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  • fifthspecies fifthspecies Jun 25, 2008 3:38 PM Flag

    stock price at all time low

    What's up? This thing is drifting. SP at all time low.No news for awhile. When is the litigation going to be settled?

    Please someone respond!

    I'm drowning in a desolate sea of Spam!!!!!!

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    • Hello Fifth,

      Listed below are the messages I posted in chronological order from Jan 31 thru Feb 9, 2008 which provide a little background on MSII's difficulties. Without resolution to the Xerox litigation the company will continue to bleed as protracted patent(IP) litigation is very expensive in this industry and if even 1 paptent is found to have been violated it could be bankruptcy for this relatively small company. Also the company is reeling from contracting gross margins as its sales are shifting from more profitable solid ink to laser toner as well as facing lower cost imports from Chinese and Korean manufacturers. Back in February I had recommended that under $2 pps would be a good entry point but now given the deepening recession I would see closer to $1 as a good entry point.

      Here are the message threads:

      From Jan 31st:

      As I stated a few weeks ago this company has 2 major problems that will seriously affect it's future profitability:

      - The Xerox Patent litigation will continue to bleed earnings and there is the possibility of a big judgement. Printer OEM's are increasingly defending there IP(Patents) in this industry to block competition and MSII is too small to fight large printer manufacturers.

      - Margins and possibly sales will shrink as many companies are directly importing comparable color laser toners from asian suppliers. The company does not have enough brand equity to command the higher prices that it needs to charge to remain profitable in this market.

      Looks like the "street" realizes theres rough waters ahead for this company as the stock price has been heading south the past couple of months and leading into the earnings relase in 2 weeks.

      From Feb 4th:

      I haven't had any holdings(short or long) in this stock for a while now. I have made some good money on them over the past 5 years though. I've been in the compatible printer supplies business for 23 years though so i have firsthand knowledge of this industry.

      IMHO MSII has a difficult future(at least in the near term) ahead of them and I'm just trying to point this out via the forum.

      From Feb 9th:

      In the past few months the stock has dropped from $6 to $3 pps. Personally I'd wait until the Feb 15 earnings call as I suspect the Q4 loss will be larger than the Q3 loss(mostly due to the Xerox patent litigation). Also bear in mind that theres been no indider stock purchases(only sales & option exercizes) in the past 6 months...the insiders know whats going on and would be buying in the open market if the current price was a good deal.

      After the earnings call a good entry point could be just under $2 pps with a cautionary note that there may not be light at the end of the tunnel yet with regards to the Xerox patent litigation.

      • 2 Replies to smlcaps
      • smlcaps,

        Not to put too fine a point on things in your postings recap, but where do you see the >>>only sales and options exercizes(sic)<<<?

        Is it here?:

        The only seller is Mr Levin and considering he has been pumping his own money into this company for as long as I have been invested in it--and longer--the fact that he is selling a pre-determined number of shares every week as having filed his intent to do so in '06 and amounting in toto a small % of his total holdings, no one else has sold a share for a very long time. The fact that anyone exercises options granted AND vested at or above their respective strike price(s) they still must pay taxes on those exercised option shares out of their own pockets over and above any grant price. They haven't even sold a portion of those exercised options to cover that respective tax. In fact, there is/are beneficial owners (5% or more of shares OS) BUYING on the open market, on a regular basis as is evident by the filings by same. And no filings of any sales despite having bought those shares (now approaching 600,000) well above the current pps.
        I don't know what your agenda is but I find it highly suspicious. Are you trying to talk others out of buying or perhaps into selling what they have in the hopes of dropping the pps lower so you can buy in or buy to cover a short position you might very well have?
        Very slick series of posts. But way too obvious your intent.
        I mean, how disingenuous of you to mention how vigorous OEM's would (implied) defend their 'patents' even though they've already lost that argument several times in US courts on the one hand, yet on the other hand you throw in the 'Chinese' cheapies flooding the markets claiming MSII can't compete with. Where did your 'patent defense' argument go?
        You are welcome to present any reasonable argument defending your position but beware!

        Bullshit won't be tolerated.


      • Thanks smlcps,

        Looks like you're batting a thousand on this one.

    • 5th,

      Hardly an all time low.

      I first bought MSII back when it was still GFX (Cadapult Graphics) in '01 Oct. @$1.48. It then went down into the $.30's and then came back up where I bought in the $.40's, $.50's, $.60's and all the way up into the $1.90's. Been a long haul.

      What's going on right now is nothing more than the Specialist/Market Maker trying to generate trades. It's happening in many/most small/micro caps, especially those with relatively low ADV's. You want the pps to stop dropping? Buy whatever comes up for sale. This company is not in bad shape. The Earnings/PE data are distorted by expansion costs. Do a bit of DD and you'll see what I mean. Revs have been steadily growing for the last 7 years and that's not likely to change. Their market is more likely to want what MSII has to offer than at any time in the last decade.


      • 1 Reply to spixleatedlifeform
      • Thanks SPLF,

        Right, I meant the SP is at an all time low since the company became MSII. I knew someone would catch me on that. Good.

        You're correct, revenues have been growing steadily on an annual basis. If the litigation thing ever gets resolved things could look pretty good, but I think it will always be a burden in one way or another. The expansion is promising.

        Wish I would have discovered this stock today rather than last year when it was above 5$.
        I still like the story so I'll just sit tight and hold my shares. Hell, I still have 30 years before I need the money anyway.