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SOAPSTONE NETWORKS Message Board

  • rileywkr rileywkr Feb 19, 2009 9:06 PM Flag

    Thoughts for mngt (And Goutah)

    A couple of you think so highly of the potential of this new "product", here is a suggestion: I propose that the mngt takes all the fixed assets which total 4.826 million for their severance and that would also be in addition to whatever perceived value the new "product" has and take that also and guarantee the co against any future losses and immediately pay out a distribution of the remaining net of 5.87/sh (before obvious losses for this current qtr we are in). I am positive that you could take your part of the distribution and buy a part of the great potential of this new "product" with your funds. In fact I would surmise that the mngt would gladly take your contribution to the development of this product and your potential rewards could be tremendous if successful like you say on your time horizon. The rest of us are assured of not getting the continued losses that have occured. Sounds like a win/win situation for everyone. I myself would be willing to forgo that potential for the insurance of not having future losses and mngt if they are really sincere about the potential, should leap at the chance for a huge potential win by giving up small severance amounts. What say?

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    • Riley, as usual it is very difficult to argue with your logic. But your comments make me wonder how you ever got into a one-trick pony stock like AVCI or a highly speculative one like SOAP. This stock is the very definition of "gamble" (or, for the professional traders, "high risk, high reward.") It was always going to lose per share value until sales ramped up. It was always going to be guilty of high cash burn and low return until the product caught hold (think about solar panels, which never made any money for anybody until 2007-2008, even though they've been around for 40 years or more). SOAP may look like a poor stock today, but it's appearance hasn't changed in over a year. If the tech works any monkey can sell it. If the tech doesn't work, you have to have a highly trained monkey to sell it or a Government to buy it. But even bad tech can sell and then grow into a robust product. SOAP is a brilliant attempt at creating a Rosetta Stone for router architecture. The potential reward is worth...well...my patience.

      I know that any guesses at future stock prices look like so much wishful thinking, so I won't throw out numbers that everyone knows are purely guesswork. Better guesses just aren't possible until SOAP has sales. But when they do, you'll no longer have a pitifully undervalued spec stock; you'll have a well-know, appreciating, covered-by-the-Street, mid-cap that you bought at $3.00 and brag about to all your friends.

      If safety is what you're looking for, the dividend yield on T is now about 7%. That seems like a great place to hide money until a more sure thing comes along.
      Good luck,
      Howard

      • 1 Reply to howardmorris
      • On the acctg issue, I am not an accountant but have been told that if a certain amount of ownership changes, don't know the threshold, that the NOL is in jeopardy, unlike what it was yrs ago when others would buy shells for their large NOLs. Maybe an accountant can clarify that assumption.

        As far as the question of how I got involved in this co if I didn't have high regards for the product: I have been in the securities field for 50 yrs this yr and specialize in cos like this where there is a great deal of cash/near cash and the mkt place doesn't value whatever the mngt is doing. If there is a huge disparity between the cash and the market value, the owners are telling you that they don't believe the mngt and the prospects they are promoting, which means there is a large chance of the buzzword "Strategic alternative" to be looked into. Everyone has their own way of investing and this certainly isn't foolproof of course. I was in AVICI many yrs ago when it sold at a huge discount from cash and it worked out that time also. Either mngt has to do something to bring the company in line with the actual value or others will do it for them. This is the way it should be because money is raised in the public mkt place, the shareholders interest has to be looked out for.

    • Three points:

      One, I just want to agree with Riley that this has been one of the best boards out there with substantive discussion. It is a far cry from most of the junk on Yhoo.

      Two, I still hold that the PNC has potential and 3 yrs from now believe SOAP would be significantly higher. That said, I also have said from the beginning I had full faith in management and what has come about is their doing. They could have owned more shares or been more aggressive with the product. I hope they are not being bullied into this decisions, but if so, there is no one to blame, aside from the management I have touted on this board.

      Three, I hope this is not an all out liquidation with the doors closed sold to the highest bidder. I think this product has promise and the full cash balance will not be realized to get there. A lot of work has been done and I believe SOAP could return 3$/ share and still have the means to create a viable product.

      Regardless of what happens, this has been a fun stock to own and it will be a profitable investment. In this market, it could always be worse.

      • 1 Reply to afroman22
      • Maybe a company like SCMR which has 900 million in the bank or Extreme Networks can buy out Soap for around $10/share.

        Please do note that Avici also has NOLs which can be used against profits of acquiring companies and reduce / refund the taxes.

        Cash + NOL + Product.. I would say SOAP is worth at least $150 million ~ $10/share.

        Accumulated Defecit is around $383 million for AVCI. Not sure how much of that will carry over to SOAP. At 20% tax rate, that's a $75 million savings.

        Any accountants on this board ?

        japa