<<Let's see, you folks are simply impressed because of the price,
right?>> -- From Barb
Wrong. Nortel buys Cambrian to acquire a Metro DWDM for $300 Million
Echelon IPOs for $200 million market cap, now down to $100.
NetSillicon is strictly better and the net rumor is that NetSillicon
has eaten six of Echelon's customers. The Hong Kong factory will
sell for an estimated $30 million. Osicom will let it go because
the margins are only 20% and because it will help business and the
share price for Osicom to have $30 million cash on hand.
I value Osicom at $530 million, or $58/share, minimum. When it
gets to $58/share, it will be clear that it is worth far more.
<<I can't see anything that significant in the filings that
merits this increase on a fundamental level. >>
There are no filings because Osicom no longer finances by
diluting their equity. Osicom has a new line of credit
backed by the strength of their balance sheet. Osicom
has redeemed $750,000/month of the convertible preferreds for
each of the last two months and made a clear statement that this
practice will continue. This cash came out of current gross
income. Fourth quarter will have dramatically increased revenues
and the earnings loss will be near zero. (positive or negative)
<<I have noted all sort of garbage companies have been running up
recently.>>
Implying that Osicom is a garbage company and that the run up
is spurious.
<<One should never allow the current price of a security
to validate a position. >>
Good advice.
<<The 'old' news you refer to from Auric has to do with the
character of management. Since it's the same management, it's
not old news.>>
Until last summer, Osicom used equity dilution to build their
new businesses. The character of this practice has changed and
they are focused on reducing the shares outstanding. They have
kept every technical promise and achieved their business goals
for the Gigamux and NetSillicon. Furthermore, each of the
Osicom divisions has new management.
<<I notice that that the rights offering seems to have been delayed.>>
Cancelled, thank God. If Gigamux and NetSillicon are IPOed, it
will be a traditinal IPO of about 30% of each company sold to
the public and the remainder distributed to the Osicom shareholders.
<<Yet another quarter where revenues got pushed into next
quarter. It seems like that's the story every quarter, yet
every quarter revenues decline.>>
Third quarter revenues were very good for the giga-toaster. There
were some nice sales in situations where fiber was exhausted.
Belgiacom bought gigamuxes with no evaluation period due to
pressing need.
Fourth quarter will have dramatically increased revenues
and the earnings loss will be near zero. Gigamux and NetSillicon
earnings increased last quarter. Gross margins improved.
<<I'll probably see if I'm able to borrow shares on Monday. I
believe it's time to start building a short position in this dog.>>
If you are already short, then your posts are immoral.
If not, call them as you see them, go for it. One genuine
contribution would be to report back if any shares are
available and from whom.
Joe Hoane
I hold a long position in Osicom. |
