*Having said this I can't imagine a stock split until the price is in the 50 - 60 range.*
You are right Pat (as usual). After hanging out having cream sodas in the high single digits for several years, I guess my initial reaction to the suggestion of a split was that of horror! As to the fellow who postulated such an event, I apologize for the knee-jerk reaction. I guess it would make a certain amount of sense at a higher price, say the $50s. Maybe only a 3 for 2 though.
All this brings up an interesting point: FUNDING! I still feel that the dilution myself and many, many other shareholders have been enduring for these last years from the debenture/warrant issue is not a waste. The cash flowing in from the exercise of the warrants is assisting in the build-out of production lines and hiring more PhDs (see below) . . . I suspect that they are all exercised by now given the recent share price levels. But even more important, with the additional interest from institutional folks VARL could easily get a secondary off if the price were to move higher. This is a simple concept that George Soros wrote extensively on in his book “The Alchemy of Finance” (at Amazon, I highly recommend: amazon.com. I really do feel that our friends at VARL are going to be in need of funds a short way down the road due to the huge potential in THREE areas:
Broadband Wireless (LMDS & MMDS - last mile solutions)
Optoelectric (converting wireless signals to optical and back again – last mile solution)
Handsets (ya all know the story here)
Perhaps this is why they just renegotiated a new financing arrangement (did you miss this tidbit? I about fell off my chair!) biz.yahoo.com (go down to the “Capital Resources” section) that effectively gives them access to some additional millions of $$$. This is very important in that they avoided another potential dillutive deal with the debenture/warrant opportunists (should they have needed a quick cash infusion) that can sometimes create a downward financial spiral. Anyway, we can all rest easy that VARL will only be dealing with folks interested in the company's success rather than cash flow that can be stripped and burned.
The bottom line is that a reinforcing process has begun that should set VARL up very nicely should they need access to capital markets – shareholders like you and I are in for an incredible ride. WE ALL SHOULD THANK JON CLARK (the CFO) FOR THIS. HE HAS KEPT THE COMPANY IN SPECTULAR HEALTH WHILE BUSINESS WAS BROUGHT IN, AND VOLUMES ALLOWED TO GROW UNDER VARL's TERMS.
Anyway, I am ranting again.
P.S.
The company has a history of only hiring more high level employees (I mentioned the PhD's above) when business is about to take off. Which of course, begs the question: Business is already slated to grow ~35%+ top line this year, just what are they expecting?! |
