ARC’s stock continued to go down on Tuesday, even though the majority of NYSE exchange stocks experienced a rebound

Up, down, up, down, etc…..

Stock markets – across the board – plunged on Monday, but then (with the exception of ARC’s stock, which continued its decline on Tuesday, closing at $3.99) reversed course and gained on Tuesday.

I think I’ve finally figured out how the “big money” traders are screwing us little folks. It’s simple. They begin the “screw” by creating selling pressure on one day, then enter their orders to buy, before us little folks can get our buy orders in. I guess you call that “having privilege,” being able to trade when us little folks can’t. Or, something along those lines.

What’s up with ARC’s stock; by that I mean, where is it headed from here? Are ARC investors (both those that would have been had ARC’s Q2 2011 news been better and those who are already major holders of ARC stock) getting antsy because of the continuing decline in ARC’s core “reprographics services” revenues? I’ve repeatedly said that we need to see a recovery in the “residential” housing market, before we’ll see a recovery in the “non-residential” housing market. And, then, there’s “that trend” towards A/E/C customers printing less (per project).

On the point of “reprographics services” revenues, the vast majority of those revenues are generated by orders for “prints on paper.” Revenues from “digital services” are important, but they still pale in comparison to revenues from “prints on paper”. That doesn’t just apply to ARC, but to “all” reprographers. And, on that note, read this post that appears in one of the LinkedIn groups:

Group:

Reprographics

Discussion:

What will happen in 2011 with Repro Shops?? Where do we go from here?

Latest post in this discussion string:

"I am a repro shop in Kansas City, we developed mysmartplans.com, while printing with our solution is reduced by 80%, the 20% remaining is shutting down my competition. We offer a reseller agreement to reprographic companies that are looking for a new tool in their toolbox! Check us out, www.mysmartplans.com!"

Posted by Shelley Armato

The “repro shop” that Shelley is referring to is Marathon Reprographics. Marathon is much smaller than ARC’s KC area operations (the latter, formerly known as Western Reprographics), and I’m positive that ARC’s KC operations still generate a substantial amount of revenues from “prints on paper.” But, Marathon’s principals developed “MySmartPlans”, which, apparently, enables customers (primarily GC firms, but there are likely some A/E firms also using MySmartPlans) to “print less” (per project.) “Digital Services” revenues and “prints-on-paper” revenues are all lumped together into one revenue line item – “reprographics services” revenues. So, if a GC reduces its prints-on-paper expenses by 80% (which is the percentage that Shelley alluded to), then that represents a substantial reduction in the “overall” reprographics services revenues number, even though “digital services” revenue increases. If this is the trend, then reprographics firms are going to have to continue to shed print-production manpower, print-production floorspace, courier fleets (personnel and vehicles) and print-production equipment. This situation is not altogether different from what happened when the entire industry had to substantially “change” because the OCE 9800 (years ago) eliminated the need to have a diazo department, an engineering photo lab; those two departments were eliminated, or should say, combined with the former “large document Xerox” department. Change continues.