Third Quarter Results. According to today's PR of 4:05 pm ET, VLNC stated that the $42.2 million net loss included a "one time charge for impairment of assets of $31.9 million or $ 0.70 per basic and diluted share, which represents a write-down of manufacturing equipment in the company's Northern Ireland facility, and a portion of the value of the intellectual property acquired from Telcordia in December 2000".
It was apparent early on (at least to me) that VLNC overstated the value of the Telcordia deal (remember the Dec 2000 statement, following the acquisition of the property rights, that VLNC was going to spin off its functions into "tracking stocks"). Apparently there was no business basis for such "tracking" action. In my view, that failed announcement was a significant red flag with respect to whether VLNC knew what they were doing. Immediately following that announcement was Lev’s appearance on an Internet program wherein he stated that the IDB had given VLNC money a few weeks earlier when, in fact, the IDB had done no such thing. Yes, I know, others saw similar warnings earlier on, but my question now is just what is this "write down" of manufacturing equipment at the NI facility? Does this mean that the purchased equipment cannot be used or what? Not being an accountant, I would appreciate knowing just what the significance is of the "write down".
As stated in an earlier post, I no longer hold VLNC shares; however, I do continue to follow the stock and, if VLNC’s performance warrants, will jump back in (with absolutely no impact on the market).
Regards,
Bigcue |
