Hi Chris.
I was short this stock several months ago and had to close out in order to chase a better prospect at the time, and I never got back to this one, although there might be some dumping coming sometime in Nov., due to an S-3 filing, if I remember correctly, that might make this worth reconsidering from the bearish position. Dang, I just wish I had some free margin at the moment. :-(
Anyway, I'm not up on the details, but those deals you mention may simply be stuffing the channel at this point (check their revenue recognition policy in the 10K, if you're interested). Also bear in mind that the actual sales figures for these deals are fairly small, although their recent reorder deal was for $500K. Anyway, make sure you study the filings and add up the revenue figures from all the PR announcements they've made the past few months, and then ask yourself if this company is really worth the $50 million it is currently bid at in the market place. Remember that their revenues for last quarter, even inflated with the barter credits, was shy of $2 million, so that gives a generous annual revs. based on that run rate of $8 million, which in turn gives us a whopping PSR over 6- and for what? A company that makes gum and goes negative cash flow in doing so. There's gotta be a better place to put your money, IMO. Again, I've been wrong lots of times before, and maybe I'm all wet on this one, but them's me thoughts. :-)
Anaxagoras |
