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  • howardmorris howardmorris Feb 19, 2009 10:44 PM Flag

    Thoughts for mngt (And Goutah)

    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 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,

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    • 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.