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Well call me a fool. I added again just now at $2.32 on top of my $2.38 and $2.72 a month ago. There's an intrinsic value point in this company somewhere along the price curve. I can't imagine the private investors that paid $10,000,000 at $2.50/share are very happy at the moment. Maybe their voices will be a little louder in discussing issues with Ron! Revenues have to be up a significant amount either this Q or next.
Just a quick comment: Couldn't resist buying in at 2.38 today (only 240 shares aquired but more pending). I'm not down on TKO believe it or not. I think today was final capitulation the way prices dropped on large volume and big blocks... it may represent a serious turning point. As for management, I think they are simply swamped with merger reorganization and contract implementations. I'm betting revenues show some major improvements this quarter.
I agree with you and GLL on several points.
$2.54 was a rediculously low close today. So much of the price decline the past three weeks has been negative emotional or knee jerk RETAIL trading (which is 80% of ownership). I'm very tempted to double up here on my position tomorrow AM.
Momentum has been starting to creep back up the past few weeks, and with all the new acquisitions, TKO revenues have got to be building up significantly over last reports. It's a much larger company than the last time it saw the low $2.20's, and the current $2.50 is the price the Private Placements negotiated "in" at three months ago. We also said, as a group, that $2.50 represented full dilution of shares.
IMO, I think this is a great "in" price to wait and see what happens to revenue over the next two quarters. We might have a shot at regaining 25 - 30% of the losses over the past three months. We'll see what tomorrow brings. Maybe I'm being too optimistic.
Night all.
Wow, I just got back in to see your posts. Thanks for checking it out. I didn't mean for you guys to do detailed research. I just thought you might know of the top of your head what it meant. Thanks a bunch for your efforts!
Now, anyone got a magic potion by any chance to make the price go up?
RBT... Can you tell me what an "e" means next to the trades on level II. (I think you answered this for someone once before.) The last several trades posted looked like this:
Price Size Exch Time
2.60 100 AMX 16:01:50
e 2.60 100 PAC 15:58:14
e 2.60 100 PAC 15:58:13
2.60 5000 NDD 15:58:05
2.60 200 NDD 15:58:05
e 2.60 200 PAC 15:58:01
2.60 800 NDD 15:58:00
2.60 1000 NDD 15:57:59
2.60 800 NDD 15:57:58
2.60 200 AMX 15:57:51
e 2.61 100 PAC 15:54:35
Notice they all appear next to PAC exchange trades. I know "m" is market close, and "t" is a late trade posting (I think).
Thanks!
BSD
My calendar reminder for this message came up this morning. I was wrong about the markets rising into mid-April, but TKO is down 15% from the $3.12 price we talked about 6 weeks ago. I can't see it going any lower at this point, but we need good Q1 revenue results to fuel a rise in price from here. Anyone have any guess when we might see results reported.
Gip
The US markets are shaping up into an impending disaster. Stagflation is on the horizon, if not a full blown recession. I’m looking for the Dow down to 11,500 and the Nasdaq to about 2200 by early June. Then we’ll see what happens next! I’d be a seller into any market rallies from here into June unless you can afford to hang on. TKO looks like its flatlined (I'm still sitting on 5000)... no heart beat. Anyone got a set of paddles?
It was noted by a Republican Senator during one of Sunday's talk shows, can't remember which one. He also commented it was having a negative impact on the reputation of the military, and that many (over 50%) National Guard units were returning from Iraq without weaponry and equipment, putting an unreported financial burden on state goverments to re-equip them for homeland service.
I vaguely recall the US "detaining" 5 Iranians, but don't recall what for (suspected of providing IED components I think). Bush has been looking for an excuse to take on the Iranians, so much so, Congress has been looking for a way to limit his ability to take military action or make war (not that we could anyway; we've been pardoning drug addicts and felons to fill the ranks of our millitary the past several months).
We haven't had diplomatic ties to Iran in 28 years, so you're probably right... this is the child acting up to get attention, for internal reasons maybe like North Korea. (Seems like you have a pretty good view of events from that soap box Thanks for your insights!
GLL...
What's the public reaction to the British Navy hostages taken by Iran? Is there strong outrage or mild concern? Seems to have effected European and US markets primarily through impact on oil prices. Asia seems to have little concern. What do you think Blair will do?
Gip
They paid roughly 3.5 times revenue which seems a bit much (unless Ethostream is highly profitable). Then again, some part of the payment was in TKO stock.
At least there is a strong synergy between the two companys in their selling approaches to the MDU marketplace. It would be nice to know whether they plan to merge and retain sales teams and how they fit operationally. They mention: "EthoStream utilizes the Telkonet powerline communications (PLC)-based Telkonet iWire System(TM) as the broadband Internet backbone for many of their installations". So new TKO sales to Ethostream's existing customer base was not the motivation for acquisition. It appears TKO was just after an extended product offering only.
Telkonet Acquires Wireless Solution Provider EthoStream
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B0EA5A9B2%2DD039%2D4B78%2DAD6E%2D652A4B13A29...
Telkonet Acquires Smart Systems International
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B41BCE842%2D2827%2D4EAA%2DA84F%2D678D463A844...
IMO
Today's market collapse is history repeating itself from Oct. 1987. Financial Firms have been just looking for an excuse to drop the indexes, and have been setting this "China market decline" senario up since last October, hyping it up in news reports since early February. (A LOT of US investment dollars have been flowing into China's market the past year, and this will certainly stem the flow benefiting US firms!) The fact is, only China's Shanghai "A" list stocks (owned only by the Chinese nationals) were 50% over priced and of concern to their government. The Shanghai "B" list securities, which are traded here and through mutual funds, were far less succeptible to any major declines. I noticed about mid day when the decline in US markets began to subside, other BS fears began flying out of the Financials about major recession, housing failures, consumer gloom and doom... which frightened the rest of the nervous nellies out of the market in later trading. The mysterious "computer glitch" which caused the sudden 100+ point drop mid-afternoon in the Dow of course was an accident as well. (Hope the SEC looks closely into that one in particular.)
Stops got cleared today and margin calls will be settling the rest of the week. Special interests will be back stuffing their pockets with thrown away shares Thursday and Friday taking the markets back up on thinner volume, just like '87. Bond prices moved higher today with money shifting out of the markets and into treasuries, ergo interest rates are coming down because of this scare tactic. Good news for the housing sector and the consumer. Fed will be lowering rates later this year as a result. Who says the government has no economic policy plan? Just my opinion of course!
Seems the "thought control" police were a bit busy this afternoon. [That was George Orwell's prediction wasn't it (1984)?] "They" took out a couple of mine, but selectively left bunches of others. Seems some posts "are more equal than others". Ooops, this is off topic. "They" can delete it too!
Well for your sake and the other longs here, I certainly hope it does run up higher too Isaiah. I'm going to pass on getting back in here, and hunt for other investment oportunities elsewhere. Good luck to all!
By my calculations, there's little chance of it ever seeing $5 this year, even in a buy out.
Sirius
Have you been following TMWD's run since 12/27? Read my posts on IV if you're still into this stock. We'll be in the $8's by December I think. Lots of room to still make money. Market is also thinking an acquisition might be possible in the next year... my guess is it could be Oracle.
TKO seems to be scraping out a baseline in this range... good sign. I've got my buy's in, but no go yet!
Wall Street doesn't like a mystery with surprise endings, and in recent weeks, TKO has come up with some "doozies". Acquisitions, private placements, dilution, long length contracts, emerging markets, possible buyout, increased revenue and positive cash flow. What's not to understand... in the face of uncertainty, the market drifts lower.
BSD,
I tend to agree, the "cash flow positive" prediction by year end is very positive. It will make the institutions sit up and take notice, and maybe bring in more investment dollars. The 25 mil outlook is a good jump in revenue, but I think the street was expecting more impact. Also on the positive side, the GE deal isn't temporary revenue, and will continue to increase cash flow at least over the next dozen quarters. I think the traders have abandoned this stock recently causing some of the drop in momentum.
Gip
Shareholder letter is out:
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B1D5A5242%2D407D%2D44AE%2D9466%2DF97F629F643...
$25 mil in sales projected for 2007. Not much else is new.
"Everyone in the know doesn't expect much from Q4 earnings... "
That raises a good point: I'm anticipating a 10 - 20% increase in revenues, with around a 10% further decline in earnings for the quarter.
What does everyone else expect to see?
Ha ha ha ha ha ha ha ha, (short breath), ha ha ha ha ha ha ha!
I can admire your patience. Lets see if we are above or below $3.12 by 3/30. Markets usually rally into mid-April anyway, and we'll see if TKO meanders any particular direction over the next six weeks. I'll mark my bring-up file to remind us. Boogeyman... ha ha ha ha... I liked that! Thanks.
Sonny,
We WERE headed south until someone threw an "at the market" buy out for ~27,000 shares running it up to $3.23. Maybe a specialist or over zealous investor? It's weaking again though... this could become a very slow spiral down over the next six weeks to the $2.80's with occasional spikes on "news".
"there would be ~ 68 million shares outstanding and the share price would likely drop to $2.51"
Sirius, now we know why the private placement to ECM was set at $2.50!
RBT... that in my opinion becomes your "fair value" point. No need to work with P/S or P/B ratios.
Sirius... I think you have part bloodhound in your veins (along with some leftover wine from last night). Great job of sniffing out the details.
Major details like dilution are easier to hide when over 80% of your shareholders are retail. The next question is which direction do we think the share price is headed from here?
You may be right Zen! My understanding was that they were uncommitted shares held in reserve by the company for future distribution. Maybe they're both. Don't know off hand where to check that out... anyone know for sure?
BSD... I respect your opinions!
Can you explain to me why TKO management isn't gaining institutional investors, and in fact according to some, are loosing existing institutional investors? I admit it seems they certainly can make deals, but do we know if any of them are profitable or are they give aways to get in the door? My personal experience says they probably have bitten off more than they can chew with GE.
You're obviously comfortable with your investment. And I'm NOT saying TKO isn't potentially a great long term investment opportunity. I am saying they're dead money for the time being. The long awaited GE announcement finally arrived with little to no lasting impact on share price because of perceived market dilution. So if I'm a long investor waiting for that big gap up move (and afraid to sell because I might miss it)... it just isn't likely to happen, and the downside risk over the next year is still significant. Maybe I'm wrong, in which case I'll jump back on the band wagon when I see the first certifiable improvement in GAAP earnings, but it won't be for at least one year IMO. Anyway that's my reading of the Tarot Cards, do you see a different outcome this year?
As I see it Zen, it doesn't matter whether the float has been increased yet or not. The market has discounted the dilution into the purchase price of existing shares. Now the 6.2 million shares will likely come from the uncommitted outstanding that are shown in shortsqueeze:
Total Shares - Float 49,239,000
Total Shares - Outstanding 56,850,634
They might also increase the maximum available outstanding shares filed through their state of incorporation, or through a stock repurchase program (very unlikely). In any event, the buy side of the market is aware of and has priced into the shares an additional 6.2 million shares of dilution, regardless of where the actual shares now rest. I think the evidence of this is how easily the GE spike was wiped out.
I agree Zen. It is now clearly apparent that the dilution of shareholder value by 4 million shares began effecting transaction pricing Feb 2nd at 2:15 EST when the private placement was announced. The 2.2 million shares under warrant appear to have also diluted shareholder value, even though they have not reached the $4.17 strike price yet (but certainly will given a 5 year window).
IMO... apparently to mask and confuse the effects of the 6.2 million share dilution, the two acquisitions were also announced at the same exact time as the private placement. This was followed one trading day later by the GE deal, which apparently leaked out Feb. 5th judging from the market gyrations. Once stablized on the 7th, the share price settled to a trading level of $3.50.
The total dilution of share holder value is .89 of share price (50,000,000/56,200,000). Equivolent investor valuation factoring in the market impact of GE is $3.50 X .89 or $3.115 per share.
With the close today at $3.12, it would seem the marketplace has now digested the GE news with the dilution effect into the shareprice. IMO, LAKingPhan is correct that dilution has been occuring. The decline in momentum he noted since the GE announcement reflects its quick absorption into buyer pricing.
You may recall I originally raised the issue of dilution in post #3734. I also fear the cost impact to TKO of GE's custom product requirements over the next 6 - 12 months. It will probably have significant negative impact on future earning through 2007. Likewise, the two acquisitions, if concluded, will likely result in a flat, to slightly negative impact due to an increase (temporary?) in operating expense.
We'll see what TKO has to say in it's guidance during the CC, or interview, or whatever they issue for a year end offering. However, I expect to see flat guidance and a deteriorating financial picture as the year wears on. That will weigh on the share price from here on out. I would jow regard TKO as dead money through 2007. Perhaps the institutions see the same thing.
Thanks GLL...
I went back and reread this PR, but couldn't find anything about their covering inventory costs, unless that's what "co-develop" means:
http://money.excite.com/jsp/nw/nwdt_ge.jsp?news_id=pzn-113203&feed=pzn&date=20070206
Specifically it says TKO "has signed an exclusive supply agreement with GE Energy to co-develop an innovative custom product"... "Over the next six months, GE will commence the first installation phase"... "to further develop and refine the product, customizing it to be compatible with all the various types of substation equipment."
At the risk of sounding overly pessimistic, when GE Energy absorbed Astropower, they only paid for its assets and "certain debt", which I believe included its management's stake in the company. Shareholders lost everything in the bankruptcy. While I am by no means implying this is GE Energy's intended goal, I am extemely skeptical. GE's track record of purchases involve distressed businesses with whom they do business. Most notible of these in my mind was GE's acquisition of Xerox's finance division 5 years ago duiring their $1 billion asset divestiture effort to stay solvent.
Again this is one of my reasons for concern. That and their lack of transparency. I'm probably being overly cautious.
I'm going to toss out some of my thoughts on GUIDANCE!
We ALL expect great things to show up in TKO's guidance for 2007, but I'm not very sure expectations will be met, just like the previous announcements which were already built into the share price. Here's my thinking!
Custom product builds (like GE's) are more expensive than you might imagine. For a small company like TKO, it means added engineering development, perhaps new production line set-ups at their off-site suppliers, increased inventory expense and service support. In other words, it strains an already meager cash flow... and unless GE is paying up front, revenue is AT LEAST six months away. Margins are likely to be THINNER on custom products than their standard products. I've experience this first hand. GE also has a track record with Astropower (solay panel manufacturer). They bought the assets of APWR when they went bankrupt to form the GE Energy division.
We also don't know the financial impact of the two new companies on revenue and earnings yet. Absorption plans and duration for integration of management, accounting, sales, and administrative will be time consuming and a financial drain until accomplished.
Lastly, TKO management's competency will be tested on the operations side of the businesss. (They seemed to have done well on the financial and product engineering sides thus far.) The fact that manufacturing is outsourced, however, could be a disadvantage.
I'm sad to see Walrus and GLL taking sebaticals as we enter the ramp up to 3/8. Their imput would have been helpful prior to company deliverance of information.
Just some thoughts... any other opinions?
Probably 40% of the stocks I follow closely took big hits (1%+) today, including apple, google, cisco, comcast, verisign. Fed regional comments shook market confidence a litle bit, plus many traders don't want to hold over a weekend. Monday show show some gains, probably after a weaker opening (when I hope to buy).
Good call guys! I set a buy at $3.04. I'll leave it til 30 minutes before the close, and see where we're at.
Hmmm... for dinner I'm looking forward to leftover chili from the Bears game
last weekend. My life is bitter - sweet, but now complete... sigh!
Zen... in this case "co-develop" probably means GE defines additional specifications for a custom product, and TKO designs prototypes integrated with their standard (patented) iBridge IC board for GE trial testing and TKO production.
Sirius, my guess... their primary concern is managing product demand. The pipeline is small at this point, and advanced large scale announcements would swamp production and installers if it were not restricted (managed as a beta test) initially. Could lead to customer complaints! A coordinated product release could take up to six months for pricing, production, training (sales, installers, VAR's, and service), QC & SLA standards, packaging and private branding). GE is relatively easy to work with by the way... IBM is impossible!
I know, but things were getting wound up a little tight, and I needed to stay loose.
Correction to what I wrote: I left out the bold.
"If you're a long waiting to recover, and TKO hasn't doubled in price BY THE END OF THE YEAR, I'd get out".
"GE disallowed TKO from giving guidance"...
Let me throw my two cents in here.
Firstly, if GE wanted to buy TKO, they could pay 100 time the current share value, and not dent their bottom line. I'm sure they couldn't care less about controlling TKO's share price!
Secondly, GE has no ownership steak in TKO, and the TKO BOD has a fudiciary responsibility to act in the best interests of shareholders keeping them apprised of important financial DETAILS. The are not obligated, however, to reveal the details of any pending, or for that matter, inked contracts with clients. Companies frequently request suppliers not to reveal their purchase of products or their intended uses. If fact, doing PR's or Sales Application Bulletins for sales purposes always requires customer sign off to prevent legal entanglements if info wound up in the client's competitors hands.
TKO is one of the few companies I've encountered, however, that has SO MANY leaks through brokerage contacts (and I don't mean the ones presented on this board). I would wager much of the impact from the four recent announcements was already priced into the market from the $2.30's and up. The surge and retracement can be expected.
I agree the direction is set and the rewards are on their way... but only after the TKO financial reports are made public to shareholders and brokers. Don't throw the baby out with the bath water! If you're a long waiting for to recover, and TKO hasn't doubled in price, I'd get out. Prospect obviously are looking much better that 6 months ago.