Dwight,
I think you'll see that I used the term "book value" loosely. What I meant to say was per share stockholder equity, which may be different. Sorry, my gaffe. SE should be the best guess at the breakup value of the company which I would call book value; the official definition could be different. Any accounting types out there want to ping in, feel free.
It's hard to get a good idea of what the fundamental value of the stock is (I know, you'll say 0.00 :-). Jerry seems to like this cash flow model may be as high as $0.20/share in FY 1998 if Q3 is any indication. (Taking the Q2 - Q3 trend would put that value at ~$1.00, but I don't see the 2.4M per Q improvement sustainable. To quote Newtons 4th Law, "Things that are unsustainable have a tendancy to stop.")
As for working capital (current assets - current liabilities), I predict that it will be positive at 31 Dec. 1997, but less or around $1M.
What we need is LS and IWN to bring in enough revenue to break themselves even.
I see we hit a low of 5/8 today intraday on 250K volume. I don't see a move below 1/2; we can easily be back at $2 by summer if Q1 and Q2 look good and a 6 mos 4 bagger is very attractive.
BTW, I was not able to find a text copy of a plain english summary of Reg. M at the SEC, LOC, free-edgar, or from a search. You'd think that these regulations would be online by now somewhere.
Cheers,
Rich |
