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The site currently shows a SIRI with an
Altman Z"-Score of -9.6179. Any score below 1.1 suggests a likelihood of bankruptcy. The about section on that site (which I won't link to again, out of deference to you) goes into more detail about the significance of the score and how it's calculated.
Site updates its data every day
Altman Z"-score it shows for SIRI still predicts bankruptcy.
Don't worry though -- these models aren't right all the time. Site says there's a false positive rate of 15-20%: http://shortscreen.com/about
Because ______?
The model is based mainly on the financials
More detail on what the Altman Z"-Score model is and how it works is available here: http://shortscreen.com/about
Altman Z"-score model predicts bankruptcy for SIRI
See for yourself here: http://shortscreen.com/
Is this a joint venture?
Or did AYSI license the technology to this Indian company?
Curious.
Not holding any cards.
There wasn't any additional info in Gene's e-mail beyond that. Like I said, that was the gist of the message. The only difference is that I paraphrased it instead of quoting it verbatim, as I didn't want to quote it verbatim without his explicit permission.
I should note that I did ask him in my response when we might expect that interim report, but I haven't heard back from him yet.
That raises other possibilities.
For example, the procurement exec could say that he doesn't need X number of wear plates now, but he wants to have 0.2X every year for the next 5 years, and he's willing to sign a 5-year supply contract to ensure he'll have that available. Maybe that was the dynamic with the BHP deal?
Let's say you are a procurement exec for
a major mining co. And you think Super Arcoplate is the best thing since sliced bread. Would it make sense to A) replace your current wear plates with it now, or B) replace them with arcoplate piecemeal, as they become worn out? That sort of decision could have a big impact on the shape and timing of revenues.
How do you get 3x?
Apologies for that brain cramp:
Those were my notes on my conversation with DSNY CFO Fred Vandenberg.
You're not much older than me
But I aim to be thorough. Somehow I doubt Gene has time to fish, but I asked him nonetheless.
When I compiled everyone's questions
And added a few of my own, the list got pretty big. In my e-mail to Gene, I told him that he shouldn't feel compelled to answer all of them. I wrote, "I would be grateful to read your answers to whichever of these you have the time and inclination to address". Gene wrote back, "We will do our level best to answer all the questions my mid week next week".
My assumption is that Alan will be the one actually writing the response (in consultation with Gene, of course).
Questions for Alloy Steel International Management
I don't know if all of these questions will get answered, but here they are:
How did you come up with the idea for Arcoplate?
What made you decide to start a company to manufacture it yourself, as opposed to trying to license the technology to a large company?
What sources of inspiration have motivated you in inventing this technology and building your company?
How did you decide which application of the technology to focus on first?
When dealing with a multinational company such as BHP, are procurement decisions made separately by region? I.e., would you need to start from scratch in presenting your product to, say, the unit that runs iron mines in Brazil?
Often it seems that in technology and business having a better product does not guarantee success in the marketplace – what, in addition to the quality of your product, has enabled you to achieve your current success?
What are the biggest challenges you’ve faced so far in presenting your product in the marketplace? How did you (or how do you plan to) overcome them?
Do you have any plans to list on the NASDAQ?
What is the status of the Mongolian Joint Venture?
What kind of revenue is expected from the new mill at full capacity? Is it anticipated that both mills will be at full capacity for the rest of the year? Are plans still on track for 4 mills sometime in 2010?
What is the capacity of mill 3 and 4 compared to mill 2?
Will the recent AUD strength have any effects on overseas sales?
Funding for expansion has traditionally been from operations. Since expansion seems to be ramping pretty fast, can we expect anything other than funding from operations for the new mills, etc?
Will you need additional real estate for the planned new mills?
What is your planned capacity by the end of 2010?
Is Super Arcoplate expected to carry higher margins?
When do you plan to begin and complete construction on the new mills?
Is the plan to build 2 additional mills based on known interest for orders that can fill that capacity or is it based on speculation about future demand?
Is the company seeking any additional patents?
What was the total cost for construction and testing of Mill #2? Are 3 and 4 expected to be comparable in cost?
Are there any plans for additional JV?
Will the new mills be only for Super Acroplate wear plates, or are there plans to use them for the 3-D cladding process for pipes and chutes as well?
Are there any succession or contingency plans in place for the CEO and CFO positions? How long do you want to stay at the helm of the company? What about the buildup of a bit a broader management structure to digest the anticipated growth of the company and to enable each key person to focus on his/hers core capabilities?
What are your longer term plans for the company? Would you consider being acquired by a large public company or by a private equity firm or do you envision Alloy Steel International remaining growing as an independent firm over the long term?
A shareholder from Washington State in the northwestern corner of the United States asks what kind of fishing you do in Western Australia, and if you are familiar with an author from his state named Patrick F. McManus. He says if you have time to read for pleasure during your business flights you might enjoy this author’s books.
Notes on my convo with CFO Fred Wilson:
http://thehackensack.blogspot.com/2009/10/conversation-with-cfo-of-destiny-media.html
One of the questions I asked Gene
Related to this was about how procurement decisions are made at multinationals such as BHP. I assume procurement decisions are made regionally (i.e., for BHP to use AYSI's wear plates in Brazil or North America an executive in one of those regions would have to decide on that) but at the same time, I assume it ought to be easier to sell AYSI's product to a BHP exec in Brazil or North America once you've already sold it to their counterpart in WA. So maybe Gene can give us some color on that.
Yeah, I was planning to add too.
I should have added more when the only place I read about USEG was on my blog.
Check out that tape today.
One of the questions I asked him
In the e-mail I sent him this week was what made him decide to start his own company to make this, instead of just trying to license the technology to a large company to begin with.
Amazing.
LF, question for you:
How much did AYSI initially raise when it went public? Not that it's relevant to the future direction of the stock, but it's relevant to a discussion I'm having on a venture capitalist's blog. I just find it an amazing contrast that VCs can pour hundreds of millions of dollars into money-losing companies while someone like Gene can build a viable company starting with so much less.
That's one of the questions I sent to Gene.
You're welcome.
My limit orders are in the low 2's, so I'm not the one driving the price up today. I suspect the news out of Rio Tinto (that it sold a record amount of iron ore last quarter) is behind the spike. I heard that on Bloomberg TV last night, though the anchor noted that analysts don't expect the Chinese buying pace to keep up at these levels next year.
Update on the questions for Gene
The list of questions ended up being fairly long. Gene wrote back to say that he and Alan planned to try to answer all the questions by midweek next week. In light of that time frame, I am going to revise my previous comment about not placing any trades until I post their response. I am going to place additional limit buy orders today but I won't modify them if they don't fill until after I have posted AYSI's responses to the questions. The salient point remains that I won't be buying or selling AYSI based on answers received from the company before posting those answers on my blog.
I'll ask about that, but in a previous
conversation, the CFO did mention another potential application of Play MPE: transmitting "dailies" (i.e., daily footage produced during the making of a movie). For example, a crew on location in Vancouver could use Play MPE to send the dailies to editors or producers in Hollywood.
I didn't make money on the other one
But that's only because my current broker doesn't let me short stocks with PPS that low. I'm going to open an account with one that does though. Using the Altman screener I'm going to short some micro turds.
The name sounds vaguely familiar but
I don't know. As for Anon, I'll put this right out there: I got a fill on a small order yesterday at $2.27. I won't be placing any more AYSI orders until after I have published the Q&A with Gene on my blog and linked to it here and on the Yahoo! message board for AYSI.
If you have questions for Destiny Media's CFO
Leave them in the comment thread of this post on my blog: http://thehackensack.blogspot.com/2009/10/questions-for-cfo-of-destiny-media.html
I'm going to give him a call after I read tomorrow's earnings release.
FYI, Gene offered to look at some questions.
I plan to write them up and send them to him later tonight.
Altman models are 2-for-2 here.
The Z-Score model predicted that AYSI wasn't in any danger of bankruptcy, despite the weak quarters it posted earlier this year. The Z"-Score model accurately predicted... well, you know.
The 7-day sends are higher now than
earlier this year. If they are consistently profitable on the back of Play MPE from here on out that would be a huge positive.
I'm less optimistic about Clipstream though. Even if it is a better mousetrap, it will be tough to dislodge established products like Flash.
Thanks for those questions.
Volatility is a flawed measure of risk.
Think of AYSI as one example: it has been a lot more volatile than it has been risky over the last year. That doesn't mean AYSI hasn't had risk, just that AYSI was not as risky as its volatility implied.
Instead of volatility of a company's share price, it's better to focus on the future prospects for that company's business, and the financial strength of the company (to gauge the chances it will be around to profit from those future prospects).
Good points, especially this:
In fact, the individual investor would be doing the right and honest thing to disseminate the information so that he doesn't have an advantage and so that the information cannot be considered "insider info" - thus, enabling him to invest lawfully once made public via a blog, etc.
I always thought the point of Reg FD was to keep any investor from having an unfair advantage by having info other investors don't. But if you hear info and publicly disseminate it before acting on it yourself, that seems to be in line with the spirit of the law. I'll ask my attorney just to be on the safe side.
One safe way to handle this, IMO, is to do what another company I own (USEG) does. A couple of months ago, they issued a press release with big news, and then called me the same day to elaborate and answer my questions on it. I then posted notes on our conversation on my blog ( http://thehackensack.blogspot.com/2009/08/conversation-with-useg-management.html ). I think this is where conversations with bloggers or journalists can be helpful: not in announcing new deals, etc., but in elaborating on and clarifying information they already made public.
What annoyed me about the anonymous commenter on my blog is that it seems to be he is using fears of Reg FD to discourage the sort of communications most public companies engage in. Yeah, they don't all chat with bloggers, but that's because they have other outlets (e.g., going on CNBC or Bloomberg). Small companies should get a chance to clarify their stories as well.
I wouldn't even joke about that
last line of yours. Especially not on this site, given the events of last summer.
I made a similar request on my blog
and got the biggest headache there from a someone who claims to be an AYSI shareholder: http://thehackensack.blogspot.com/2009/10/questions-for-ceo-of-alloy-steel.html
What a pain in the ass.
Questions for Gene Kostecki?
Gilead tells me Gene is open to chatting with me now, so I'll probably contact him next week. Before I do, I thought I'd solicit some questions from the board.
I've got a limit order in the 2.20s
We'll see if it gets filled.
Given the relatively low cost of the second
mill, and that AYSI ought to be able to finance the building of more mills organically from cash flow, I agree with LF. Why license the tech when you can just build more mills and maintain control?
I assume they will be released in December
I haven't heard anything to suggest otherwise.