Forum Archive Index - April 2001

["Peter Maiden" <pmaiden@xtra.co.nz>]

So an analyst said it was unlikely that Advantage's share price would increase in the foreseeable future (Infotech - Monday) and other analysts are pointing out that current market cap of $46M is less than the total of it's acquisitions over the past two years.

 

If some 'earnout targets' are met by Aldridge Punter they are due another $1M next week. If paid in shares another 1.4 million shares needs to be issued - quite a significant dilution of existing shareholders interests.

 

A few other deals structured this way with possibly (depending on these earnouts) more payments (or share issued) being made to pay the balance of acquisitions. Whether cash payments are made or shares issued it impacts adversely on shareholders.

 

I lost count of the number of options issued to staff and under the staff incentive scheme last year. Are these now paid in real dollars now the share price has fallen? if so real expense to the P&L with reduced profits (or bigger losses) - or do staff now get a larger number of shares?

 

Anybody have any knowledge as to these earnouts? and what future payments Advantage are up for?

 

Large potential downside to the Advantage shareprice if these deferred payments still need to be made.

 

Cheers

 

Peter

 

Disc:  don't have any  ADV - just a warning that all does not appear well. Allthough heaps off a high is ADV a bargain? - be careful if tempted. I feel sorry for those who recently got caught when the price went from $1.00 odd to $1.50 odd - look at  what's happened since. I wonder if the comments Mr Christian made at the last AGM haunt him now?