All,
According to SEC filings, Georges Laurent Jr (GLJr), is the holder
of a Promissory Notes dated 12/18/96, saying Vitech is to pay to him 5M due 180 days from that date @ 20 % annual interest rate.
He also holds another Note dated on 4/10/97 under the same conditions.
Check out:
edgar-online.com
My question is: With ~1.7M in cash and cash equilivants as of 3/31/97,
how are they going to pay off these Notes. The first one is due unless
the terms were changed (the SEC filings did say terms could change as long as both parties agreed to them). With the recent purchase of this Brazilian company, that will really reduce Vitech's cash flow.
GLJr owns ~8.2% of all outstanding stock as of 5/8/97 (~877K shares).
Until yesterday, I never heard of this company, then I got a cold
call, from a broker pushing Vitech. He mentioned something about a
secondard offering. I've never heard of a IPO having a secondary
offering 8 months after going public. I'm guessing the Note that
is due and this secondary offering are somehow related.
This is what I think:
The firms who brought this stock public are controling the price.
I'm guessing that brokers are making cold calls, taking orders for the
market price (i.e. people are not setting buy prices), and the firms are bidding up the buy price. Brokers can tell new investors how the stock is taking off and the process feeds on itself. When they feel they can't bid up the price anymore, look out.
Until I know how Vitech is paying off the Notes, and how Vitech is
going to buy this new company, I'm not going near this stock.
I think its overbought, and when it comes down, look out. If I was a shareholder, I'd be thinking about taking some profits. Looks like support is ~ $12.
Hope you Vitech shareholders do well for yourself, and like I said
I'm not a shareholder, just a curious guy doing his "homework".
later,
jim |
