Forum Archive Index - November 2000

["Tony Frodsham" <frodders@hotmail.com>]

Thought I'd add to this interesting debate.

I, along with several friends bought into BDO at $0.25 just before the Tech 
bubble burst.  I have since bought more at lower levels to bring my average 
to around $0.175.

The last I heard the company had around $2m on cash, out of the $3.6m raised 
at the IPO.  This cash is set aside for acquisitions and the current "burn 
rate" is being fuelled from current sales revenue.  I still believe in the 
mgt of the company although they do appear to rather naive when it comes to 
keeping shareholders of a public company informed, especially when the share 
price dropped so dramatically.

I also believe that with the increased volumes that something is cooking 
behind the scenes.  Just hope that whatever it is, it comes with a more 
sustainable business model and adds to the experience of the BDO mgt team.

I also like RNS at the moment and am particularly impressed with the style 
of mgt in the company.  Little hype, much belief in themselves and at the 
core, a viable business.







>From: "Ben Dutton" <bendutton@sharechat.co.nz>
>Reply-To: sharechat@sharechat.co.nz
>To: <sharechat@sharechat.co.nz>
>Subject: Re: Re: [sharechat] BDO
>Date: Mon, 6 Nov 2000 19:24:35 +1300
>
>That's very interesting Adam.
>
>If the NZSE made NZ companies disclose this information, I think the result
>could be a return in investor confidence in the whole Internet/tech sector 
>-
>well, more confidence in companies that deserve it, anyway :-)
>
>Best Regards
>
>Ben
>
>----- Original Message -----
>From: "Adam Rands" <adamlist@iguana.co.nz>
>To: <sharechat@sharechat.co.nz>
>Sent: Monday, November 06, 2000 7:24 PM
>Subject: Re: Re: [sharechat] BDO
>
>
> > Interesting thread guys
> >
> > The ASX has started to publish information (reserves and burn rate) on
>tech
> > companies which they believe are in financial schtuck.
> >
> > If memory serves me right the ASX changed their listing rules about 18
> > months back to ensure they could get this disclosure from recently 
>floated
> > tech companies
> >
> > Given the NZSE listing rules are a shambles I would not expect the NZSE
>has
> > the same rights. It maybe just another benefit  we can look forward to
>when
> > the exchanges merge :)
> >
> >
> > Adam
> >
> >
> >
> >
> > At 05:03 PM 6/11/2000, you wrote:
> > >Hi Warner,
> > >
> > >You are absolutely right, and my statement was rather simplistic - I
>should
> > >have been more clear.
> > >
> > >My understanding is that BDO's burn rate is quite low - when I spoke to
>Ms
> > >Evans one month ago she said that they take a "very conservative"
>approach
> > >to running the company.  However, I do not have exact figures.
> > >
> > >As you say, knowing the burn rate of these companies is paramount 
>because
> > >that is what the market now prices into its valuations - perhaps if BDO
>was
> > >to release their monthly burn rate investors would have a clearer idea 
>of
> > >the current cash position of the company.
> > >
> > >It definitely would be an interesting piece of information to have!
> > >
> > >Best Regards
> > >
> > >Benjamin Dutton
> > >
> > >
> > >
> > >----- Original Message -----
> > >From: "Warner Lamb" <cloud9@i4free.co.nz>
> > >To: <sharechat@sharechat.co.nz>
> > >Sent: Monday, November 06, 2000 5:54 PM
> > >Subject: Re: Re: [sharechat] BDO
> > >
> > >
> > > > Ben, interesting you said that BDO was trading at a discount to cash
>asset
> > > > backing. I think that at the time 12cps was talked about?. The 
>problem
> > >here
> > > > is that it means nothing if investors have already decided that what
> > >theyre
> > > > going to spend it on is not going to produce returns 12 months out.
>Since
> > > > cash burn rate has become such a focus, current cash on hand is only
> > > > important to work out how long it will last until the proposed 
>venture
> > >turns
> > > > a profit. Hence with BDO, investors decided that the proposed online
> > > > ventures future was worth less than current cash on hand. Im sure 
>you
> > > > already know what I mean but thought I bring it up. The future
>perception
> > >of
> > > > that cash and what it could do should be reflected in the 
>shareprice,
>of
> > > > course we (the market) are not right very much, and with ITC I'm
>starting
> > >to
> > > > think this is the case. (same for EFC at around 10-11c)
> > > >
> > > > R
> > > > Warner
> > > >
> > > >
> > >
> > 
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