Gary,
I also viewed the conference call very upbeat and was very reassuring that all the expectations that I spoke about last February will be realized. You asked why it did not react in a positive manner, and I think Vic hit it on the head, tainted merchandise, street vendetta, lots of baggage, whatever you want to label it as.
Let relate a story from another stock, Comverse Tech. (CMVT. They had just completed a reversal and were starting to tag on some menaingful contracts (million +), the stock was moving up rapidly from the 14 level to $20 and had nothing but positive growth and earnnings to boot. Then they decided to do a second offering, the stock was trading at $20, yet they came out with the offering at $17, BIG MISTAKE. Over the course of the next 18 months, they continued to come out with contract after contract, revenues and earnings soared, yet the street kept a lid on them and never allowed them above $14. Vicous and unforgiving for costing the big boys $3.00.
DROM's stellar climb from .81 to over 8.00 cost a lot a MM's money as they shorted and averaged on the way up. Not to mention the big drop on May 1st from 3.50 level to under 1.00. This all is excess baggage that cannot be overcome from "would be's, could be's". It's going to take not only the USGA but also, hard signed contracts from known advertisers to get this puppy moving. I'm not saying that it won't move up on the USGA installation, what I'm referring to is the big payoff. I would expect that we will see $1.38 on confirmation of a scheduled rollout for installation with USGA, then climbs up the staircase on the announcements of credible advertisers. But, it's going to take real earnings showing up the bottom line to really make this show the big price appreciation. All that separates us from that is, TIME. So, if you have time and the patience to withstand a lot of turbulence, I still feel DROM will reward you in a big way. It will serve both the trader and the investor, but it's the investor that will really reap the big return and at this under $1.00 level, it has a great risk/reward ratio. I continue to hold and I'm in over a $1.00 looking to average down.
Oh, BTW, I almost forgot, I found out that the $6 mill of reves for the fiscal year will come from the installation, not the adveritsers revenue. Seems they have a very well structured profit margin that will contribute to free cash flow, just from installing the kiosks.
It will also contribute to attaining assets quickly and great tax carry forwards.
Hope this helps,
rb |
