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Technology Stocks : ALU - Allou Health & Beauty: Another Web Play -- Ignore unavailable to you. Want to Upgrade?

To: RockyBalboa who wrote (292)	3/26/1999 12:17:00 PM
From: Timoteo	Read Replies (3) \| Respond to of 418

Shorts and longs-the gist of my conversation with the CFO yesterday. I talked to David S. yesterday and he was very forthcoming about what is going on. Many of these items have been posted before so I'll be brief. I'm also paraphrasing and as always do your own DD. On the key issue of IPO: at this point a private placement is more likely than an IPO. Without any final decision note that there are several interested parties and a deal will be very beneficial to ALU shareholders. The placement would enable FC to stop being a drag on ALU earnings and give it an opportunity to "mature" into a more valuable IPO. With recent internet IPOs valued at 20 to 40x revenues, FC is very valuable, but could be even more so. Ultimately, ALU shareholders would be given a spinoff dividend for the shares of the eventual IPO the company held and ALU would go back to being a distribution company. This strategy makes sense to me, though it means there will not be the one day 300% rise that longs hoped for when the IPO was hinted at on CNBC. An announcement on the final terms should be forthcoming fairly soon. The core business is doing great. Revenues and earnings are both good and they have high hopes for the production business, both because of demand and margins (approximately 54% gross). The core business should make well over a $1 per share this year. 42% of stockholders are value institutional investors. They are working to maximize share value and focus on their core business which has been consistently improving over the past years with steady revenue and earnings growth. No "funky" financing planned (floorless convertibles, open ended option instruments, etc.) This is a real company whose main shareholders are institutions and the family. I am currently long ALU but have tried to present the information as straightforward as possible. I see the stock as a value play at these levels with the opportunity for a significant internet IPO bonus. Am in at an average of about $10 and am averaging down. Best, Timoteo