ALL, PLEASE READ THIS CAREFULLY...
I must say, I too have read and reread the press releases, but I see
nothing with regards to existing revenues or anticipated profits.
I see only SUBSTANTIAL anticipated revenues. However, as I read the
comments on this thread, people are talking as if tens of millions of dollars are already flowing into this company. Is there some secret press release floating around, or are people just reading more into them than they should?
Here's what I read:
The restaurant/entertainment business "WILL add about $10,000,000
to Midland's REVENUES for FY 1998". Notice the words "revenues",
"will" and "1998".
The software SALES "for FY 1998 are EXPECTED to exceed $5,000,000."
Notice the words "sales", "expected" and "1998".
New Departure "has entered into formal NEGOTIATIONS with Shar
Bearing Corporation of Russia" and "is also NEGOTIATING with several
Chinese manufacturers of Bearings." Notice the words "negotiations"
and "negotiating".
In the prior press release, New Departure "ANTICIPATES it WILL add SALES in excess of $15,000,000" due to a planned expansion in the
first quarter of 1998. Notice the words "anticipates", "planned",
"sales" and "1998".
"The Company WILL also reopen its West Coast office, in San Diego."
Again, notice the word "will".
"The Company FEELS that it CAN convert a SUBSTANTIAL PORTION of the
... sales, currently in this market segment, to short term
capital leases." Notice the words "feels", "can", and "substantial
portion", none of which are definitive.
"The Company EXPECTS to have SALES/licensing FEES of $2 to $5
million during FY 1998." Notice the words "expects", "sales",
"fees" and "1998".
Quoting from the 8-K, "New Departure is in the Bearing
and Power Transmission Business and is a START UP COMPANY. A
division of New Departure WILL lease Bearings and Power
transmission equipment to large corporations and provide a
software interchange program to distributors on a lease program.
Another division of New Departures WILL acquire obsolete
inventory from distributors and liquidate it through its
interchange program." I read the words "start up" and "will".
I do know however that New Departure was formerly a big name in the bearing business, and I am a bit confused regarding the "start up" company reference - but that's what is says in the 8-K.
Nothing in any of these releases mentions profits, income, or
existing revenues. I repeat **NOTHING**.
However, if even a portion of all these expected revenues were
actually achieved in 1998, it would be quite substantial.
GaBard has repeatedly mentioned that he has been told by the
company that there are substantial existing revenues. However,
the company has not publicly confirmed this.
Further, the company's repeated usage of large "round" numbers
such as 5, 10, 15, 25 million, rather than say 3.8 million or even 8-9 million tells me loudly and clearly these are guesses not
numbers pulled from a financial statement. I would even venture
to say they are rather agressive projections.
GaBard has been a supporter of this stock even before the New
Departure acquisition was announced, back in the days when MIDL
was gung ho on acquiring a set of companies which they have since
decided not to acquire. This is not in any way to demean GaBard's
analysis of this stock or his allegiance to it. I am sure he has
put a lot of time and effort into researching this company. Perhaps
GaBard doesn't understand that the SEC provides a safe harbor to companies making forward looking projections. The SEC allows a
company to say it expects $25 million in revenue for 1998 when it
hasn't made a dime for 1997, --- as long as the company truly believes
to the best of its ability that such revenues are potentially and
realistically achievable.
To summarize this rather lengthy post, MIDL is a penny stock. If you
believe in the management, believe in the market for the company's
product, believe the company has the wherewithall to pull it off,
and think it's worth the paultry 60+ cents a share that it now sells
for, then this stock's for you.
Personally, I think the bearing business can be a big winner. If
you research the other bearing stocks, IMO you'll see 60+ cents is a
bargain compared to the potential value this company can have in the
very near future.
I'd be happy to hear any information to the contrary, but I must
say that there are people in this thread who become entirely too
defensive when someone suggests an alternative perspective. If
GaBard's or Frank's or anyone else's DD is so perfect, then they
shouldn't care if someone expresses a differing opinion or asks a
question. With their perfect DD, they can just sit back and wait for
the profits to roll in.
We all are equal members in SI. No one has an exclusive right to
this thread. If GaBard or others are tired of reading the same
questions over and over, maybe it's because they haven't been
answered or they don't have enough patience for penny stocks. And even if they've been answered a 100 times already, tough - that's life. The questions don't go away just because someone thinks they've been answered already.
Do you know how tired the rest of us are of hearing "this stock is shorted", "MM's are playing games", or "buying at the midpoint is hurting the stock"? Some of us are sick of that too. It might be true and it might not. It doesn't matter, except if you are a daytrader. If it's a good stock, the price WILL rise to its true
price even if it gets driven down to a nickel in the meantime.
There's not a thing you or I can do about it unless you want to buy
every outstanding share yourself. I will always buy the stock for
the least I can get away with, so will everyone else but GaBard.
If I really want a stock, I routinely bid between the bid and ask deliberately to drive the price down. Some people have deep pockets
and they can afford to drive the price down to NIL. That's life too.
If a price drop scares some people out of a stock, I'm thrilled.
Now, that said, I'm ready to hear some more FACTS about MIDL.
Does anyone have the street address for New Departure? I'm going to
drive by later this week to check it out personally. |
