IMPX - When Will the Dead Money Awaken? Message Board

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Technology Stocks : IMPX - When Will the Dead Money Awaken?

IMPX 6.210

+13.3%

Oct 22 3:59 PM EST

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To: Tom Terf who wrote (167)	12/31/1997 11:57:00 AM
From: slob	Read Replies (1) of 532

Tom, looks like you called this one correctly. I've decided to step back and take an objective look at IMPX again. I'd like to hear from some of the Bears as to why they think IMPX is headed down the CH11 path. Clearly it is being discounted way beyond last Q's results. It seems to me that Worst case revenue for Q3 will be $7M. Assuming this our worst case loss for the 3rd Q is about $4M. This still puts IMPX 3Q's away from Ch11. As for new products I still like the direction that they are taking however, it is NOT a path that will result in a quick fix. Basically its new products are "Catalog products" so they have a very slow revenue growth when compared with OEM products. The good news is that "catalog products" normally have margins of 60 to 70%. It seems to me that using very conserative product design-ins IPMX's revenus for the next year would be $7MQ4, $9MQ1, 11MQ2, 12MQ3 and $14MQ4. Earnings for each of these Q's would be -$4MQ4, -$2MQ1, -$1MQ2, $0Q3 and $2MQ4. This would represent IMPX being 100% changed over to new products by 1999. The only real danger that I see is that IMPX will have trouble supporting the needed revenue growth in Q3 and Q4 of next year, due to the losses in the next few Q's eating into Current assets. So worst case we would be talking about issuing $5M in convertibles in Q3 of 98. I'd like to hear from some bears if you think my worst case is under stating things. Slob

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