My Response To Intrepid
This is my email response to Steve Ellis and is
courtesy (carbon) copied to three directors whose
email addresses are website listed.
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Steve, thank you for your response. Your words and thoughts are good and are encouraging. Clearly you are a professional.
I agree company failure after a reverse split is usually not related to the reverse split rather a symptom of underlying fundamental problems. I do believe a reverse split accelerates the failure of a poor quality company; a company is already failing, a reverse split adds to this failure.
As you know, Steve, there are 'buzz words" within our investing community which invoke a near superstitious reaction bordering on "taboo" notions.
"Cornell Capital" is taboo but not as bad as the Hicks brothers out of Texas. Mention a "1:100 Reverse Split" and investors make the sign of the cross. Word of "SEC Inquiry" will cause Hetty Green, Witch of Wall Street, to roll over in her grave, if not simply scream. Some words related to our stock markets are very taboo.
I disagree with this common notion of raising share price through a reverse split to attract and enable high-end investors such as mutual funds and others.
This premise of raising share price to enable high-end investors is a sound principle when performed at the right stage of company development. Intrepid is not at the right stage of development. Over the decades I have noted companies using this reverse split method to list on the big boards, but many of those companies do not or did not have fundamental support for this type of move. Quite often, after a big board listing via a reverse split, share prices begin to fall because of poor fundamentals then, in time, the company is given a delisting notice and delisted. This almost always leads to a share price "death spiral" eventually destroying a company.
Intrepid does not yet have the needed revenues to support a move to the big boards. This is not so much related to black ink nor red ink rather is related to the underlying fundamental health of a company. Intrepid is simply not a big board player, not yet.
Not being a big board player is evidenced by a need to secure financing through Cornell. Yes, funding is needed and often funding is difficult to secure by developing companies such as Intrepid. Other evidence of not being ready for the big boards is relatively small revenue generation; millions of dollars of revenue is needed to play on the big boards. Again, profit or loss is not important as underlying fundamental health of a company. Fundamental health is directly reflected by degree of revenues.
The Intrepid board of directors have stumbled into two taboo words within our investing community, "Cornell" and "1:100 Reverse Split."
I understand Cornell is not the number one choice for lending but there are other lenders, of not much better quality than Cornell but little known, other lenders affording the same high risk terms, other lenders with names which are not taboo.
"Investor Perception" is what makes or breaks a company, any company from Microsoft to Enron. Microsoft does ok because of good investor perception. Enron, well, we know the story; really bad investor perception.
Intrepid, having stumbled into taboo words, has altered investor perception to a viewpoint which is less than desirable. "Cornell" and "Reverse Split" are taboo words which cause investors to shy away. This abandonment by those investors, sometimes, is not justified. Nonetheless, these taboo words are very powerful and do affect investor perception.
"Investor Perception" is what makes or breaks a company. Investor perception is your source of funds or lack of a source of funds.
Words are powerful, dangerous, even fatal.
To close, Intrepid is not ready for a move to the big boards because of a low amount of generated revenues; fundamental support is lacking. Being associated with Cornell is harming Intrepid. Mention of a reverse split is equally harmful. Intrepid has many positive points and digester technology is coming of age. The board of directors needs to learn how to sell Intrepid through carefully chosen buzz words, needs to sell Intrepid based on future potential, which is what sells me and others.
Slow down, you are moving much too fast. This reverse split, plans to move to the big boards, I am absolute certain will destroy Intrepid. Publish news about successful development and testing, afford news of future potential and potential future customers. Speak of how this digester technology is coming of age and will add to a "green" future for America.
Leave alone reverse splits and the big boards until the right time.
Our family supports Intrepid and we hold a lot of shares. We are happy but do become very annoyed when Intrepid tosses out those taboo words. Others are not as patient nor see as clearly, your future potential.
Thanks again, Steve, for your professional and encouraging response. Such a quick and timely response is rare. I can tell you are a professional, a valuable asset to Intrepid and you truly know your cow crap.
Regards,
Okpulot Taha (Kira)
Choctaw Nation
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Purl Gurl |
