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Annual report out. They did less than $1 mil in sales in Q4. Even by Pola standards, q4 was a disaster. And they can’t even blame that on Covid. There’s no way they can honestly say at the time of the lass earnings call that they had no idea that the present quarter was going to be their worst yet.
And more talk of never ending “temporary” setbacks. They got that PPP loan a couple weeks ago for 1.7 million. But they have to be teetering on insolvency right now. Their auditor now lists them as a “going concern” and annual report says they have resources to operate through about September.
Maybe it will be a bad move in hindsight, but I just unloaded more today, so now only holding a small position. There are a lot of risky stocks sight now that could double or triple right now. And I’d prefer to put more money on ones beat down by the lockdowns but have management I trust then the other way around.
This has been an expensive lessen that solid product and strong balance sheets are still no match for poor management.
Shockingly this held up pretty well today. I feel at this point this is a binary outcome. Either they are heading towards massive dilution/or chapter 11 or they are going to reveal that they can survive the next 6 months and this jumps at least past book value.
It’s a double or nothing play right now.
Has anyone ever had any success getting a real response from their IR or the company itself?
Because even if the annual report it’s complete, nothing is stopping them from issuing an 8k/PR updating on their current situation. If we stay in silent mode, everyone will assume imminent insolvency.
If that isn’t true, we need to know:
1. Roughly their current assets at the moment and how many months that is expected to last then.
2. Do they intend to pursue a line of credit backed by their inventories and/or apply for the newly passed government loan/grant programs?
3. Are the execs going to cut/defer their own salaries?
4. What is known about the tier 1s? Are they, as far as they know, still intending to place orders when this passes?
Silence will be a killer. Share price will be rewarded for transparency. And if they did eventually have to do a second offering, doing it at or above book value is massively better than at 50% book value. You’d think Sams who owns half the firm would understand that.
I guess the hope is that they are putting in the risk factors because the lawyers, and what they end up doing is either secure a loan off of their big build up in inventory and/or apply for the new government lending programs, some of which will turn into a grant if they maintain payrolls.
But if they are going to eventually issue shares, you would think they would want it done at or above book value, not at 40% of book value. These guys need to put out some kind of information of what the actual status is at the moment, what their cash position is, and what lending civilities they intend to pursue.
If they stay in silent mode, this thing could be 50 cents in short time and then they are going to act all confused on the next conference call on why that is.
Another "temporary setback". But "we've never been more excited." [no insider buying after blackout period ends]
Guess we're going right down the wire.
Well, what did they have to report over Q1 pre corona? Still no orders? About to lose a lot of money on Q1? Their cash position likely dwindling? That they’ve never been more excited?
This is a case where in a year, this is either worth $0 or its worth $5+
Well they may have just been shut down...
https://www.mercurynews.com/2020/03/20/coronavirus-lockdown-in-california-what-are-the-rules/
Also, would this apply to POLA? If they needed it?
“The small business loans would apply to employers with 500 or fewer employees, and cover 100% of six weeks of payroll. Businesses must compensate all employees for eight weeks from the time the loan is disbursed in order to qualify.”
https://www.cbsnews.com/news/coronavirus-stimulus-bill-phase-3-senate-mcconnell-trump/
Let’s hope the other telecoms act similarity...
https://finance.yahoo.com/news/why-verizon-just-made-a-big-investment-in-america-amid-the-coronavirus-ceo-154612304.html
Not because of of the disease. But because after a bad q4 and bad Q1 their cash position is likely not looking too good right now. Company insolvency is a real risk if Tier-1 orders get delayed further. How long can they stay open if they have nothing more than a couple million a quarter order book? And why would I want to rely on a supply chain link that may not exist in a year or so.
The CC is going to have to be very well articulated and in a convincing manner that they have an ability to survive the next year. “We’ve been around since the 70s” won’t cut it.
At this point it’s not just about shareholders panic selling. If I’m a would be customer I’m going to consider them a counter party risk given the macro environment. This can self fulfilling but Sams is going to go down with the ship if it comes to that.
The only company I’ve ever personally been invested in that’s been this must if a disaster was one where a South American government nationalized it’s assets.
It’s really a shame.
This thing knows nothing but down. Wondering where the earnings date PR is.
Now trading at .6x book value. And a 18 P/E ratio translates into expectations eventually of only making 2 cents per share per quarter.
If they aren’t going bankrupt then this thing is very undervalued.
I really hope the three of them spend much more time than normal thinking about how they are going to clearly and credibly explain what’s going on right now that creates any confidence at all.
Another big relief rally - pola still falls. There are cruise line companies that faired better over the past 3 weeks.
This is something that they need to address seriously and credibly in the CC - how they see telecom demand for backup power in the relation to the business cycle. Is this something they have to do in the next year or two and therefore it is somewhat recession proof? Or is the timing flexible, and therefore if capex budgets get slashed, POLA is in deep trouble?
Amongst other things, they have a lot of explaining to do.
Assuming they aren’t heading for bankruptcy, at $1.50 this looks like an easy 2x -3x even if they continue to keep stumbling. Any sign of even modest profitability and $3-$5 looks easy.
Problem is when you combined their stumbling with a global meltdown, they may not survive. If the tier ones decide to cut capex this year, they they have no customers and little cash left.
Hitting 0.64x book value
Now worth less per share than their q3 end cash + accounts receivable + inventories.
This thing is less than their liquidation value.
Now trading at .77 times book value. Of course book value is probably also falling in Q4 and Q1.
These guys may have lost the race of stopping their stumbling before the business cycle turns.
Looks like a high chance of a 1 handle tomorrow. Great place to be entering what’s probably another crappy quarter.
In the past it’s been around the 20th of March, no?
This pos couldn’t even gain on a huge relief rally.
At this point, how ugly is q4 (and Q1) going to be? The latter looks like it’s going to be awful too.
That makes two of us (at least).
I don’t see why there is any reason to think that q4 isn’t going to be really bad. The lack of orders announced so far also suggests a bad Q1.
So do they have some good news to report before or on earnings? That’s the lottery ticket right now.
Thanks. Really wishing I had bought Generac 3 years ago. Not pola.
Hope someone also asks them about any plans to court Dish which if the final steps go through will be rapidly building a new network over the next few years.
This might mean the t-mobile orders are coming soon.
https://www.washingtonpost.com/business/2020/02/11/sprint-t-mobile-deal-wins-judicial-approval-ushering-new-era-telecom-behemoths/
I’m assuming this was just hot money leaving after momentum stalled. Other than for technical reasons there was really no reason for the previous rise.
They need orders. That’s it. Otherwise we’re looking at q1 also being a disaster pretty soon.
Still waiting for all these overseas marketing expenses to turn into some kind or orders.
I think q4 is indeed going to be awful. It’s matter of whether they announce some big order between now and the earnings call. If they don’t, this is falling right back down after earnings.
If this pops into the mid 4s, then I’m at the very least unloading a big share of not everything.
Some of this I think is just technical. Oversold stock with tax selling over so we get some initial early January life. Then a few days back it bounced off the 50 day ma the same day the 20 day ma crossed over the 50.
So probably hitting a bunch of technical traders’ screens.
So much for that...
Yeah good to hear it’s moving forward. But they also said this approval was “days away” at the November call.
Don’t think most people interpreted that at 2 months away. By it self this is a small thing, but it appears to be another case or unmet overly optimistic predictions.
On a low float stock that loads half its value last year, this could simply be the end of tax selling and then once it starts moving technicals taking over, once it broke through a couple of resistance points.
It it nice to see some movement (so long to go though). But it’s also possible that the backlog numbers as of end of q4 are still really ugly. I would be bracing for a really ugly quarter. The hope is that there’s something really good in a PR prior to then and/or really good news in the earnings call.
May 2020 be a better POLA year than 2019!