Forum Archive Index - April 2001

[nickkearney@xtra.co.nz]

john (and any others who want to listen!)

Stay away from adv.  The share is heading south, has done for a number of 
months, and there are NO reasons pulling it the other way.  
It is a loser at the moment.  I agree wholeheartedly with gerry's comments.  
Do not go near a share that is going south unless you can sell short.  If you 
want to make money, why would you invest in a company that has a graph that 
looks anything like ADV's.  It has all been downhill for ages.  The opportunity 
cost of investing in it is huge.  If you are aching to throw some $$$ at it 
then wait until it settles at a price.  Your guess is as good as mine as to 
what that might be but it certainly isn't settled yet.  Stay away until then I 
say.

Cheers

NK

> From: "John Weernink" <johnw@cybernet.co.nz>
> Date: Tue, 10 Apr 2001 22:22:44 +1200
> To: <sharechat@sharechat.co.nz>
> Subject: Re: [sharechat] ADV - more shareholder dilution to come?
> 
> Peter,
> 
> Thanks for your background info of ADV. To be quite frank, ADV give me the
> creeps!! I have been in and out of it a few times. Bought and sold last week
> because I didn't like what I heard and read. Having knowledge of the IT
> industry in New Zealand, work is drying up fast which does not bode well for
> ADV either. I think the next point to consider stepping in is at 30-40 cents
> and even then there may be further room to the downside.
> 
> Anyone else who can shed some more light on ADV, please contribute to the
> panel.
> 
> John
> 
> Peter's Email:
> 
> 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
> 
> 
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