Re: Securities lawyers
Every once in a while, securities lawyers provide a useful service by discouraging executives from making misleading statements and making millions selling the stock at inflated prices. Every SystemSoft investor owes it to himself to get a copy of the complaints from the law firms and deciding how likely they are to win the case. However, as you pointed out, you're unlikely to recover your losses, so the lawyers and Angelo will be the only winners.
The SystemSoft situation is grim. Last quarter, they had $10.7m in cash and they're going to lose $5.0-5.9m more this quarter. At this rate, they'll run out of cash next quarter. In addition, their payables ($7.8m) are higher than their receivables ($6.3m), so their creditors are on their back, too. On the bright side, the lawyers might drop the case because you can't squeeze blood from a stone. I hope they keep after Angelo because I agree with Phoenix that he's a gangster.
The layoff of 23% of the work force is a good start, but the revenues are less than 1/2 the expenses, so losses will continue. More layoffs are inevitable and will continue until the company is profitable.
At the current price (3), the market cap of SystemSoft is $80m. That's 3.3x book value and Phoenix sells for 2.1x book value. When will the price of SystemSoft drop to something reasonable? Will investors ever give up?
I'm happy that you've finally thrown in the towel and I'm sure you'll be happy with your decision in the coming months. It's a good thing you were still able to get a good price. I hope others follow your lead and SI continues to build a reputation as the best source of stock info and discussion. Our system of capital allocation is extremely inefficient and I share the vision of the founding Dryer brothers to make it improve.
Good luck with your other investments. |
