HEADER:EVERYONE MUST READ:GREAT DD BY TIM P. (A NON-SI DD MEMBER AND LURKER)
Bill,
How are you doing ?
Just wanted to get back to you regarding my impression of Jack & team
(talked with him this week) and to add my two cents in response to
some of the messages that have been posted by "jhild" and "wireless
wonk". I agree with most folks that it's best to ignore them, but I
felt some of their points were well-written and convincing, but still
inaccurate or based on material taken out of context.
I) In response to the "cleverly worded" press release that estimates
fair market value at $ 2.85/share, wireless generated a cleverly
worded post (#1480) that I thought merited some detailed reponse:
1) the $2.85/share estimate does include G&A expenses and most-likely
reclamation and taxes;
2) federal and states taxes are going to minimum because of clean fuel
tax relief;and
3) most importantly, reclamation costs - any acid water runoff (from
coal mining) will be directed to a low-maintenance storage pond for
evaporation/treatment and the remaining reclamation involves
re-seeding the earth cuts where vegetation does not comes back
naturally - low.
Also, remember that USGS estimates do only represent 20-50% of what's
actually there or to put it another way, most likely there is 2 to 5
times the amount of reserve value there than what the USGS really
estimates. Numbers have to be conservative, or the USGS could receive
some backlash at a later date (like being sued because it's okay if
more is found later, not less).
II) On the huge issue of why these folks paid "so much" for a
reverse-merger to avoid an "up & up IPO":
1) The reverse-merger was around 0.04/share and from what I
understand, the shell owners retained only about 7 million shares or
less: that's about $ 300,000 (0.04 x 7M) - very reasonable considering
what a investment house would charge to go public. Also, as a bonus,
ICVI did have some positive accounts.
At the time of the reverse-merger, the shares were valued at $ 0.04
each, not 2.85 because the ICVI guys from what I understand, got them
immediately and ICVI was dying - so what's better, to receive 300K for
the name or have nothing later ?
Also, despite the potential of MTEI, I'm sure that they could not be
convinced that their company could be worth $ 2.85 a share and
therefore they should accept only 1/70 (2.85/0.04) as many shares in
the reverse-merger;
2) The extra dimension of time - an IPO or the process involved in
going public takes 6 to 12 months and right now fuel prices are at
their lowest since the mid-1980s. Since the reserve's values are
based on current market price - the best time to buy the
land-containing reserves is right now. In 6 months when fuel costs
are higher - the reserve-rich real estate will be significantly higher
too.
Understand that Jack & team have been around the block a few dozen
times, have seen these market cycles before; and therefore are jumping
at a promising opportunity which requires only a little time (actually
a shift in the direction of fuel prices); and
3) I'm not so sure ME could have done a 504 and "raised millions of
dollars" in a timely matter. I think most venture capitalist would
rather invest in high tech. or software than in a company whose market
is currently characterized by glut, low prices, and low margins.
This has been a learning experience for me. I understand the
geological/fuels concept well and I think the timing is great, but
before this I knew little of the BB market, penny-stocks and
reverse-mergers - therefore I was concerned and warned by
knowledgeable friends. But after doing my DD and talking with Jack
Uselton this week, I'm more bullish. I was impressed by Jack's
knowledge, honestly and vision. Did some background too - his
reputation is outstanding.
The current sniping seems to be characterized by misunderstandings,
using information out of context, short-term motivation, and lack of
vision. I'm remaining long-term and hoping to gain a few more shares
at discount.
Also Bill, I think it would be very wise to add more before the OPEC
meeting this month.
Sincerely,
Tim |
