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Non-Tech : IABS: International Absorbents
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To: Robert Jones who wrote (1)12/3/2000 3:03:07 PM
From: AurumRabosa  Read Replies (1) of 5
 
I own a boatload of this stock myself. Not sure if a boatload is more than a truckload though ;-}

I was attracted to IABS because it looks like a cash factory with no debt growing off their own organic earnings. What a refreshing change from the bloated over-priced tech stock arena. I went into the local Petco store and found they were using their Carefresh small animal bedding in all their cages. I talked to the department manager and he said it was definitely the best product but he rotated a few cages with other products to encourage sales across product lines. I wanted to buy their kitty litter but they don't stock it yet. He said with their good rep on the bedding it was a foregone conclusion that they'd stock the kitty litter and the only reason he could think of that was holding it up was whether or not they could contract for adequate supplies to stock their nationwide chain. Sounds like they have lots of room for growth.

I do however disagree with management on their 1:4 reverse split and especially on the increase in authorized shares. I was disappointed by their statement that they qualify for listing on a "senior exchange" if their stock price was higher. What exchange? The listing requirements I've read for US exchanges are posted on their web sites and I don't think share price is material but market cap is. A reverse split will not change the market cap. More importantly, giving management more shares to play with is dangerous in my opinion for a microcap stock. What are they going to do with it? Do they think they can use it as "currency" as the failed and downtrodden dotcoms would've claimed? If they start playing that game I'll sell immediately. I like this stock because they have been very smart and run off internal cash flows. If they want to buy another company or build a new plant then save up cash, go to the bank and apply for a loan, sell bonds and go buy it. But do not start printing stock certs and diluting existing shareholders with what will surely be alleged to be "accretive" purchases. I've heard that bull before and it doesn't work. I recommend all shareholders vote their shares. At least this microcap is not controlled by insiders and common stockholders still have a real vote. Please exercise it.
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