Dear Don,
you have certainly injected a significant amount of
optimism to this thread during the last few days!!
(although suggesting that October sales were huge without
further information could be better characterized as
hype).
In a growing business, every new juncture brings uncertainty
to long term shareholders. The purchase of Nautilus has
been greeted with alot of negativism on this thread, I
felt, because Nautilus isn't exactly a cash cow. But rather
than view Nautilus as a money losing proposition, I think
DFX viewed it as an orphan! DFX is growing so fast that it
needed East Coast facilities, I think mostly for the manufacture
of their beds. Furthermore, DFX may have the intention of
selling a souped up version of its Bowflex machine to exercise
clubs and brand it under the Nautilus name. In this sense, Nautilus
was very attractive to them. Thirdly, Nautilus may allow DFX
to expand beyond the confines of the North American continent.
This is something that I think was mentioned in the original
DFX news release but not mentioned in this thread's discussion.
And DFX has demonstrated that they are savvy managers: don't
expect them to idly look at losses pile up from Nautilus... They'll
probably clean things up pretty dramatically.
And now for what I think is the main reason not to worry: DFX
isn't exactly trading at a p.e. of 200!! Actually, the p.e. is
so low I've stopped considering it. My point is that this company
is already trading as though it will not succeed!! (something I
strongly doubt). So even if Nautilus takes some time to integrate,
which may be the case, the positives of this acquisition strongly
outweigh the negatives, when one takes into consideration the
current valuation of the company!!
best regards to all DFX shareholders
Trilobyte |
