Image Processing Systems (IPV-TSE) Message Board

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Gold/Mining/Energy : Image Processing Systems (IPV-TSE)

IPV 4.310

-4.0%

Jan 24 4:00 PM EST

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To: D. Peter Vanderlee who wrote (409)	8/31/1998 10:25:00 PM
From: mariner	Read Replies (1) of 658

Peter I agree they have interesting tech, particularly on the IPS side. I'm less convinced of the Tisma product. I have to disagree that refinancing will be easy. Stock issue: out of the question w/o huge dilution. Long-term debt: interest rates are rising, capital is looking for safety. Who will lend it? Convertible DBs: pretty much the same as for L-T debt. Given the huge drop in junior equities, I think the smart capital will be going towards those small companies that have been unfairly punished. IPV doesn't fit here. Their performance has been very poor. Sales are likely to slow, and they have already indicated this is happening in Asia. The marketing infrastructure you refer to strikes me as very high cost. I believe the recent quarterly statements showed a large increase in selling/marketing expenses. Margins have fallen drastically. So, where do we go from here? I believe that unless a venture capital firm jumps in with an equity infusion, that someone will take them out. The tech (as you point out) has merit. It seems likely to me that IPV simply does not have the capital to ride out the coming downturn. If they had a stronger current ratio I would not be so pessimistic, but it looks to me like they'll be cherry picked for about a dollar a share by someone who wants the technology and who has the capital to continue developing and marketing it during a slowdown. IMHO

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