had to offer, I also had some misgivings. Their primary offerings are IT performance monitoring tools. I spent 30 years in IT and have an appreciation for these kinds of tools and where they fit in the environment. The fact that my appreciation predates the existence of NEWR should tell you something about the competition. There’s lots of it and it’s been around for a long time.
I used to manage a group of IT folks way back in the days before Oracle and distributed processing. The primary database product for a lot of companies back then was IMS-DB/TP. IMS (Information Management System) was an IBM product. The DB stood for database, the TP stood for teleprocessing - it came with its own network management and set of communication protocols. In those days, everything was hard wired. IMS performance was an issue back in the 80s. IBM had an adjunct product called TPNS - Teleprocessing Network Simulator. I managed the TPNS team. Their job was to devise test scripts, provide test data, execute tests and perform related activities. All of this was focused on trying to insure reasonable response times for end users as experienced at their desks. There was no local processing whatsoever. Three seconds from enter key to screen refresh was considered satisfactory response. In other words, there’s nothing innovative about these tools in general terms. Vendors have been providing performance monitoring tools as adjunct products to their primary products for a long time.
But here’s the rub, say you’re in an Oracle shop, and your company just acquired a company that’s a SQL-Server shop. Those Oracle tools will not help you monitor SQL-Server performance. And those are database tools. Application performance is trickier to measure and interpret as is network performance. NEWR has offerings that are vendor agnostic, that’s one of the things that originally attracted me to the company. But, with purchased software, your options for responding to application performance issues are rather limited. Also, performance is a relative term. I mentioned that in the 80s where I worked 3 seconds was considered satisfactory. That wasn’t an industry standard, it was an internally established target. I don’t know how much this has changed, certainly three seconds would be considered poor performance under most circumstances today. OTOH, I doubt that there’s crisp definition of good performance. So NEWR provides tools to address an ill-defined problem.
Further, I was concerned that ESTC might compete head on with NEWR. My impression was that their general search product could be the basis of a formidable challenger in the performance monitoring market. Since that time, ESTC appears to be less of a competitive threat, but the capability seems inherent with their product. I think it was a decision based on an evaluation of the related development and marketing costs.
And a separate comment (I forget from whom) mentioned IT budgets. My experience is that IT departments starve the budget for internal tools in general. The IT department is often the least well served in the company by s/w automation.
All these things contributed to my decision to put my money to work elsewhere. The simple fact is that we have a lot of good opportunities from which to select our investments. I don’t trade in and out based on the latest stock price. At the extreme, I guess that’s exactly what day traders do. And I pay zero attention to technical analysis; just seems like voodoo to me. It’s not that I found a lot of things wrong with NEWR, I just thought there were other investments with a more compelling case.