Preston Langley Asset Mgmt. Inc. Initiates Coverage On New VisualEntertainment Inc.OTC Bulletin Board: NVEI) With A Sell Recommendation
NEW YORK, Aug. 22 /PRNewswire/ -- The following is being issued by Preston Langley Asset Management, Inc., a member of the National Association of Securities Dealers, CRD number 35733:
Preston Langley today released its research report on New Visual Entertainment Inc. (OTC Bulletin Board: NVEI) with a sell recommendation in a 3-page research report entitled "Fundamentals Do Not Support Current Valuation."
12 MONTH PRICE OBJECTIVES: $7.00 RECENT PRICE: $12.50
SYMBOL: NVEI (OTCBB) COMMON STOCK: 23.6 mil
OUTSTANDING RECOMMENDATION: SELL
FUNDAMENTALS DO NOT SUPPORT CURRENT MARKET CAP: APPROX $300 mil
EVALUATION
ESTIMATED PUBLIC FLOAT: 11 mil
RISK RATING: EXTREMELY SPECULATIVE
52 WEEK RANGE: 1.36 TO $31.00
BUSINESS -- The Company's key product is targeted for the VDSL market. It is designed to provide very fast DSL hookups of 52 Mbps data transfer rates, compared to around 8 Mbps in use today. Moreover it believes its systems can be connected to ordinary twisted copper wire common to telephones today which can be connected to the home or office and allow the bundling of voice, video and data without the need for expensive fiber optic cable installations. Known as CU@OCX, NVEI claims it has successfully tested this technology of transmission at 52 Mbps over copper wire at a distance of 9000 feet. Up until now that has been on fiber optic cable. This is called a "Last Mile Solution," and according to management, can be used over traditional phone lines on a different part of the transmission spectrum and net ordinary phone use while receiving data, voice and video.
SELL RECOMMENDATION: NVEI has had a sharp rise in price over a quick period of time, reflecting very favorable publicity from Internet investment advisories which received cash compensation and 200,000 warrants ranging in prices as low as $7 a share.
Adjusted for a reverse split, the company issued approximately 2 million shares for services and a private placement in March and April.
Texas Instruments (TXN) is among other companies working on this similar concept.
Despite positive market interest in telephony and telecommunications, and industry forecasts for the "Last Mile Solution," the shares can move lower on current weak fundamentals. Preston Langley believes NVEI shares should not be purchased at this time, but are rather a candidate to be sold.
MANAGEMENT -- The present management has diversified electronics experience, but there is no evidence that management has any ability in the field of telephony.
FINANCE -- currently company has $2 million in cash and a burn rate of $200,000 a month. Company claims it is working on long-term financing which may take several months to complete. Meanwhile the company wiles a bridge financing. Management is negotiating a manufacturing deal with undisclosed companies.
CONCLUSION -- based on the aforementioned reasons, and the risk of all-or-nothing proposition, a market cap of approx. $300 million for a developmental stage company, with $6800!! in revenues, shares reflect above average risk at current levels.
ALL INVESTMENTS INVOLVE RISK. THE RISK INHERENT IN A PARTICULAR SECURITY MAY NOT BE APPROPRIATE FOR YOU. PLEASE CONSULT WITH YOUR PRESTON LANGLEY EXECUTIVE TO OBTAIN ASSISTANCE IN SELECTING APPROPRIATE INVESTMENTS.
THIS REPORT IS PUBLISHED FOR INFORMATIONAL PURPOSES ONLY AND IS NOT TO BE CONSTRUED AS AN OFFER OR THE SOLICITATION OF AN OFFER TO BUY THE SECURITY. THE INFORMATION CONTAINED HEREIN IS BASED ON SOURCES THAT THE COMPANY BELIEVES TO BE RELIABLE BUT THE COMPANY MAKES NO GUARANTEE OR REPRESENTATION ABOUT THE COMPLETENESS OF THE STATEMENTS OR SUMMARIES OF AVAILABLE DATA CONTAINED HEREIN. THIS INFORMATION IS PROVIDED AS OF THE DATE OF THIS REPORT, AND IS SUBJECT TO CHANGE WITHOUT NOTICE. FURTHERMORE, THE INFORMATION IN THIS REPORT SHOULD BE CONSIDERED OUTDATED 90 DAYS AFTER PUBLICATION, OR SUCH EARLIER DATE AS CIRCUMSTANCES MAY REQUIRE, AND SHOULD NOT BE RELIED UPON THEREAFTER TO DEVELOP INVESTMENT STRATEGIES. PRESTON LANGLEY DOES NOT MAKE A MARKET IN THIS SECURITIES OF NEW VISUAL ENTERTAINMENT INC. NOR DOES PRESTON LANGLEY MAINTAIN A LONG OR SHORT POSITION IN NEW VISUAL ENTERTAINMENT INC.
SOURCE Preston Langley Asset Management, Inc.
CO: Preston Langley Asset Management, Inc.; New Visual Entertainment Inc.
ST: New York
IN: FIN TLS
SU: RTG
08/22/2000 09:02 EDT prnewswire.com |
