My understanding of the current situation is as follows:
(1) Company has received many calls from irate investors regarding CR's 144 sales, which I am led to believe were concluded early last week.
Company maintains these were entirely for personal reasons and fulfilled earlier commitments to create a modest amount of liquidity once the lawsuit was settled. I am led to believe the 50 k shares represented all that will be sold for some time.
I believe the noise generated will push the company to stop fine tuning the process and get on with production in Q1, as previously advertised.
(2) Company spokesman, who felt that the stock was "a little ahead of itself" when the stock hit $ 10 in June, now feels that stock is substantially cheaper given the continuous progress made and being made on lines 1 and 2.
(3) Company is still confident of Q1 production startup.
(4) OEMs need to fix production quantities for 1998 and VLNC needs to get started inorder to receive $ from Ireland and review financing alternatives. Personally, I believe that by 2/15 company will have started production and announce OEM contracts.
(5) Most significantly, Italian line 3, which has received belts alluded to earlier, has been able to increase quality production from 50%
of "normal production" to 75%-80% of normal production capacity.
Further improvements are expected, but if this "fix" can be translated to Ireland's line 2, then, along with the startup of the coating/laminating equipment, it implies a very high probability of a Q1 startup.
I remain very bullish on the company's prospects for 1998 and am not at all concerned by the selling, whether it be for tax losses, margin calls or portfolio window dressing. |
