Hoping for a bounce - early indications are yes but premarket and open can be tricky
Globe says smart investors buy Imax
Imax Corp IMX
Shares issued 29,808,888 Oct 12 close $6.55
Fri 13 Oct 2000 In the News
The Globe and Mail reports in its Friday, Oct. 13, edition that as panicky
Imax investors clamber for the exits, smart investors are sneaking in to
enjoy the show. The Globe's Vox column says there is no question that Imax
is facing serious problems. At the moment, it is abundantly clear that no
one wants to buy the company, despite its efforts to be acquired. At
Thursday's closing price of $6.55 Imax is trading at book value -- implying
that the business itself is worthless. However, despite its third quarter
loss warning, Imax will make a profit this year. It will take a few quarter
for business to improve, but it will, at which point Imax may look
attractive to a potential buyer. It is, after all, a logical piece in the
convergence puzzle. Finally, there is the issue of Imax's Digital
Projection subsidiary. The unit is one of the front-runners in digital
projectors, and one of only three firms licensed to use DLP Cinema, the
leading technology in the field. Digital's revenue is up 26 per cent since
Imax bought it a year ago and accounted for a fifth of sales in the last
quarter. As a stand-alone, fast-growing, $45-million-a-year company in a
sexy industry, Digital should have some value, says The Globe.
(c) Copyright 2000 Canjex Publishing Ltd. stockwatch.com
Globe says Imax clobbered on warning
Imax Corp IMX
Shares issued 29,808,888 Oct 12 close $6.55
Fri 13 Oct 2000 In the News
The Globe and Mail reports in its Friday, Oct. 13, edition that Imax
plummeted $15.25 to $6.55 on the Toronto Stock Exchange Thursday after an
unexpected profit warning spooked investors. The Globe's Keith Damsell
writes that six weeks ago Imax traded in the $40 range. An unnamed New York
fund manager says: "This company was blaming short sellers a few weeks ago
and now they say they're going to miss earnings. I don't know what to
believe. It's not a pretty picture." Imax warned Wednesday that its profit
for the fiscal year would be about half of what analysts had forecast. The
company stresses that it is on a solid financial footing, but it refuses to
disclose its current cash position. Imax says it is impossible to predict
how the earnings shortfall and the troubled United States film market will
affect the sale of the company. A perceived shortage of information
prompted at least two brokerages to issue downgrades Thursday. Prudential
Securities cut its 18-month target price to $9 (U.S.) from $37. BMO Nesbitt
Burns cuts its 12-month target price to $11.50 (Canadian) from $30.
(c) Copyright 2000 Canjex Publishing Ltd. stockwatch.com |
