Was looking to buy this stock on earnings, then read the fine print and see they are going to completely write off goodwill. This would result in a $2.6 million loss in assets, but would also require a reduction in Stockholder's Equity of $2.6 million, which I believe would come as a one time expense. They claim it does not affect this past earnings quarter, but will it be charged as a one time expense in the next one?
I just simply have to laugh at the nay-sayers. I've been watching this company and buying it for over 3 years. I've listen to all the smack about the lying CEO, smoke and mirrors, etc. and still I've found things to pretty much hold true to what the CEO has said. In the mean time, I've now had a 10 bagger and am still looking at making lots more money. Ya all can still act like chicken little and ignore the facts. Maybe if you want to day trade you might lose something. But hold on for the ride. People have continued to state that the revs are a concern. However, since the CEO announced a few years ago about the new direction they are taking, they have now come to a place where year over year revs are on the uptick. They are up 4.6 percent over the fourth quarter last year. The change is now steaming ahead. Yes, somethings have been tried and not worked, yes, there have been a couple of things that hurt the share holders, but, in the long term this position is trending up. Go ahead and call me names and say how stupid I am. Point to the distant past. Me, I'll hold for the long term. I believed the CEO when he presented his ideas for change and believe Peter Lynch when he said to look for a company who are implimenting ideas of change. And lastly, when all logic fails and you rebut this, please don't resort to "you're an insider, pumper, etc." It makes you look really ignorant. Happy money making.
Writing off goodwill will affect the balance sheet but is a non-cash transaction and should be added back into the cash flow to find the true amount of cash the company is producing. If someone had 12 million dollars and bought the company as of today they would be getting 4.43 million every year on their purchase. That's not a return, that's a crime!
Goldman Sachs wrote off an amount that was immaterial compared to the size of its earnings. This will destroy any chance of profitability next quarter. Look at GMTI.OB earning's report for Sept. 09. Only small company I know to have written off goodwill lately. It occurs as a non-recurring charge on the income statement, and decreases net income by the full amount. So if LBIX is bragging of a $1.1 million or $0.30/share profit, you need to be aware of the $2.6 million or $0.71/share loss in assets LBIX is about to take!!!!
The next earnings report should show the damage, and temper any rally this stock should have today.