So 1 officer is leaving
1. It has not been just one officer. Rather there has been a persistent flow of personnel from senior and key positions who have left.
2. The Chief Financial Officer is a critical position for any firm. It is more critical for a firm that is operating with negative working capital. The latest financial information advises that even after the recent financing, the company continues to have negative working capital. That means their cash flow is a serious problem. It means short term liabilities exceed short term and liquid assets.
3. There is no information that would suggest a smooth transition in the leadership of the CFO, a key position. No mention of a replacement. It suggests that this decision came unexpectedly. That is unfortunate for the company at best.
4. Red flag after red flag pops up with this company. It is painful to sell at this price after this long suffering wait. That is understandable. Just ask yourself whether you would have held on to the stock if you had known last December everything that you know now. if you can honestly look yourself in the mirror and convince yourself that you would have held on regardless of what has happened, that is one thing.
If, on the other hand, you decide whether you would have sold then, the next question to ask yourself is whether you would buy it back right now. If the answer to that question is "no," then you should sell it now.
fred, mooter, and paul have represented their certainty (or was it just near certainty?) that material, significant contract revenue will be arriving this month. Earlier they had represented that August or earlier would likely yield a material contract. You now know that was not accurate. If they are right about september or october, then the cash flow problem will be reduced. Your problem is that their track record regarding revenues and contract awards has been very poor. If there is no material contract in september or october, then you will have a better idea about why Archibald left now. Its your choice. Spin it howver you will. |
