Senior Management and the Board of Directors at DAIO need to provide shareholders much needed information about the status of our company. And not just one or twice a year but on a regular basis. This would speak volumes for the leadership of the company. Continued silence only provides for rumors and innacurate inferences.
It's so easy to say things like "sell the company". I've heard that armchair advice time and again, but what no one on this board has ever been able to articulate is WHO would buy the company and WHY. It's like saying "fix healthcare, get it done" - a few words and no ideas.
Many tech companies are interested in accretive acquisitions that can increase their revenue stream and generate solid positive cash flow. Over the past 5+ years Data I/O has generated solid positive cash flow. Dropping publicly traded company expenses should add $1.5 million to that cash flow. If the acquiring company can streamline G&A, R&D and/or sales and marketing expenses using their existing staff then the cash flow gets even stronger.
I don't have the expertise to suggest exactly which companies might be interested in acquiring DAIO at $3.50+ per share. I have enough business and investing experience to know there should be more than one good company out there that should be.
The excuse given by DAIO Directors is, "We looked for a buyer several years ago but no-one was interested." At that time DAIO was trading for $5 to $6 per share... so you can bet the chronically over-optimistic Mr. Hume was suggesting a higher acquisition price to any potential buyers.
$3.50 is "half price" relative to $7. Subtract out the cash and the Enterprise Value discount is even deeper. $3.50 is also a 100%+ gain relative to the current share price. Most of DAIO's long suffering investors would be thrilled.
There may be a few existing investors who want the company to continue trudging forward and hope the share price eventually climbs back up to $6. If these investors are so confident, however, why aren't they gobbling up every share available below $2? Their actions, or in this case lack thereof, speak louder than words.
It is time to be honest for a change. Put the company up for sale. Find the right buyer. Get it done.
In my opinion senior management needs to make one key change that Fred Hume didn't ever do. Be honest with your staff and shareholders about the need to sell the company. DAIO is too small to remain publicly traded. Both the expenses and management distraction are far too high. The business model doesn't work.
The staff understands this. Investors understand this. If Mr. Ambrose and current Directors think continuing Mr. Hume's 13 year "oh, we have a secret plan we just can't talk about that is going to suddenly grow revenues" is fooling anyone, they should glance at the current share price.
This "Ostrich Strategy" has shredded confidence both inside and outside the company. It is time to end it.
The staff will appreciate honesty. So will investors. It is a much better long term foundation for building a business.
DAIO can be a solid, successful and profitable company... if it stops wasting $1.5+ million each year on publicly traded company expenses. Be honest. Find the right buyer. Get it done.