GIFS Message Board - Msg: 825812

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Microcap & Penny Stocks : GIFS

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To: Mark Rutheiser who wrote (2236)	2/14/1997 9:03:00 PM
From: craig crawford	of 8012

Mark, I appreciate the response, but I find this hard to believe. I will eat my words if someone can produce to me a legal reference that states that BB companies are not allowed to make purchases at regular intervals because they deem their stock undervalued (at whatever price). If making it clear that they are pursing listing is what makes it 'illegal' to buy above $3 why didn't they buy them back w/ out applying for the listing.. This seems like a bad strategical move to me. Also on Oct. 22 GIFS CEO said he expected mgmt. to release a progress report of the co. stock repurchase program by the end of the week. It is now Feb and I have yet to see a press release reporting the progress. I think I've got a handle on the (CRIC) sale now. I did a little reading (just glossed over the report before) and have come to the conclusion that the sale is just a bunch of money and paper shuffling (IMO). We can already assume that GIFS will not receive $117 million in cash up front. If this was the case I'm sure Mr. Rhetorik would have made this CRYSTAL CLEAR in his discussions with posters on this thread. It would also have been prominently highlighted in the press release. We can assume they will not be receiving any stock for the transaction because it would have been mentioned. What kind of consideration does that leave for the sale? I failed accounting(yawn) in college so if someone disagrees with my conclusions feel free. The release states a fully collaterized international (not relevant) promissary note, long term consulting contract, international security agreement bonded by major european carrier (don't know what this is) A promissary note sounds like an agreementt promissing to pay x amt of dollars within a specified time frame. It doesn't sound like GIFS is going to receive all $117 million up front. There wouldn't have to be any collateral if the buyers handed over all the dough. Doesn't that make sense? I multiplied the 58 cents times 9 years and added the 43 cents for this year. (All in the press release). This adds up to $5.65 worth of earnings/share over 10 years. Multiply the $5.65/share times 20.5 million outstanding and you get.... ...you guessed it. $115,825,000. I assume that it doesn't exactly hit $117 mill because of rounding. Remember that the majority of GIFS assets are being given to the buyers of (CRIC). It sounds to me like GIFS traded book value away for earnings growth. I'm sure that most of the assets used to guarantee the performance bonds are going away with CRIC. Summary: At first glance it may seem that GIFS received $117 million worth of something (?) plus $5.65 in earnings for 10 years. That would total $230+ million. Why would anybody pay this much for a CRIC when they could buy all of GIFS for around $40 million? 20 million shares times $2. Of course this is assuming that they could get their hands on the shares but I think you know what I mean. SOMETHING IS NOT ADDING UP. C.C.

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