Pallisard, as I said, it is one of many tools one should look at when analyzing a plurality of very high risk/ high potential rewards situations. Some how the threads does not like to look at numbers, I have suggested to Vester to do the same analysis under a number of different rational scenario. Frankly, I do not have the time this weekend to carry these on, but they should reveal what kind of sales level and margins would be required to take VLNC out of the "endangered species" list. I am sure that if sales and profits within a year reach what FMK feels is rational, the Altman model (despite the yoke of the negative $145 MM in past losses) will yield a very healthy picture. Somewhere between FMK's scenarios and a worst case scenario, there is one yielding a reviving company. Don't you think that it would be nice to find out what those numbers are and then try and find out how likely the achievement of these numbers are?
Last, we are at a very peculiar time after a very interesting trading week in the stock, we seem to know that one kind of financing or another should be coming down the pike, for that matter,(even if a PO was announced before the end of next week), for few hours on Thursday, it seemed that news was going to be good, but the stock, after opening at the high (or very close to the high) proceeded to go down on Friday (and as someone mentioned in mirror fashion to Thursday's fashion). That indicates to me that we might be on the verge of a very interesting developments. I could discard both Thursday's (quite bullish) and Friday's (quite bearish) actions as just "fluctuations" and maybe these are just that, but so close to some critical events, it tells me that there are some severe cross currents. It could be that there is a PO coming soon, but the financing maybe more punitive than expected, or the other way around, no PO soon, but a good hearted CC or another angel coming up with another $10 to $12 MM on "reasonable terms".
I have not the foggiest which way it will go, thus I am still on the side line. Due to general market conditions, my bias is negative, and even if we get a spirited rally, I think that the opportunity to get in at reasonable prices (if the news is great) will still be there by June.
Zeev |
