Hi Jaime....
I have no idea what you mean regarding "notes from Rover."
The 12% notes were exchanged literally within the last 30 days, so it isn't as though the company's financials are "stale." Negotiations have been going on in that area for some time, and the new rate represents an interest SAVINGS for Simula.
As for SMU's "financial condition", they will be approximately breakeven in the current quarter as announced just a few days ago. Capital expenses next year will be relatively small, so there are precious few demands on the business in terms of cash generation.
We also know that the airline seat business, while still having problems to be sure, is going to have a large increase in revenues next year. Almost certainly, because of industry capacity constraints, this will lead to price increases for 16G seating.
Even if management can't totally fix the problem (and eventually it will be fixed, of course, either by the existing team or a new owner for the entire company if/when Stan gets disgusted of seeing his life's work priced this poorly in the public markets), there is no reason to believe that the 16G business...replete with oligopoly pricing...shouldn't return positive cash flow.
And, ITS continues to gain market share and grow revenues.
Discussion of survivability issues is ludicrous now. Company PR is handled ineptly, to be sure, but that really is irrelevant to underlying financial conditions. The major problem in this stock is what everyone understands it is: credibility. It isn't as though it is a state secret.
The ITS division **alone** is worth more than twice the entire current capitalization. The most important issue here is for management to get the airline seating business under control. Hopefully, the new COO (Saunders) will have the talent to do it. If he does not, it is my hope that the company doesn't give too much time to finding out. Going outside for talented executives isn't an admission of failure, it is a strength for companies to recognize that they need "help."
Have a good day. |
