<<Re financing: company has resorted to several private placements with institutional investors in recent months, and may well have to do another one, in my opinion, before the next purchase contract is announced>>
Each one of which has followed a steep decline in the stock price, indicating these institutional investors are likely preselling the stock (leaky floorless). Which also indicates they are not buying the stock as a long-term investment, but rather for the quick 15% to 20% profit.
<<At one time the company indicated that it hoped to become cash flow positive in the 12/99 quarter. I think this was predicated on slightly faster initiation of orders, and a discussion with senior management (702-558-1000) indicates that this date has been pushed back to 3/00 quarter.>>
Management acknowledging the obvious. Losses are increasing not decreasing. It was only about 6 months ago that you guys claimed they would be cash flow positive this quarter. Now you are claiming they will be cash flow positive in 6 more months.
<<I use a net income margin of 20% once breakeven is reached (which Dawson stated on a prior cc to be about $ 40 mm/year in revenues.>>
Once again, this seems quite optimistic. Last quarter, they had $9.4 million of operating expenses on $359K of sales. Annualize those quarterly figures and $37.6 million of operating expenses on $1.4 million of sales. In order to break even on $40 million of sales, they would have to ramp up production from $1.4 million to $40 million, while operating expenses increase only from $37 million to $40 million. Therefore, in order to break even on $40 million of sales, they would have to increase sales by 2757% while only increasing operating expenses by 9%. That would be quite a feat.
<<By anyone's measure, the technical picture of the stock seems strong. Point and figure chart shows the breaking out of a 5x top at $ 8.50, and Dorsey Wright indicated the same, as well as potential opportunity (if it occurs) to add to positions at $ 8.50, the prior top.>>
Yes, and the technical picture was very strong a year ago.
<<I obviously believe in Dawson - went to the NI plant and had dinner with him and two of his top engineers, and think they know what they are doing.>>
You must have believed in Cal Reed when you reported on this thread 2 years ago that your sources were telling you production was on track for the first quarter of 1998. And you must have believed in Dawson in June of 1998 when you reported on the Yahoo thread that your sources told you that a major OEM was ready to sign a large contract. You must have believed in Dawson when you claimed a year ago that we would have a contract by January of 1999. And you must have believed in Dawson when you were claiming 6 months ago they would be cash flow positive during the current quarter.
It is heartwarming to see you still trust in management after all these erroneous predictions you have attributed to them over the years.
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