AJ, I understand your frustration with how FC was handled. I, too, was as upset as you, however, after talking through the matter carefully with David - I realize it was a reasonable and logical decision. Allou has no more experience running an I-net company than you or I, or the next guy. The cost of doing so was far outstripping the immediate benefits from the revenue front. He handed it over to the experts, took some profits off the table from the new owners, and managed to hold onto 13% of something that may be far more valuable down the road for all of us than it may have ever been under Allou's tutelage.
Back to your example of your communications license. You list the asset on your balance sheet as $4 million (cost of purchasing) with a liability of $100 million - which is the amount a bank has loaned to you against that asset. You mention the license is really worth $150 million, but that doesn't appear on your balance sheet. Well in the Allou example, the license cost Allou nothing (capitalized way back) and there are no offsetting obligations against it (like Bank lines of Credit, etc.) - so your accounting treatment doesn't extend rightfully to Allou's situation in my opinion!
AJ - I don't think any respectable CFO could attach a valuation to an asset that isn't somehow certifiable, do you? A stock buy-back is always an attractive alternative, especially when a company is trading below book! But at this point the company would rather have cash on-hand to spend on acquisitions, than to buy back their own stock. Best of luck - you raise some interesting points, though. |
