Well Bailey can't seem to do his job, so he obviously needs help, but I don't see this as such a great fit...A produce manager as COO of a dietary supplement company? It looks like just more overhead for less talent, and based on recent history...less results...poor shareholder communications...poor inventory control...mediocre sales growth...etc.,etc. I wish the chairman of the board had a clue, but anyone with money can buy stock.
Right. They have nearly $5 million in inventory, and they can't meet demand? If that's true, then they've overstated inventory the way it got them in trouble a few years back. Don't forget, Bailey was hired by Rosenthal (head of the auditing committee during the inventory overvaluation issue), who left with Robertson (who was involved in contractor corruption in California) with his tail between his legs. Just my opinion, but I haven't seen any improvement in the management of this company (with the exception of Jacobson's short reign) in the last 20 years.
How do you incur legal fees of $1.5 million in the quarter. That's $500,000 per month. At say $500/hour, that's 1000 hours per month or about 33 hours a day. I think someone at Cyanotech needs to review the legal billing statements. This amount of fees is ridiculous. I think that if they had an attorney on the board that Bailey would have been advised not to get into a #$%$ contest with Valensa. They were a customer. What was the point?
I just see more and more lies about the company's prospects...just like the claims a year ago that the legal matters were without merit. Maybe if Bailey could tell the truth he'd be willing to return calls from shareholders. He's clearly overstayed his welcome and should be let go. He's accomplished nothing except depleting the company's coffers and incurring debt for a nonexistent extraction plant (not even a mention of that failure in the press release).
Highly paid and highly qualified CEO's shouldn't be making "silly errors." Mr. Horwitz ought to be reading what he's signing. Very embarrassing!
Thanks for the insight. If what you say is accurate, it looks like this one is another stinker investment by Elkhorn Partners like their investment in Comarco. If I were one of Elkhorn's limited partners, I'd be concern about their research manager, Mr. Cadwallader.
Apparently Mr. Horwitz reads this board and has quickly acknowledged/corrected his error. While I couldn't find any relationship between the company or Mr. Horwitz and Comarco, I think it's very interesting that Comarco recently lost is largest (only) customer and is now nearly worthless.
I just did a little research on the company. Management (mostly very long term) and board members own very little if any stock in the company. The company just shut down and un-utilized 23,000 square foot manufacturing facility claiming they'll save $2 million a year. The board paid the CEO a $35,000 bonus for accomplishing this after they requested he look into it (I would think that would be his job without asking).
Elkhorn, which I believe is a limited partnership type investment fund out of Nebraska, owns 25% and appears to still be buying. I looked into a few of Elkhorn's other smaller company holdings, and it wasn't pretty.
I could see this as a possible turn around situation, but considering the longevity of current management and the lack of any substantial ownership by most of the insiders, I just don't get a very good feeling about this one.
Does anyone have any thoughts? Please correct me if I'm off base on this money loser.
The 8-K doesn't seem to be describing Comarco. Comarco is not a machine shop, nor a proprietorship. I have no clue as to why Comarco, Inc is written above Horwitz's signature.
Hey Nip! Why don't you disclose your relationship to the members of the Board of Directors? You seem to know as much about investing as Nick Swenson knows about de-icing airplanes. I purchased my allocation of shares in the rights offering to prevent being diluted by Swenson's scheme, but I would have much preferred to hold my existing position in undiluted shares. Paying out 8% to raise equity is pure waste. Thanks for helping expose these issues.
Hey, Nip's back (or is that Nick)! The only one in the world who thinks the rights offering was a good deal for shareholders. Hey, we only paid out $125,000 to raise $1.5 million. That's only 8% for the money raised...not such a bad deal! If the company didn't have $2.8 million in cash & investments, it would need that money, right? Plus, it only diluted the stock by 25%! I'm so proud of the new Board of Directors.
I believe we were hurt by the rights offering in general. It was severely dilutive at a time when funds were not needed, and as the stock was issued at such a low price it was even more so, however, by Swenson's gang not honoring the stand-by commitment the offering was less dilutive than it could have been.
It does bring up the issue of integrity though. Swenson was well aware of the tax implications when he conceived of the rights offering as they were disclosed (however nebulous) prior to the offering. As he had prior knowledge of the poor quarterly financial performance that was to be announced shortly after the close of the offering, he had an out (tax implications) to avoid having to purchase the additional shares in a "dead money" investment. To me, this reeks of insider trading (in a convoluted way).
I saw a huge buy order yesterday for 150,000 shares at $4.14 of which 30,000 were purchased. Swenson's sitting on a huge pile of cash he controls (pirated in my opinion) from Pro-dex (PDEX) when he successfully won a proxy battle there. He may be trying to use that cash hoard to buy shares in SODI. I wouldn't trust him after what he pulled in their recent rights offering.
It's obvious to me why the Swenson gang didn't honor their stand-by agreement. They knew the quarter would suck, and it would be dead money. They could buy more when the stock price dropped below the rights price.
Hey NIP! Can you tell me which IRS rule precluded the Swenson gang from buying more shares?
Once again, you simply resort to name calling without saying anything of substance. The company's canned response was to say AO and Farnam didn't honor the stand-by commitment because of tax reasons. I would like to know "what" tax reasons. Do you really have any idea?
What happened NIP? Did Swenson instruct you to back off on your defense of his reneging on his stand-by agreement? Since Swenson dishonored his commitment, and he knew about the company's latest financial performance, could we consider his action "insider trading?"