Ed:
While I agree with your conclusion that initiation or continuation of an investment position in Abacan at this time must be considered a speculative gamble, I must disagree with a few of your points.
First, the Altman Bankruptcy Predictor model is independent of any change in capitalization resulting specifically from a forward or reverse split (other than what the market does to the stock price thereafter). Since the five factors in the model are each made up of a ratio of two overall financial measures, the formula is blind to the specifics of equity capitalization other than its total. At the time of split there is no change in the numerator quantity of X4 (i.e. 1/10 the number of shares multiplied by 10X their pre-split value). Therefore, I do not believe that use of the model would be effective in picking a more ideal reverse split ratio.
Second, I cannot totally agree with your comment and that of others being critical that the annual report did not announce further detail on the sensitive ongoing negotiations to try to save the company. Such comment is inappropriate for an Annual Report, the basic format and content of which are set by SEC standards and common practice, and the theoretical intent of which is to provide a status of the company as of the close of its prior fiscal year. For any positive (or negative) detail on developments or status of the ongoing company-saving efforts of Tim Stephens to have any real meaning at all, they would necessarily have to be much more current (like dateline yesterday or today) than possible for inclusion in the Annual Report, which necessarily was completed weeks and weeks ago, or in the even more regulated proxy statement.
Further, IMHO that any undue comment by the company on such sensitive negotiations as those with potential buyers of major assets or potential investors considering funding the life of the company for a while so that it can realize some value of its assets, could only serve to undermine such negotiations.
Third, IMHO that the comments made by Craig and others implying that non-disclosure of additional, specific detail implies that Mr. Stephens is engaging in delaying tactics principally to afford himself the opportunity to collect a few weeks extra salary, are unwarranted and incorrect. We may not know exactly what subjects are being discussed, and may be relying somewhat on both E&P industry and financial community rumor sources to provide information on which to speculate about details, but the fact that Mr. Stephens is in continuing contact with a number of "potential sources of positive developments" is well known. If one has even the most minor internal estimate of a probability of being able to salvage something, wouldn't you want a recognized industry pro (now assisted by a couple of other recognized "names" as Board members) to be out there negotiating, rather than leaving the chore to the office boy or a junior accountant?
Although I have clearly expressed my frustration numerous times at the company not being able to make any clearly positive moves (other than surviving), I really don't think anyone can say that there is evidence that the company's management has sat back and done nothing but collect salaries.
I agree with you that there is some chance of turnaround, or at least more positive outcome than present, and I agree that participation in stock ownership at this time is speculation, and I agree there are probably things that in hindsight should have been done much differently, but given where we are, and given our limited abilities to evaluate or verify activities or rumored developments, those that are invested in the company have little choice but to try to support and encourage management in its efforts to move things forward to a more positive situation. I also agree that people should not expect the Annual Meeting to be a forum for the announcement of spectacular developments. To those that go, it can, however, serve as one more input item to help one determine whether its worth continuing to take a shot by hanging in with management's efforts or to "cut losses and bail out".
Just my opinion. Apologies for the length of this post.
Steve
P.S. My above use of the terms "office boy" and "junior accountant" are purely generic. They are not meant to be demeaning of any specific management or other employees of Abacan. |
