I was surprised that WS reacts negatively to the changes announced today. The departure of Thomas and White, IMO, is good for the company going forward, given the mess it is in. Three guys (Witous, Thomas and White are co-founders) trying to run a small company can be counterproductive. Ego always gets in the way. If Witous is a smart guy, he now has complete control of the company and can focus his attention on turing it around.
I'll call the company to get more information on the indirect distribution model.
The anticipated loss for Q3 should not be a surprise. However, the magnitude of the loss may be higher than the consensus (0.28) because there will be one-time charges related to personnel reduction.
I have witnessed a few companies in similar situation to TEAL. If one looks beyond a period of panic and turmoil, the stock will eventually trade above its cash level. With the new cost reduction and resources conservation plan announced today, I hope the company's cash cushion will be eroded at a slower rate. As of Sep. 30, cash stood at $3/share.
As TEAL's products are considered "excellent", and have received rave reviews from trade magazines, the chance for a turn around may not be so tough after the internal cancerous tumors have been removed (at least that's what I hope).
Regards,
Tom |
