Summary of FWF
Don't hold me to every world. Some is paraphrased.
ragingbull.lycos.com
Fridays with Fred. 56:14
FS: Is delisting an issue for evwap volume? Have large users shied away from evwap because of delisting?
F: No. SEC rules guarantees trades so the users are safe.
FS: Why has volume fallen?
F: There are depressed feelings after 9/11 which ruminate in the investment world. Institutions are also sitting on sidelines til year end to trade portfolios. He talked about markets after tragedies bouncing back. By year end it will come back vigorously.
FS: Future of evwap?
F: We are going by our business plan making changes in relation to the economy or competition. All will increase and opportunity will be greater. Execution rating 3.7 out of 4. First time on Lexus radar screen for Croix securities. Next week we'll do guaranteed fill list. We'll be able to trade up to one million shares per trade starting next week.
FS: Guarantee program? Why not sustained volume? What is in way of achieving 10M revenue shares/day?
F: July 9 introduced guarantee program, slowed after 9/11. Liquidity and critical mass two diff. things. Critical mass has to do with type of customers, not number. Liquidity is king and we're developing it through guaranteed fill program.We were on our way to good volume prior to 9/11.
FS: Guaranteed program is critical?
F: It's necessary to do biz in the world today. We need 20 customers to do it on a regular basis.
FS: how many customers now?
F: 14-15 now, 7 signed on, 5 used it already, before 9/11.
FS: Revenue. Why hasn't ATG made money on evwap trades? True? What is revenue per transaction. Loss from lab work? How many shares need to break even? when will we make money from evwap?
F: Until we get guaranteed trade, we are limited. 232M shares in 2001. 4,000 trades this year.7,800sh/trade/avg. We need institutions to get into guaranteed program. Institutions don't like it if they can't pull the order so we ask them to do just 100K share trade instead of larger one. 10/12 cents paid for guarantee. As we increase volume, cost will drop and we will keep more of transaction.
FS: Are you paying through nose for guaratee?
F: It looks like that now. We need another two quarters to build volume. Committer fees will go down. In 4th quarter end 3/31/02 break even. (21 min)
FS: status of largest client using system? biggest of big. likelihood of more users using system?
F: Up the road they will find their way to our system. If all big players come in, will blow the place up. Two of largest Money managers in world use it. I want 3 cent plus trade.
FS: blackman q. What about away from evwap volume? croix net volume?
F: away from evwap trades and croix, not through philly exchange. Almost all trades are naz issues.
FS: when will sec approve philex naz stocks?
F: Working on it, complications. SEC hasn't made final ruling yet. It won't matter much to us.
FS: has astn filed for another extension for evwap on Philex?
F: philly said they filed one and should get it
FS: evwap on toronto?
F: Delay is in offering, second delay.
FS: will astn issue pr's about volumes like liquidnet does?
F: liquidnet is private, they can do whatever they want. they had liquidity from investor institutions which hurt us directly. we release news if material as we're public.
FS: nooner? (30min.) any volume, how much, how much expect, will it cannibalize from preopening?
F: it won't cannibalize because institutions don't participate in opening but do right after open. 52% trades noon to 4:15 with 40% in last hour. international markets come in preopen, national market especial the west coast after 10:30 and technique of playing last hour. inst. use limits, don't want whole order in. noon session backseat to guaranteed fill as inst. interested in naz stocks. shift in investing from value to growth investing. we applied to russell. In this sideways market use limits and size constraints but will be directional in future. I'm head of inst. sales now. Institutions say afraid of market, use limits, use judgement, they will play when maket is directional.
FS: status of eclose?
F: not ready yet, soon.
FS: ATG trading losses?
F: no losses by year end. We are waiting to hear from SEC applic. and building interfaces by philly as we speak.
FS: selling intellectual property rights of evwap and rest of astn in general?
F: never talked about it at all.
FS: gomez? status. dividend, ipo, relative to astn shareholders?
F: Gomez has been disappointing, big $ put in over $5 share price. 3.5M financing for gomez. that is the end. gomez was struggling. we wanted to take it public last summer. rejected by bank boston venture capitalist. they refused to react to us. $52M plus in company year before refused and walked on deal. financing will cause a takeover of the company by venture capitalists.
FS: jameson. how much of the credit line has astn taken. will you access all of it. toxic financing. how many shares need to be issued to get money to keep solvent, astn controlled by outside interests?
F: We will raise $3M by year end of $15M. share price since 9/11 has changed it. $1.8 taken so far, maybe almost 1.9. Won't access all of it. Toxic is just a label on technique of secondary offering. no one is doing secondaries for five years now. if i get money i need by 12/30, will be in good shape. 10-15M max. control of company i don't worry about, jameson is a friend.
FS: mergers?
F: we've been talking to qualified partners. no new development at this time.
FS: rose glen?
F: put $20M in one fell sweeop. friend of company, terrific people. sold some securities they held, if we do a deal, they would be willing to help us get through process.
FS: southridge? mark valentine? being sued for stock manipulation and fraud by companies funded?
F: look, ya know, we're in a litigeous time, um, ...not my problem , a, b , doing good job beating people who sued them them. couple companies used financing as reason for own demise, wouldn't make it anyhow, valentine isn't director at astn (he is director of uttc though).
FS: cash on hand, burn rate?
F: end of oct. was 700K/mo or 35K/day down from month before of 41-42K/day. $1M cash end of oct and our credit line. 42 people in company. executives willfully taken pay cuts and , ya know, just get through this, defer it to another time when we're cooking.
FS: warrants? extending term.
F: like to see extended, i recommend to board, haven't had meeting yet.
FS: profitability? break even fourth quarter?
F: i need to drive cost down with committers.
FS: incresae number of shares? reverse split?
F: well, ya know, i don't ever want to consider a reverse split, will only consider when stock is higher and climbing, my recommendation, at instinet, had to dilute many times to finance, Knight too, if company doing well, doesn't make much difference, once we get cooking, ya know, I think we'll be okay.
FS: more authorized shares?
F: probably need to increase it if need another investor.
FS: management buying more stock? insiders?
F: i got many notes, calls, let me put it this way, i can't speak for anybody else, my family bought 1.5M almost since 9/11, what others do they have to answer, all young married guys, i'm an older married guy, my heart and soul geared to success for the company, so i continue to do it.
FS: you are chief salesman now?
F: I had guys with great pedigree from intenet who didn't have the heart that I do so I replaced them, i've been in 14-15 cities since aug, sep, oct. I get around.
49 min.
FS: What is the status of lawsuit again mary cummins?
F: Oh, you know what, this is a wonderful, wonderful human interest story.
She sent me balloons for my birthday. I called her and thanked her, she was very nice. mary and i have nothing against each other at this point.
FS: well that's nice to hear,
F: isn't that nice?
FS: what can explain recent drop in share price. where price in year from now?
F: i have no comment about stock price. setbacks, rose glen, jameson, i can't tell you what to do, no one tells you when to sell or buy, potential could be explosive, my sentiment.
FS: how possible in your view is bankruptcy filing, no market in astn stock, long term viability of this company?
F: The world isn't ending, i have credit line, so no BK thoughts, we are struggling getting through end of year, yes. market will cease? we are building company to be relisted on amex or naz, lick my wounds to build a business. company will get ahold of market when insti. get back and start to move. will build revenue, increase margin, my fear is we won't get a chance as we are galloping along to go all the way again.
FS: summarize in one word? you are confident?
F: you told me tone it down a little, a sincere thought from a guy who always works a business, 86% of naz trades don't beat evwap so we're in the swing. we are convinced will get sec approval and will get more biz based on just being an affiliate. we are prepared to move forward, times will change for all of us, that's what i believe.
FS: i will cut you off before you get into trouble. 50-60 questions, some were tough, thanks fred. we will continue fwf as long as shareholders are interested. |
