Agree with PJ ...best post you've ever put out here and more in line with what I expected to read from you when I first visited this board a few months ago. Although I may not agree with everything you said, I can at least respect the frankness of the content.
I differentiate between the company and the investment, mainly because the timelines are different. I'll be out of my investment long before the Casino RFID market goes "gray". Although VNX may not be the best "company" in the field, it still can offer some opportunity for investors to profit. For example, If I had managed to snap up a boatload at 1.95 (which I did not), I would be one happy investor - even today @ 2.50 (+25%) and would probably sell a significant portion in the 3-4 range.
I think that it will take a few profitable quarters for the market or any prospective buyer to price VNX above 4.
Since you mentioned buyout - which is always a possibility in an emerging market. What does VNX really have to "sell"? Is the "dolphin marketing deal" transferrable and if so who would be candidates for the buy since we now know that dolphin utilizes the same exact RFID chip technology (Magellan) as PGIC/GPIC? In truth I am confused exactly how VNX actually got their marketing deal with Dolphin since PGIC is the "Master Gaming License" holder for the next generation(s) of Magellan products.
"In June 2005, the Company entered into an exclusive global master license with Magellan Technology Pty, Ltd. of Australia for Magellan's rights to the next generation RFID reader tag and related intellectual property for any gaming applications. The Company also entered into an agreement to purchase a minority equity investment in Magellan. "
So where will that leave Dolphin/VNX as Magellan technology evolves?
On the table hardware side, it is apparent that the products had problems in the past but the new management is trying to correct that. Bad experiences are hard to overcome but can be done so through pricing,replacement guarentee, customer service and regular upgrades. Do you think that VNX can overcome both their own past and the 800 pound gorillia compr=etition that SHFL represents?
We seem to agree that VNX will not displace SHFL in the forseeable future. But the market is large and a small company can live comfortably and profitably with a small percentage of a large market. Even if the sale quantity was not extrordinary, VNX has recently demonstrated that they can make sales to large customers in the international market (Galaxy) and that is a good start. What percentage of the casino table hardware market do you think that VNX can realistically close over the next 3 years? 1% 3% 5%? 10% more?
SHFL is working on third and fourth generation shufflers. SHFL has sold or leased close to 20,000 shufflers to date, SHFL has extensive, make that EXTENSIVE, feelers throughout the industry insuring its shufflers are cutting edge.
If you've seen VNX's "latest" shufflers and simply watched them operate compared to SHFL's shufflers anyone with half a brain would realize they are not even in the same ballpark. It's as if VNX is a grammar school pick-up team playing the Yankees.
Of course now the "C" boys are telling us the shufflers are not really that important anymore, and that all of a sudden VNX's future lies in the RFID field. It's just another example of a Ponzi Scheme morphing itself to sucker the latest batch of suckers. Yesterday it was shufflers, but the ugly facts got in the way of that being saleable anymore, so now it's RFID.
The ugly truth is VNX doesn't have the infrastructure to compete with any product at any level. VNX's balance sheet is worse than awful and Pjv has done a great job proving this fact, VNX's service department has a reputation that's beyond repair, what sales person would work at VNX when there are legitimate companies to work for; companies that don't have a history of losing $1M or $2M or $3+M every quarter of its existence? You get my drift.
ScamMan and his "C" boys can spin a yarn but the yarn always unravels because they are smarmy scammers attached to loss-plagued penny stocks.