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Microcap & Penny Stocks : SVCDQ, temporary board?
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To: Arthur Tang who wrote (18)2/22/2000 11:20:00 AM
From: Arthur Tang  Read Replies (1) of 66
 
News of the business plan for year 2000 is out. The plan has many changes which has yet to be approved by the bankruptcy court. The stockholders have been wiped out in the business plan to presume that the new stock to be issued when exiting from the chapter 11 proceedings will issue new stock to the prepetitioned unpaid vendors. This is a plan which will stall these vendors from squeezing Service merchandise for cash payments on new deliveries.
The plan is hopeful of changes in real estate value; but is overly optimistic that the unused parts of the stores will be subleased. Caldor and Lechmere both are not able to sublet most of their stores yet.
And that internet business will be helpful to the business, if initiated in the stores. So far, this theory is untested and unproven to be successful. Many stores are attempting this approach, but no revenue is reported of any significance. The reason is human nature, you go to stores to buy something you can see and touch. If you stay home you get on the net to check out the lowest priced bargains. The two events were never related in any event. Catalog stores failed for this simple human nature misunderstanding. J.C.Penny had dismal sales revenue with small catalog stores, which never draw any traffic.
The new financing was due to the fact that most of the loans were taken back by the DIP banks; new bank loans had to be written.
The business plan has serious problems. The common stock can not be cancelled until the reorganization plan is approved. So, the hearing at the bankruptcy court may be interesting, as far as how it will be successful enough even for Service Merchandise to reach a reorganization plan in April 2001.
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