Rick, I have to agree with Ken (#1245). IOMG 's cash and debt "problem"
is due only to a phenomenal growth rate. All companies would love to have
this "problem", as TV analysts often call it. As long as the growth rate
remains great, IOMG will not have any problem at all raising cash or paying
off debts.
Concerning the effects of more outstanding shares (due to additional
offerings, DB, etc.) diluting the EPS and a potential negative on stock
value. Again, the effect will be negative only if the growth rate slows
down to a level that can not support the rise in # of shares. IOMG 's
current and projected revenue and earning growth should be
far ahead of the relative to real rise in # of shares.
All companies undergoing a phenomenal growth rate like IOMG faces
exactly the same "problems" of raising cash, incurring shorterms debts,
in order to meet phenomenal demands and sustain the growth rate. As
I said, this is a great problem to have, a positive not a negative.
There are many examples, but Microsoft immediately comes to mind.
You must look at where MSFT was and where they are now.
IOMG 's current and projected growth rate is much higher than MSFT
during their growing years. IMHO in 2-3 years, IOMG 's revenue should
come close to or even exceed that of Microsoft. (MSFT now has 639 mil.
shares with a market cap of 72 bils, IOMG now has 64 mil. shares with
market cap of 3 bils. Current price/sale ratio for both is around 10. But
IOMG 's sale growth is >400%, while MSFT is around 30%. Do your
own calculation on potential market cap of IOMG 2-3 years down the
road. All of this of course, rest on my believe that IOMG will continue to
have phenomenal growth rate for the next 2-3 years.
One of the great thing that IOMG has is a great management team of
very smart and financially savvy leaders. Based on their actions so far,
I think they are too smart to make financial moves that are detrimental
to IOMG 's market value and shake the confidence of the investment
community and individual investors - since these are the folks who
will provide financing to support IOMG 's phenomenal growth.
You are correct about stock price lives or dies by quarterly EPS. But
those who are in for the long run will win big, and those are in for the
shorterm can lose big. I am in for the long haul, so I am not too
concerned about potential of one bad quarter, especially if it's due to
having to raise cash to sustain the growth rate. But I don't believe it
will happen.
Sorry for being long, but the issue is not easy to grasp. |
