Comments on earnings: 1) "beating expected earnings by 50%"--$0.08 was MINIMUM earnings, not "expected" earnings." And don't confuse statements from a company with an analyst's expected earnings--the latter is an outsider. We all knew that Bill is always going to use as a public figure an amount that he was certain to beat. Hence the figure that had to be beat was the "whisper number," which on this thread I think was more on the order of 10-11 cents. However, the use of almost 7 million shares, including certain derivatives, as the base skews all our estimates a bit. Translating to the 6.2 million shares outstanding we were originally told to expect, the net income would translate to about 13.5 cents per share, on the high end of my estimate of 11.5-14 cents for this number of shares. 2) The number of outstanding warrants is a bit obscure. The "investor units" sold during December and January included 304,000 warrants; the limited partnership units included 450,000 warrants. The 10-KSB refers to other warrants authorized for services but not issued as of 12/31. 3) I expect a firming of stock price but not a big run-up on this announcement. There is still too much problematic about the rate of sales and manufacture. Remember that GRNO had an even better quarter in 1995, and recall what happened to earnings after that one. 4) The company has not yet qualified for the NASDAQ national market and will not before the 2nd Q report (not even then, if actual sales don't pick up considerably). The co may have to decide if they want to pay for a special audit to certify attaining appropriate financial requirements, or wait to the end of the ensuing quarter. Attaining NMS listing will qualify the stock for purchase by a number of probable institutional buyers of GRNO; their entry into the market will likely lead to significant upward pressure on stock price. 5) Once again, the stock market is a leading indicator. Short of a complete surprise, the stock market does not react to news, it anticipates it. Expect the "ride" to begin when it becomes clear (to those who seek out the info) that it will certainly qualify for the NMS, not when it applies for listing or is approved for listing. Since this point may take a bit longer than I have previously expected, I am thinking that a significant move above $10 may still be several months off, unless the company announces receipt of deposits on several sales and indicates that the rate of manufacture will pick up to an average of at least one a month.
=+=+=Norm
Hey, IEI watchers, does this analysis of "really good news" help at all? |
