I think I know why you are "totally confused". You failed to properly read the February 3rd news release. The company did not state that earnings of 4.75 cents was based on 20,328,043 shares outstanding. They said that they are "...on target to post earnings of 15 cents per share for the first quarter of 1997, based on average weighted shares outstanding of 20,328,043."
Do you know the difference between current shares outstanding and average weighted shares outstanding? The average weighted shares outstanding is the average amount of outstanding shares over the course of the year. All companies report their annual earnings based on average weighted shares outstanding, since the earnings occurred over the course of the entire year and the outstanding shares varied over the same period. This is why the number does not agree with the 21,348,356 "issued and outstanding" snapshot in 9/30/96.
So then I suppose you would argue that they should not be using 1996 outstanding shares average for the 1997 first quarter estimates. That would be a good point. So if I took the 15 cents per share for 20,328,043 shares and divide it into 22,000,000 (for argument sake) then we would have an estimate of 14 cents per share. Still, a hell of a profit if you ask me (and splitting hairs, if you also ask me).
The other item that you should not be confused about is stock dilution. It is obvious that the Company is issuing restricted stock in exchange for ownership of companies and properties. Of course it adds more stock to the outstanding numbers. But what you failed to mention is that these companies (the jury is still out on IMXS) should also contribute to the earnings. For instance, Genesis has said that they expect each Motorsport Travel Center to add 5 cents to the annual earnings. If the Company builds out twenty of these centers (their goal is 30), and they only meet the expectations half way (2.5 cents), Motorsport will add 50 cents per share of annual earnings (20 centers x 2.5 cents).
You are a numbers man, so I hope that I do the following correctly. If the Company currently has 22,000,000 (remember, this is for argument sake) shares outstanding and expects to earn 85 cents per share in 1997 - no, make that $1.00 per share because of the CRIC sale - and they had issued a large amount of restricted shares for Motorsports, Muzzle Loading and Cyberdirect. Let's say a ridiculous amount like 10,000,000 shares. $1.00 per share for 22,000,000 shares would work out to nearly 70 cents per share for 32,000,000 shares. Wouldn't 70 cents per share be good earnings for a $2.00 stock? (And this is looking at it in a pessimistic way) And these numbers do not include the earnings generated by the complete build out of all Motorsports Travel Centers. The thirty centers will probably take a few years to complete.
As a matter of fact, I would not be surprised if the Company had not issued any stock in exchange for their interest in Motorsports. They could have easily received a 40% interest in exchange for their help in financing the enterprise.
I wouldn't care one bit if the Company issued all of the stock that it is authorized to. As long as it is making money, it is a great strategy for acquiring profitable enterprises.
Al, I'm not sure if you were the one who was concerned about the Company selling its core business. But I will address that here anyway. Genesis is a HOLDING COMPANY. Holding companies buy and sell other companies. Genesis decided it was in their best interests to sell CRIC. Why do people have a problem with this? Is it because they do not understand what Genesis is about?
I have invested in Genesis - not in their stock. I do not day trade, I am an investor. This means that I have researched the company, talked to their management and employees and I have decided to invest in them. That makes me a part owner. This is my motivation in participating in this thread. I am tired of people on this thread bashing the investors. Is the stock market there for the whim of the daytraders?
I do not care what anyone else says, but everyone who participates in this thread is either a kid on a joy ride or someone that has some financial tie to this stock - whether it is an investor such as myself, or a stock shorter hoping to scare the price down, or a day trader trying to create wide price swings or someone who would like to see the price move down in order to buy in cheaper. |
