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CPI Aerostructures Inc. Message Board

  • cmegladon cmegladon Sep 6, 2002 12:25 PM Flag

    Increasing Shareholder Value

    Since the company management seems to be doing a fine job securing contracts and increasing revenues they need to tell the world about it. The last PR was great, but they need to tell the world about new contracts as they come up. Maybe they need to spend a little bit on a PR firm or hire someone (or use someone within) to handle investor relations, getting the word out to institutional community and the investment world. Just IMHO.

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    • No PR imaginable will get the investment community interested in CVU. The problem is a float of 2.70M shares. How will Merrill Lynch ever recommend a company like this to their customers if it takes 10 hours to get an order filled or if a significant buy order can raise the price of CVU 10% in a single trade?

      I contend that CVU has to split the shares to get a higher float available to the public. No analyst will cover CVU with so few shares to be had.

      Having said that, CVU is the type of stock that shows it's Mojo around earnings time. CVU will not trade like a typical company with such a low float...but it will definitely continue to rise every 3 months!

      • 2 Replies to thedarcside
      • Darcside,

        You said:
        "I contend that CVU has to split the shares to get a higher float available to the public. "

        I've seen this type of post on many other boards of other micro-cap stocks. It sounds great on the surface, but think it through. If you split the stock now, would you sell half of your shares? Probably not....I know I wouldn't. Thus, if you and I don't sell, then how does the float increase? It won't.

        There are two ways to realistically increase the float, and both have problems in the short run.

        One way to increase the float is to issue a secondary offering, which dilutes the present shareholder base. I'm not in favor of that, but if used to pay off their debt, it *could* be seen as a long term positive (but would immediately cause the stock to fall IMHO).

        The second way is for insiders to start selling their own shares. What do you think would happen if August or Fred filed to sell 100k shares? The stock would probably get knocked down immediately.

        So, both ways have negative short term implications. The only way to truly get a sustainable move above 10 is to achieve good consistent results over time, along with a steadily increasing backlog of new orders.

        Proving that the company can generate cash from operations will also be a big help.

      • After 9/11, I started researching military/defense contractors as a group. I decided (as I'm sure many did) this group would do well given the change in our world. I percieved this change as a long term one. There are many areas in defense/aerospace/military, and I discovered CVU among them. I'm just saying, make it easier for people to find out about the company, and they will invest, build a position over time. PR will not hurt, and it is necessary. So far as institutional investment. It's not just institutional, it's brokerage house recommending this as a part of someones portfolio. Don't tell me a broker wouldn't recommend this to someone to have a few thousand shares. Over time, prices will apreciate, and your splits will come if they continue to do well; secondaries will come etc. But, the word has to get out.

        That's all I meant, again IMO.

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