Eric and Van Wang: I agree and have similar concerns about management's ability to set achievable expectations. Investors avoid uncertainty, and misleading information has certainly exacerbated uncertainty and eroded managment's credibility in my opinion.
Expectations for "...modest profitability..." were set in previous PRs. The investing public gets psychological highs and lows over PRs. Personally, I'm waiting to see some actual numbers as expected this month (hopefully, management will not attempt to extend reporting deadline). If it hadn't been for the earlier PRs regarding modest profitability, my former expectations (assumed in 3Q96) would have continued to assume modest loss to break-even in 4Q96 with turn-around later in 1997; thus, a potentially well-timed investment at $7-8/share for an intermediate to long-term, above average gain in market value. Believing management's alleged comments, I didn't expect my downside to be more than ~10%; yet, now pushing ~20%.
Once I get some numbers and am able to (hopefully) meet with CFO or other management, hopefully a more intelligent decision can be made. I might sell partial holdings, average down by buying more at today's (then presumed) bargain prices, or simply hold and selectively write some more covered calls as a means of effectively lowering break even point. From all indications of today's market value vs. my Feb97-7.5s strike-price, my current covered calls will effectively provide about 10% pre-tax return (in ~90 days) on related investment, effectively lowering original cost break-even by that amount.
Notwithstanding management's apparent inability (to date) to properly set expectations or "turn-the-corner", Isolyser is favorably capitalized and the OREX story (presumably) still offers exciting potential. I also like the idea of expanding markets and leveraging manufacturing capacity to include industrial segment. Nevertheless, especially given those false expectations, it's disappointing. Good luck to you in your investment decisions. -Kent |
