Larry, there are a number of relatively bullish signals, including bouncing from the 200 days moving average, a minor improvement on the OBV and few others, but there are still a lot of negatives as well.
The most negative element is that the Altman Z factor is negative, and that is a dangerous situation, which characterizes company on the verge of failure. I think that if VLNC can be turned around without massive dilution of the current holders, there will be ample time to jump on board. I am staying on the sideline in absence of proof that a major PO is in and that indeed VLNC can deliver on such a PO without a hitch.
As for the SEC filings, of course they must describe the worst case, but in VLNC experience, so far, the worst case has been the CASE. It seems that Murphy laws is applying to them fully, if anything can go wrong it will.
I believe they erred strategically in trying to get their initial production "designed" into the boxes. They were offered small order for "attachements" type and according to this thread they turned these down, but these are exactky the kind of order that build confidence in the client base that the product is valid. If I was a CPQ or an IBM, I would not commit my top line of portable to a new technology that has not been tried for some length of time in the field, and cetrtainly will not do that on the basis of a single source supplier if I had any choice. I think that the lack of order may not be VLNC ability or lack thereof to produce, but unwillingness of customers to commit to a new untried technology.
Zeev |
