Why I'm Unloading My Shares of EuroWeb ASAP (EWEB)

| About: Euroweb International (EWEB)

This past Thursday, the company dashed investors hopes that it would use its cash hoard for a special dividend or share buyback. We have reported on EuroWeb International Corp. (EWEB) in the past. On Thursday, after the market closed, the company filed an 8-K report with the SEC stating that the company would put up to $10 million into Hungarian real estate.

EWEB set up a wholly-owned real estate subsidiary and is doling out the cash hoard in $1M chunks to the sub. According to the press release, the loans are to be used to invest in real estate opportunities that are expected to yield at least 15% per annum and last no longer than three years. In other words, EWEB wants to become a real estate flipper. In Hungary.

If that's the best use they can find for their cash, I don't want to be a shareholder. I'll look for an exit, take my lumps and move on.

EWEB 1-yr chart:

EWEB 1-yr

DISCLOSURE: I am long EWEB. Not a recommendation to buy or sell any security.

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