LAMENT:: overvalued stock

sometimes you wonder why companies continue to get decent valuations. Case in point - Rediff.com.

the company has had ample time, liquidity, the team and the investors to innovate and today after maybe 10-12 years of existence the end result

10mn USD in yearly revenues with about 1mn USD a year in losses, no clear direction or strategic shift planned (or communicated) by the management to change the course or direction of the company. The guidance seems to be - the indian internet subscriber base will explode and then even our revenues will explode hence please buy us.

My retort:-
1. Rediff has continuously missed the bus
2. Its revenues are pathetic given their cash position, liquidity and the fact that even smaller players like shaadi.com have done a better job of monetizing their eyeballs.
3. They seem to lag in all aspects and seem to follow a me-too approach with no innovation in either email, instant messaging, mobile content, or business services
4. The management team does not seem energized or committed to technology or any bigger picture given the fact that they do seem to claim that they will be the pre-eminent and largest online portal in India - a land of 1bn possible consumers.

I find it hard to believe that when the internet subscriber base improves, indian users will continue to partake of the pathetic online offerings from Rediff.

yet the comapany is enjoying a market capitalization of 172mn USD inspite of 10mn USD in cash and the fact that it is losing 1mn USD a year. How does wall street justify this? Or is this the india story at work feeding the madness of crowds?

Do let me know your views. . . .