Forum Archive Index - April 2001

["G Stolwyk" <stolwyk@wave.co.nz>]

 

 

Yes, John,

 

One always reads about new contracts but what a shareholder wants to know is how rampant the competition is!

 

I have studied TMN, SNX, SOH and others and when one strips away the veneer of publicity, one sees that they are working in a very competitive world! 

 

Staff costs are high, net margins are slim! 

 

There has been a lot of talk about Efftpos, a reasonable source of income but the wage bill could be difficult to overcome or as they say: the cash burn rate is still high!

 

Heavy reductions of staff will lead to low morale and capable staff could be looking for safety by joining other firms perhaps? There are other costs as well.

 

Senior staff could insist on hard cash at such low share prices rather than options.

 

The wage bill will keep on rising followed by further reductions of staff. 

 

ADV used to make a " massive " use of the media but this has been curbed, lately.

 

Before long, this stock may lose its position in the 40 index - RBC to take its place at end of April? - and that should lower its current status even more so.

 

You were referring to a possible 30 - 40 cents a share ? At that point, the stock could " lose its centre of gravity ", you could see a drastic slimming down of the entreprise; much less staff and a possible recapitalisation which will increase the number of shares.

 

I assume that they will act in time to prevent such a setback! 

 

The longer term investor may consider other stocks instead! And there always are!

 

Those are my opinions!

 

Gerry