Neil:
Get serious!
You state: "Paul, the reduction in kit orders was taken completely out of contex by the bears who
applied their own ficticious slant to a simple return to normal production numbers. We
all knew that the original increase up to 80 kits monthly, was to catch up to the huge
backlog of press orders at Heidelberg"
Neil, You forget that as of July, Heidelberg announced immediate availability. I have heard from two souces, installs as of Sept. 97 were 360 (unverified). If this is true, shipment may well fall to 15 per month or less as Heidelberg works out of an apparent inventory imbalance. Its not out of context, it is on point.
Next you state:"The refusal by the bears to even acknowledge
the companies increasing revenue from other sources and the 5 time increase in
systems imaging Presstek kits was quite clearly an attempt to persuade investors that
Presstek was in trouble etc. As you know, it was even reported incorrectly that
Heidelberg was phasing out their ties with Presstek. "
Neil: the issue is how much revenue and WHEN from these other sources. With the exception of Fuji and Anitec, these relationships are old, and have yet to yield much. Fuji and Anitec appear to be low margin OEM deals, with little impact on the bottom line.
As for Heidelberg phasing out ties, dispite Pressteks release, IMO, this is happening eg. jvs with kodak, Creo etc with heidleberg.
You then state:"The 2.9 million paid by Howard and Verrando to end the SEC suit was most certainly
a victory for Presstek as I stated previously."
What are you smoking? This was no victory for Prst or its management.
You then state: "You need to spend some time and investigate the sales of insiders at the then current
stock prices. "
Neil, Management sold so many shares in 1996, I doubt they have many capital needs. I do believe management has a problem if it sells shares knowing the impact, and not disclosing the impact of the Heidelberg reduction. This cuts both ways.
You then state: "What is glaringly missing from your post is that the SEC found no
problem with the sale of the stock and would have certainly used this allegation if
there was an truth involving wrong doing to their shareholders."
Neil, this is incorrect, read the settlement, the timing of the disclosures, and the share sales by insiders. This is better detailed in the Class action suit.
You then state:"The degree of complaint in the SEC findings are very minor in detail
compared to the original charges and are not material at all to the present day
activities of the company. "
I don't consider allegations of fraud and intentionally misleading investors minor.
As for the class action suit. Either you are uninformed, or inexperienced in these matters. This suit is not going away, and it is not going to be cheap. The SEC settlement reminds of the cliche, where there is smoke, there is fire.
On a side note, if Class counsel is correct in their portrayal of Prst lack of conformity with GAAP, duck.
You then state: "You are sadly
mistaken if you do not believe Presstek is certain to gain considerably in share price
from these levels."
Neil, Prst will likely get to 15 long before it sees 35(if ever).
You make the statement: "
Nothing has changed to cause this multiple to decrease, which will be evident when
earnings are announced IMO. In fact, the stock traded with a PE above 1000 for a
short time. Many mutual funds and investment companies owned in excess of 25% of
the stock, even when Presstek was subject to an on going SEC investigation and an
additional NASDAQ investigation. When the stock begins to rise the momentum
funds will hop aboard again."
Neil: When Prst traded at a 1000 PE, it was based on erroneous forecasts. As for many mutual funds holding the stock, who outside of CMM has a significant position, Oxley is probably out completely, CMM has declined by 30 %, and these were Prst's strongest supporters. Neil, stating it, doesn't make it so, and in this case, its contrary to the facts. Second, this is no longer a momentum stock, the continual collapse of the PE, lack of volumn (other then in a decline) is indicative of this.
You then state:"What good does it do to have everyone else begin work on your
technological breakthrough if you have immediate competition from the get-go."
Neil, pick your ground. Last week Prst had patents no one could get around, now your worried about immediate competition if it discloses forecasts. This is horsesh...
Next: "Paul, Presstek announced 1000 quickmaster kits will be delivered early in 1998. To
me, this means by the end of the first quarter. Sure doesn't sound to me like much of
a cutback, does it?"
Neil, weren't these 1000 machines part of the order from December 96. Further, In September 750 machines had been shipped, and Prst was producing 80 per month. How many machines are left of this original 100 to ship in January -30 to 40 tops.
As for your conclusion, I feel sorry for your position, as you stated you bet the farm on Prst. I feel badley that you may end up a farmhand and not the farmer, but its your choice. I suggest you some puts as insurance, the tape is not going your way. |
