Nasdaq market is regulated and has better liquidity, whereas the bulletain board is the wild west anything goes. If a stock is delisted from a regulated market, it's value to investors will go down because of the higher risks entailed with a bulletain board market.
Working capital is current assets minus current liabilities. Positive WC indicates the company has the ability to meet current financial obligations. Negative means it doesn't. RNTK does not generate enough cash to meet its current obligations. I believe it goes through $800,000 cash per quarter. Therefore it must raise money by issuing shares in order to raise cash. The more shares that are issued, the less % ownership a shareholder has. This is called dilution. RNTK dilution will continue until it makes an acquisition that will generate cash. I don't know why RNTK is taking so long to do this. I hope they just buy a company, any company, I don't care what, because this company could have already bought a company for all the cash it's already raised by selling shares to pay for obligations. In the event RNTK can not raise cash to meet current obligations, it will go bankrupt. This will probably never happen in my opinion; the company will just continue to issue shares to raise money.
With that being said, today is a really stupid day to sell RNTK. Everything looks bad today, the market's down, RNTK has not announced anything of significance for a long time, SLHO is down. It is just a matter of time before RNTK does announce something of significance, then the stock will goe up. When will this happen? I don't know. This may be the time when you want to get in, depending on your risk tolerance. Maybe you want to wait for under $1.00 or under $0.50. Maybe it will get there, maybe it won't.
SLHO is down because of a sell short article this week in BusinessWeek magazine. It is ridiculous the media affect -- up 10 points with WSJ article, down 7 points with BW article. IMO, fair value of SLHO is $20-25. IMO, SLHO will soon rebound. So will the market. And so will RNTK in sympathy. Maybe not. Who knows.
I still like the risk/reward: Assume SLHO goes to $10. That implies a market valuation of Syntroleum of $300 million. Assume RNTK shares outstanding goes to 50 million from 35 million today. Assuming RNTK should be equal to SLHO once it gets its act together 1-2 years from now, that gives a RNTK potential stock valuation of $6 1-2 years from now. If SLHO goes to $10 I will eat my hat. Since I don't own a hat, I will go out and buy one and then eat it. If SLHO is at $30, this could imply a RNTK valuation of $18 on 50 million shares. In the short term RNTK could go to $0.03 or $3.00. I don't know. I am confident in long tem however. That is why I continue to hold even though RNTK has been moving at an ultra slow snails pace in improving its financial condition. What is going on over there? What is going on? It really is annoying to be strung on like this.
BTW, I will vote yes for more options. I am not happy doing it, but what the hey. They stated in the annual report they hope to hire 8 more employees this year. I don't want to hurt their chances of hiring more people. I don't want to spite the trees for the forest, or whatever. I don't to damage the horsehoe and ruin the battle, or whatever. You get the point.
I do not guarantee the accuracy of this information. The above are solely my opinions, not facts. Assume I am 100% wrong and invest at your own risk.
Good luck people
Schopenhauer |
