gentlemen:
i've followed and been involved in this industry for the past ten years, and i don't believe these folks are long-term players. their 1st qtr report (issued may 13) was, once you got past the b.s., extremely weak. they tried to make it sound great by announcing a whole bunch of memorandums of understanding (mou) agreements, which i find incredible. where were the firm contracts for the first quarter? that's what makes money, not mou's. it's my understanding that the much touted accent health deal for 10,000 vsats over the next 12 months required them to essentially fund the units on behalf of accent health, not to mention the fact they made an equity investment in the company. i don't believe accent health had the wherewithall to pay for these 10,000 vsats, so in my mind, there's a huge financial risk there, IMO.
the ge connection was mentioned here as a positive. ge bailed from "spacenet" and gilat was the only entity willing to buy them, and they did so by issuing a whole bunch of new stock. "spacenet," which gilat acquired in dec '98, was originally owned by gte, who couldn't make a go of it and lost millions; gte sold the "spacenet" subsidiary to ge, who kept it for a few years and likewise couldn't make a go of it, and sold it to gilat. gilat were the principle vsat hardware oem providers to ge spacenet, with ge spacenet having the exclusive marketing rights to the gilat product in the u.s. the only way for gilat to protect their distribution and marketing channel in the u.s. was to acquire spacenet from ge.
the only common thing about spacenet is that their past three parent companies names have all started with a "g," and the fact that they have continually lost money and done poorly in the market.
IMO, not a winner, and i think that is now being properly reflected in the stock price. as time goes on, i suspect the financials will get worse as the proverbial chickens come home to roost.
pick up a copy of their most recent prospectus which was issued in jan '99 as part of their recent stock offering.
the above is personal opinion only.
you'll need to formulate your own. |
