To John and All,
I have been traveling extensively for several weeks and it was impossible for me to follow the conversation regarding AGTI, so I'm playing catch up today. Regarding yesterday's press release, I am somewhat dumbfounded by the market's reaction. I think Colin is largely correct in his analysis. To me, the news was excellent for AGTI and reading between the lines, I believe this acquisition gives our company a much greater market exposure than was previously possible. Rather than fight with this yet-to-be-identified competitor, AGTI has apparently decided to join forces. Smart strategy. AGTI places superior technology on the table, and I'm assuming that Company X places a superior embedded base, superior customer contacts and so forth. Company X may also provide us with expanded manufacturing and distribution capacities, a bonus which would eliminate my personal concerns regarding the ability fo fill future orders in a timely manner.
John, I certainly understand your distress at the diluting effect of 25 million additional shares, but I'm looking at the other side of the equation. What value are we deriving for those 25 million shares? It appears as though we may be instantly profitable from this acquisition, not to mention the expanded client base. And as I see it, AGTI could have truly diluted existing shareholder value at any time by merely issuing more of the 150 million shares which are authorized. Instead, we are gaining a large, profitable addition while eliminating a major competitor in one fell swoop.
The management of Company X obviously feels there is some advantage to AGTI technology and a higher future worth in AGTI, or they would have negotiated some method of payment other than shares of AGTI stock. This variable alone should be a major rallying cry for all of us existing shareholders. As I said before, I think this is a very intelligent move by AGTI management and gives me reassurance that we all DID make the right choice among the various contenders for this enormous market.
I LIKE what I am seeing right now, and I increased my holdings yesterday as a result. John, you said you saw a 10K buy at the end of the day. If you saw a 32K buy early in the morning, that was mine and it occurred before the stock took its dive. Until today's impulsive market reaction, our share price was definitely headed in the right direction and I am confident it will continue to do so in light of the latest press releases. I think yesterday's reaction was caused by panic in a nervous market, uncertainty about the impact of the press release, and profit taking by those folks who were lucky enough to buy shares in the $.20 range.
Another thought: with the positive developments of the news release, reverse splits may become a secondary issue, IMHO. Maybe I'm a dreamer and overly optimistic, but as I understand it, the idea of a reverse split is to gain additional action on the stock by qualifying AGTI as a NASDAQ small cap, as opposed to bulletin board issue. On that premise, my shares and those of my partners would likely vote "yes" on a reverse split. However, if the acquisition is as significant as it sounds, we can now beat our drums about earnings and market presence. This draws attention to AGTI stock in a more "positive" way and may ease the pressure for a reverse. I've been wrong many times before, probably wrong again, but that is my opinion.
Finally, in addition to the above, I have not yet heard an outcome from the Indian Gaming Conference -- but I'm hoping we may get a few good orders and lots of good PR as a result. If anyone has heard anything, I would appreciate your feedback.
Keep the faith! I said it before, I'll say it again...AGTI represents a classic, textbook example of the risk/reward factor. Many of the stocks in my portfolio are rather boring, although I'm very heavy into the tech's and biotech's. I have been fortunate to see doubles, triples, quadruples in a relatively short time frame. But AGTI is the most exhilarating stock I own (maybe ever owned?) and it is going to be my grand slam. My patience is sometimes short, but my intuition is seldom wrong.... :o) |
