Rocketman, reporting for duty.
Let me summarize where we are on this flight:
We stockholders own part of a company that is establishing an international presence in VoIP technology; one of the hottest areas in modern telecommunications. DGIV has already established this presence in the Russian Republics, Eastern Europe, Indonesia, and now Australia. And from what I hear from the grapevine, Jimmy is establishing rocket pads in several other places, announcements to come.
Is this important? Do we need a big time contract annoucement with each and every new presence?
Well, consider this:
"Lucent Technologies Inc. (LU - news) said on Monday it will acquire Yurie Systems Inc. (YURI - news), a leader in equipment for data, voice and video networking, for about $1 billion in cash, or $35 a share... ''It makes a lot of sense for Lucent strategically,'' said James Parmelee, a telecommunications equipment analyst with Deutsche Morgan Grenfell.
WHO IS YURI?
YURI is a relatively small, unknown company that one year ago was trading at just a dollar or so over DGIV's current price, that provides Asynchronous Transfer Mode (ATM) comm links, and has intenational agreements -- hence Lucen't "strategic" interest.
GUESS WHAT?
DGIV has even more international agreements at the time (Mmmm... wonder what JC is doing, and why he has been asked to stay over a little longer), and just announced ATM services in Australia. "The Netro connection provides high speed Internet connectivity via international links using the Asynchronous Transfer Mode/Frame Relay network to deliver the most demanding Internet connectivity including: 2-8 Mb via Satellite, and 10/100 Mb (10/100 Base-T)"
The kind of stuff that Lucent wants to get into is what DGIV has been into for a long time now!
Can you start connecting the dots?
OK, so now let us put those "office opening" announcements in context. It's not the office, guys, it is the in-country penetrations!! Foreign governments by and large monopolize their telco's in the same ATT did here in the 70's and early 80's. Then along comes deregulation, and the dam breaks. The along comes the internet and all hell breaks lose.
International telcos are now going through that. So along comes ATT, MCI, Sprint, Lucent, etc, wanting to run their systems. Guess what again -- they can't get in!!! Those govts will not allow them to come in and take over their internal comm systmes, which they consider (rightly) not just for talking about the local soccer scores, but for their national defense. That's right, their national defense.
So deregulation is giving them the shivers, because unlike us they are not superpowers, and have warring political factions (well, in that score they are like us, except with real bullets :-) and whoever controls their telcos has a lot of power. So they are not about to let a US company take them over. What they are willing to do, though, is to work with small, innovative, state-of-the-art US companies to help them build their own infrastructure, and enter into cooperative strategic agreements. Does this remind you of anything???
Well, enough of that thought. Now consider that we own a company that is still a NASDAQ BB company but is applying for full NASDAQ status. What do you think that is worth, even without being in a hot market? When will they get this? As you know, it takes a $4 price for 30 or 90 days, I have heard both, and lots of filings. So the clock has been ticking. But here's another guess what? There are quicker ways of getting there. The worst case is 90 days. The best case is... quicker. Will that happen? I don't know. Am I willing to wait 90 days worst case? Well, since I'm holding well into the next century, that is a mute point.
PATIENCE WILL BE REWARDED
About those MMs that we love so much. The float is gone, folks. Gone! So the trading you see is by and large between MMs, with no commissions. Gee, wish I could get a deal like that. But I've got an even better deal, because I dn't have to deal at all! Let them deal between themselves, it is all artificial. The only real trades are thoe buys and sells from average people like us, and if you look at the volume, there's not much of that going on. This worried dginvestor because he wanted to see the stock churning (for what reason I am not going to speculate). While he is right in that this is what it will take for the stock price to go up, they are not going to churn my shares! There will be enough shares to churn once we go NASDAQ. You don't think the float will remain this small then, do you? It will need more shares, a secondary offering, and then those people can churn all they want while we who are on the ground floor just watch our shares apprciate.
I am not a financial expert, all I know is that reading posts from experts like dwlima (who did a great VALUATION of DGIV last week), we look pretty darned good, even without the announcements that we suspect are coming down the pike. I also know that deep pocket guys like Mr. D and others are buying like crazy. And these guys are not into losing money, or buying junk. So if the float is gone, where are the shares coming from? From thin air, folks, the MMs are selling short. Another guess what -- eventually they have to cover. Maybe not today, maybe not tomorrow, but eventually, and sonner rather than later. That is why I say that the fat lady is clearing her throat. When they are forced to cover, look out!
OK, my fingers are now tired, and I have to get back to my consulting day job. My clients are wondering if I have given up the consulting business :-) If only they knew, they may soon be right :-)
<Rocketman, to the engine room> |
