Larry, you got to be careful when a floorless finally gets its floorless removed. Look at ANCR now, from a floorless bottom of around $2 to, well (I did leave a lot on the table...). Once the interim financing needs (some $25 MM) get cleared, they can follow ANCR leads, and issue shares at a higher price in a more normal fashion. This order is a start, it is not enough to even make a dent in their cash burning situation, but if it is followed with others, they may be in the clear. From a technical point of view, we are running into resistance at what used to be the bottom of the trading range for the first six months of the year. I think that even buying above $7 once this resistance is taken out, if it is taken out, would be safer than buying here into the CC and news induced rally. A better price would be either on the breakout, or a retrenchment back to the low $5, IMHO. From a fundamental point of view, I think they will not be profitable for the whole of next year (until shipping rate reach a level of about $70 MM, assuming very good gross margins of 50%) because their burn rate at about $35 is still high.
Zeev |
