Analyzing COMS
It seems Yahoo is wrong in reporting cash/share at $6.60. The info on COMS home page is that they ended the quarter ending 3/2/01 (3rd Q of ' 01) with $1,847B, having burned $589M in the quarter. They expect to end this quarter (4th Q of ' 01) with 1.4B of cash. They report shares, basic and diluted, of 340m. So, most recent Q they ended with $5.43, and will end this 4Q (ending June of ' 01) with $4.11. They expect to have cash flow profitability as of Q2 of ' 02. So after Q1 of ' 02, they will have ??, maybe $3.00 or so.
COMS also lists assets of accounts receivables and "other assets", but these are about equal to accounts payable and "other current liabilities."
I don't know about land value. Who knows if they can become cash flow positive by Q2 of ' 02, which means only this and the next Q being negative cash flow.
It seems that COMS does have cutting edge technology in some fields, but it is problematic whether they can make money even after draconian cost cutting.
I got in too soon at $5.50. Should have analyzed it more. The cash hoard is being spent at a rapid pace. Buy-outs are less likely because of the Palm spin-of until 2 years after the spin-off, or July of 2002, right about when COMS says it will become cash positive.
My guess is that COMS could drop to $3.50 in the next month or two. If the market & economy improves, and if COMS executes on its cost-cutting measures, this stock could be $10 by July of 2002. However, BK is not out of the question with just a little bad luck.
What other opinions are there? Are there other significant real assets owned by COMS that would set a higher floor on the stock price? |
