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Technology Stocks : PageMart
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To: Q. who wrote (13)5/2/1997 11:24:00 AM
From: Q.   of 21
 
Does PMWI now have a negative book value? We won't know for sure until they file the 10Q, but after today's earnings release it seems quite likely that they are now worth less than nothing. PMWI reported a net loss of $12.055 M. They conveniently omitted the shareholders equity from the balance sheet shown in today's news release, so there's no way of knowing for sure.

On 12/31 shareholders equity was $10.43 M. After the loss, that would be down to a negative ($1.62 M), plus whatever they raised by selling shares. Average primary shares outstanding went up by about 2.2 M over the last quarter. That's probably too many new shares for stock option exercises, so I'm not sure where all the new shares came from. Maybe from conversion of convertible preferred or warrants being exercised, I'm not sure. So we won't know until we see the 10Q how much equity they raised by selling shares. Then we'll know if the book value is negative.

Even if the book value comes out positive, it seems likely that it will still be less than the $4M net tangible assets requirement for maintaining a listing on the NASDAQ National Market. The analysts at NASD will check the 10Q when it comes out and send them a delisting letter if they no longer qualify for listing.

Interestingly, the news release today touts how much operating profits before selling expenses went up and how that is the primary measurement the co. uses for its profitability. What a straw man for financial performnce that is. What really counts is earnings, and net earnings were more negative than before.
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