JDN, I am in agreement with your analysis, that pending shareholder litigation is not the major factor in the market's current valuation of Command's share price.
a) Other then the improper share registration issue for which Command is being held harmless by their attorney's, the legal case against Company is very weak.
A review of the prospectus clearly communicates all of the associated risks as well as the shift by Command toward project orientation that was already underway prior to the IPO.
The suit is a typical "shotgun" approach, naming as defendants both of the IPO underwriters, Volpe and Cohen, as well as Command and it's officers......The greater the increase in the size and number of pockets, the greater the chance of an out of court settlement.
As you have noted, it is also quite possible that in the event of settlement, Command's insurance carriers would be responsible.
(b)Trading indications the day prior to Q3 earnings clearly reflected a significant upward bias in share price if Command were to have hit the .04 earnings estimate for the qtr.
If Command had reported .04-.06 a share for Q3 it is quite likely that the stock would be trading near double where it is today.
Thus, rather then shareholder litigation, it is my opinion that results of operations, combined with the lack of management provided Company insight are the main factors weighing on current share price.
SHARE PRICE PERSPECTIVE:
During the 9 months ended 9/30, Command increased revenues by over 50%. They have done so without burning up proceeds from the IPO.
Current assets (consisting of cash, A/R, and prepaid expenses) less ALL liabilities.
Per share value as of:
3/31/98...$3.08
6/30/98...$3.03
9/30/98...$3.01
There has been little change in this key measure of Command's economic health & wealth.
Given the sizable growth in revenue, combined with virtually full asset retention, the very first glimpse of any positive news or positive earnings, should result in a substantial increase in Command's market value and corresponding share price.
Best Regards, JAB |
