Jack King:
"I must have eight or 10 offers to acquire or merge with what were previously competitors"
"The offers are on my desk"? (sorry, I couldn't resist ;-)
Seriously, now that it looks like the Y2K hype has died down, perhaps all of us, shorts and longs, should re-evaluate Zitel. Here's what I can think of:
* Matridigm will probably not contribute meaningful earnings to Zitel
* However, Matridigm might not cost Zitel much (if anything) more
* Zitel has already substantally written off their Matridigm investments -- that hit is behind them, not ahead of them
* Zitel is now essentially the software companies they acquired
If Zitel can finish restructuring (sell off assets they don't need anymore, terminate leases of facilities they no longer use, stop sending money to Matridigm, liquidate (if possible) their investment in Matridigm, etc), and get their software company operations to be self-supporting, then they can save the company and stop having to continue to raise cash (by selling shares) and then burning it.
Can they achieve this? And at what point? (How soon, what would their cash position be, how many shares outstanding, etc).
As much as everybody else here, I should take a serious look into this now. If Zitel doesn't disappear into oblivion via bankruptcy or otherwise (and I suspect that they might have a pretty good chance of managing to survive), then knowing what ZITL (the stock) will be worth in five or ten years is probably a useful exercise for all of us to go through.
- Daniel |
