Dave, I agree that in order to convince analysts to recommend them they will need to show big orders. Rather what I am suggesting is that you can't get recommended if you aren't even covered, and that not being covered is much worse than not being recommended. If you are covered, then when circumstances change, you get upgraded. If you aren't covered, well, no one will notice.
What I am suggesting is that they haven't been communicative with the analysts in the past, nor have they given the analysts enough reliable information to go on. The net result is that the analysts who were covering them ended up looking really bad, and they didn't like it (and neither did their clients).
I just checked first call, and there is one analyst still covering them, which is alot better than none. His estimates don't make much sense, though. He now has $.25 loss for Q3 and $1.15 loss for the year, and a $.75 profit for next year. He must be adding back in the effect of the inventory writeup, which would make Q2 $.46. Anyone remember what Q1 was on that basis? I am trying to figure out where he has Q4. The only number I can find for Q1 is the $.81 loss which includes the written up inventory.
Taking out the effect of the inventory writeup, my numbers would be $.30 loss for Q3 and $.10 loss for Q4.
Now let's go back to the Q1 conference call to sell how the information that they provided was of assistance to analysts:
"They expect to have about $21-$23 mill in revs this quarter.....based on their estimates they need between $23 to $25mill to breakeven.
They are now expecting to be profitable in Q3."
The came up short in the revenues by about 10% - not good, but it happens. The big one to me is the statement that they could break even at $23-25mill in revenue. This was disputed on the thread by both Zeev and myself, and appears to be way off the mark. I think they will need revenues on the order of $30million to break even. It is really bad to provide this sort of mis-information to analysts because it makes them look bad (if they believe it).
Carl |
