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Microcap & Penny Stocks : SILVER DINER (SLVR) Under $5.00 not for long.............. -- Ignore unavailable to you. Want to Upgrade?

To: Howard C. who wrote (106)	11/23/1999 6:58:00 PM
From: Leo J. Bourne	Read Replies (1) \| Respond to of 126

Take a look at latest financials. The company continues the business plan with the opening of two more restaurants, which will be the last that can be done without financing. However, it is enouraging that they are working on a bank line of credit for two more. Why is this important? Because the standard ploy would be to hype the stock, issue more shares, dilute the original investors' holdings and then do a reverse split to avoid delisting. The fact that they don't seem to be going in that direction is yet another plus. Also, check out the insider buying. On the negative side, overhead costs are up. If that is a result of legitimate training and administrative expenses, no problem. If it is skimming of the profits to buy yachts for the directors, then shame on them. But I prefer to think that the overhead is an investment in a sound business plan. Let us not be misled by the reporting of a profit. This is a consequence of changes in accounting practices, and is somewhat arcane. The important thing is the long term. With four additional restaurants (even if two are financed), the company should be profitable, IMHO. If so, then the vision of expansion and possible franchising becomes more realistic. However, it will be a close call. It is not clear to me how large net income will be from the financed restaurants. If they can simply break even, they will dilute the overhead by about 15%. That reduction might have been enough to put the company solidly in the black, but the recent increase in overhead now raises doubts. Those doubts are mostly about timing, not the business plan. As long as new restaurants can break even despite debt service (I think this is possible), the economies of scale will win out in the long run, with overhead becoming a diminishing proportion of expenses. I look for stock price movement in 2001. I don't see where the directors have bet the farm on this stock, but they have put enough money into shares so that it is clear they don't expect the stock to go belly up. If the company were bought out by another chain, that would probably be the best thing for the shareholders. I would expect the offer to be around $3 per share. That would take into account about two years of appreciation, but would forego explosive growth opportunities. I would rather hold onto the stock for a few more years, and then in 2003 see 20 restaurants open with an accelerating expansion, and with the stock price at $5. Do your own DD. If I knew what I was talking about, I'd be rich and retired. The foregoing is idle speculation and is not meant to reflect anything more than my own (possibly flawed) analysis. Good luck. Hi yo SLVR, away!