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There is no dilution. If there was a registered stock sale we would all know about it, it has to be filed.
Here is some help: Mutual funds and laddered bonds! Seriously, reread all my replies to you and all your questions will be answered.
Thanks!
You are still missing the point and continue to evade my points.
Walt said the same thing earlier, there is nothing new going on that is has not been told, shared, or released. So until they verify their revenue projections with an actual 10Q, not much happens. It is really a lot less difficult then you make it out to be. Numbers talk, bullsh*t walks, right? Right now it's all a bet to see if it pans out the way Ron has told the story. There is nothing else he can say, aside from some big annoucnement (which I am not counting on) that is going to make anyone jump up and bid the stock up. If he is full of it, the stock will melt. If not, there will be money that is interested.
As usual, I respond to one of your posts and actually try and bring some discussion to the table and you have no comment on it.
Unlike GLL's thoughts, I know you are not short TKO. Which if you were, would at least shed a little undertanding into your posts.
Oh well, you keep posting rhetorical questions and I'll keep responding, hopefully someone gets something out of them.
My problem with your answer is you are just looking to banter rather than dialogue about pertinent issues such as valuation and hypotheticals, instead you just continue to come up with questions that have no answers.
Take the following for whats it worth: every trade you enter should contain a plan thant includes price targets and an exit strategy. If the risk reward profile does not match up, you should not be in the trade. It makes no sense to risk $100 to make $50, especially in a specualtive stock. If it does not work out, close the position. Losing trades happen, its part of the game. As long as you clearly define your risk/reward targets, you can be wrong more times than you are right and still make good money in the market. As I said, I am not trying to be condescending, I am merely passing along some advice, take it or leave it.
I have no idea what got you into the stock the first place, but has the prospect for the company got better or worse since you have become a shareholder?
Sure, I will answer that. Then you can answer my question.
My valuation for the stock is higher than what it is now. I have TKO currently valued around 2.25. I believe if they hit 20 million this year it should be trading around 3.50.
I think the sell pressure is coming from some investors who don't want to wait a couple of quarters for this start moving up. Also, stops were most likley hit yesterday and now sell orders are being executed. Of course I might be dead wrong and the stock could go to zero. I dont think that is the case but I will close half my postion if we take out the 52 week low.
Now, I'll ask you why you did not sell on your own advice? No offense, but you dont seem to have much of trading plan, you said 'you will hold on until it gets back to break-even and get out', or something thereabouts. Not really a strong risk/reward profile, if you think its going lower and you dont expect to make some kind of mulitple of what you are risking, why hold on? To break-even, is not an answer.
Big hitters? Do you actually watch the stock trade?
You speak as if you are wishing the stock down, your risk/reward strategy boggles me. What exactly are your price targets up and down side? is there any reason you dont sell it now and buy it back lower?
You are correct Sirius. I think GLL meant Specialist. I don't think AMEX releases the names of the Specialist and what stocks they cover but I would be interested to know what other companies he/she covers. Just an fyi, Specialists at the exchange do not exactly work for the exchange per say, they are employed by member firms like Spears (SLK), ABN, etc.
I am actually starting to look forward to your posts!
Since you clearly don't respond to anything that provides any kind of insight to your questions and concerns, I have a question for you: as you seem to have a great foresight, having accurately predicted that the conference call provided nothing new and the outlook for TKO is as bleak as ever, would it be wise for me to sell now before we hit your target of 1.70?
Again, your facts are wrong. There is a big difference from being profitable and cash flow positive. Ron indicated they may be cash flow positive Q4. He said he does not anticipate having to go to the market to raise equity. He said at this point they can get bank financing to offset immediate cash flow needs if situation dictated.
As for them selling their postion in MSHI, it doesn't seem to be an option. Ron mentioned they may have a short term lock up on those shares but he was not sure, possibly end of fiscal year. So selling MSHI is not an option right now anyway. If they did sell their stake it would probably be very short sighted anyway as Ron also indicated that MSHI appears to have a future ahead of them.
Hope this was helpful and answered your questions.
I take it from your post (and I, for one, do enjoy your sarcasm by the way) that you are not familiar with institutional buyers. There is no reason or rush to push the panic button. It is a summer friday here on Wall Street and no one plays for the whole day.
I am not expecting much of a run for several months. I would think the stock would start a climb up, but if I ran money, I want to see a quarter or two first.
If that call didn't relieve you of at least a little skeptisim than I have really no idea why you bought into the stock in the first place.
Do you really see much downside right now? Forget the technical crap, it means nothing here, this stock has never traded on technicals and it never will. Fundamentally, do you think that if the company does 20-25 million this year (cash flow positive) with a chance to do north of 40 million next year, and a float of 60mm, it is worth $2 a share?
Your broker is right. There were several analyst and brokers on that call, which was a good sign, but I can tell you that they will not run out and purchase large stake just because they can. They all have to do their own DD and there is no reason to press the 'panic buy' button. This is an easy stock to accumulate right now.
Personally, I was very encouraged by the call. It's is still a hold for me, I am not to the point I will add just yet, but nonetheless I see a real value here. It seems like they have done a good job consolidating operations as well as all the sale side stuff we have been hearing about. All good stuff.
I dont expect much in the near-term at all. I would like to see the price stabalize and climb to the 3.50-3.75 area where I think fair value is.
I initially entered into position as a 1-6 month trade about 10 months ago, I look it now as real, but still speculative, investment. I think that a double is likely within the year which I would be happy with. Downside 1.60 area, upside 3.75 area. Trading at 2.04, this is very good risk reward if you are long under 2.50. Again, I think most of the negative bias is probably going to wash away and I think this is decent specualtive buy but I personally, am not expecting anything major for the next few months. But dont read that the wrong way, I feel much better about this companies prospects and future. More so now than ever actually.
Sorry for the rant about my opinion but that is my take.
I think the interntional market will come with time and success. Like I said they dont appear to be direct sellers of any product or service, but they have the right partners to make a huge impact on the scale and scope of their buisness. That will come with the maturation process. They are still a young company with a lot to prove. It gives me great encourgement however that companies (including big and small goverment) with many years of experience and are many times bigger are doing business with TKO. That should give you some idea that there is staying power. The more I think about the more I am happy with that call. While not providing every bit of detail, I am appeased.
By the way, I only think you need to sign to get 15 posts, I dont think you need to pay anything.
The international exposure will come through channel partners. GE does around 40% of business oversees. I imagine EDS does a huge amount of business internationally as well.
Not much was made of it but that is an enormous opportunity. Think about how much infastructure is being developed in china, dubai, brazil, australia, etc. Those markets cant buy our goods and services fast enough. It is companies like GE, Caterpiller, US steel, etc that stand to profit from that global expansion. If TKO can provide their niche and do their job well, they will have a small hand in that global expansion as well through these partners that already exists.
I love the idea that they do business with companies that have such a global presence. I cant say that enough. Now, they only have to execute.
I basically liked what I heard. My intial reaction is pretty optimistic. Although I was a little surpirsed to hear he wasn't prepared for some of the questions thrown at him but I think he did a respectable job. Also, there were several invesmentment management firms on the call including RBC Dain, which is nice to hear as I was hoping this call would be aimed at insitutions.
Seems like they have a very broad and horizontal market that they have a foot in the door with. What is encouraging and impressive is the actual customers they are doing business with.
The GE situations seems very interesting and seems like it has a ton of potential, the one thing I would be slightly concerned with is the 200 mps chipset issue. He did state that the 14mps chip would still have resael value in that it still is useful but their system would not be able to handle the 200mps chip when rolled out. I dont know enough to know if that is really an issue or not and how it may be affecting current orders.
The fact that they are getting a COO is very good. I was actually very glad to hear they are getting a day to day guy. This company is way to small and has it hand in way to many things to not have an onsite leader around. Ron seems knowledgeable enough but a young company needs its captain on site.
Hmmm, what else. I didn't bother jotting down numbers, I frankly dont care if they do 15 or 25 million this year. Thats not really important long term. It seemed like 20 million is in the bag though, unless I am totally mistaken. More important is the capacity at which they can grow. He said margins are between 35-75%. He mentioned they could easily do 50 million next year. That would equate to about 75 cents a share which at 5 times next years sales yields 3.75 a share, which is very conservative. At 100 million, all things being equal, well never mind, first thing first, get to $25 million.
Last point, he said they have no intention to go to market to raise equity. That is good. He said if they needed they could bank finance some inventory. I like that idea much better!
Anyway, I thought it went will, we will see over next few days how the market thought.
taken from the site:
888 335 6674 pin# 8901282
Its trading, at least there are Market Makers with bids/offers posted. It just hasn't traded yet.
Why are you so conviced that selling MSHI is the right thing to do? How do you know they have not started already? What if MSHI turns into company worth holding? I dont know either but I know enough to know I dont understand the full story.
As for GE, I haven't a clue whats going on with that or some of the other partnerships they had in the works. I would guess the conference call is attempt to communicate their current and future strategy and prospects with the investing public so there is no point in wondering whats going on, we will know soon enough.
So in your view you dont think anything good will come out of the CC?
Is that bad?
Good post. I think that clarifies where you stand very well, not that you had to justify yours views, but nonetheless it shows your thoughts.
I agree with your perspective on challenging the company to deliver to a point. After all, that is your right as a share holder. But I also think some of your posts have not been directed at the right people. This board seems to want to share info and pass along little bits of info. No one here actually works for the company.
As to your valuation of TKO, I disagree. I mentioned on the other board how to try and value the PPS a little more accurately. You are not using a standard method of valuation and are focusing on the MSHI spin-off too much. Again, in this case, I would use a price/sales ratio and use an an appropriate multiple. The price I came up with was using only one assumption and a multiple that I think was relatively conservative.
MSHI means nothing other than a balance sheet item. With the volume MSHI is trading with, they could only sell 5-10k shares a day without completely shattering the stock price.
MLK, where do you see the stock headed in light of your assumptions?
There is no pressure on the stock, there has not been for a couple of weeks. The stock is down 4 cents on 32k shares traded. That is not "downward pressure" that is a whole lot of nothing. There has been no significant volume for the past couple of weeks. Likely because, there is no large buy or sell orders at the moment. Maybe potential investors and current shareholders are waiting for some type of direction from the company. Maybe something will come out of the CC, maybe it wont.
I agree, investors need a heads up as to what stage these larger contracts are at. But getting frazzled at a 3 cent move on no volume is futile.
I will say it again, you post comments (which are usually fair questions, although misdirected at this board instead of the company) and are looking for responses, but you fail to respond whenever anyone post a question to you.
My question to you, what is your reasoning behind owning the stock at this point? I have trimmed my holding significantly over the past couple of months down to about a 1/3 of what I had at one point. I do plan on adding when I see the stock moving in the right direction.
Nah, it was good call, I thought 2.10 was likely as well. There was some strength at the end of the day, someone took out a bunch of stock that was sitting at 2.05. In then end, volume was just too anemic. Not a bad thing, not what I expected, but not necissarily a bad thing.
Lets see if this call generates a little bit of a run-up a day or two before. I would love a reason to add more to my position, I have a third of what I had a two months ago and will only add on the way up at this point in time.
Agree with you on MSHI. There is no way they can unload the position at one time, they will crush the stock. Hopefully they can find a third-party investors to take it off their hands for some type of premium. If I am MSHI, I dont want a company like TKO (who has cash problems of their own) owning such a large position. Unless there is some type of vesting period which I have not read about, they can just sell the position on the open market to raise cash. Not good for MSHI. If I am MSHI and I think I have some goods or services that provide value and are potentially profitable, I take the company private again. There are too many variables the way they are currently situated.
In my opinion that view does not make a whole lot of sense. This is not a penny stock that enaging in a pump and dump. They have real contracts, real people, real products and real revenue. I seriously doubt they will look to the market to raise money in the near term. I might be wrong but I dont think you are taking all the factors at play here into account by making such a broad statement.
If the technology can create value for customers and can generate a profit, the company is viable.
OT - Yeah, there will be opportunities all over the place this summer.
One of my observation over this week in regards to TKO is has not sold off at all even with the all the sell pressure on the over all market. What that means to me is that the bigger holders of our little stock are comfortable with the position and dont feel the need to liquid a speculative position like this during this almost-a-correction.
Many times during market retracements you will see big sell prorgams hit the market when stops are taken out. We actually saw that today when the S&P broke 1500 to the down side (big support/resistance), sell programs hit and the the whole market broke down. I think the Dow slid about 70 points after that.
With earnings season over, it will be interesting to see what prompts buyers to step in. Based upon valuations, quality stocks were relatively cheap even last week, scaling in or adding right now is layup in my mind. However, I dont know what the market is going to take their cue from and I would be hestitant to be 100% in equities right now.
I have been wrong about the market for the last quater of last year and the first quarter of this year so I missed a lot of the run up. I am going to use this opportunity to build some positions in stocks I have been eyeing for a while. GS, NIHD and GOOG (all three trade at a high $$ so my little crappy portfolio will contain very shares!) are a few. Will probably look for an oil stock as well as who know what is going to happen in the middle east with that big storm over there, that could turn bad from what I read.
Anyway, sorry for the long post that doesn't pertain to TKO at all really. Just some market observations and thinking out loud. Any ideas, please post, I always like to see some ideas other than my own.
TKO is acting very strong, upticking as the market bleeds.
Big sell-off today, the fact that there is light volume and and TKO is only down a few cents is actually very strong. 60k shares traded is anemic. That is good, it means, at least for today, there is no real selling interest. Traders use days like today to hammer stocks down.
Ill just respond to some of your points, I am not using the same assumptions as you.
- It has been widely circulated that TKO will have $25 million in revenue this year. You are assuming $10 million, I think that is avery lowball number. My projections will show 25.
- The burn rate and costs are not factored into my valuation. I am not interested in how profitable they are right now. I am interested in growth.
- The fact that they spun off MSHI is almost irrelevent to me. Yes it is great that they basically sold off half of the current cash burn. And as far as I know MSHI added little revenue. All they are right now is an asset on the balance sheet.
So using a price/sales very simple valuation, comes out like this...70 mill float 25 million in revenue equates to .35 cents per share in sales. Using a conservative multiple of 5 yields 1.75 PPS. So that is the baseline I am looking at. Now you want to factor other misc things into the mix such as next years price/sales, current and future cash flow, debt, management effectiveness, pipeline opportunities, etc. I can see paying paying a 25% premium on this easily. That puts MY market value at about 2.25, thats what I would pay up to right now (assuming they do $25 million this year and at least that next year) Some would pay more, some think that this story is worth nothing (ThinkEquity).
Again, that is very simple way of valuing this stock. If you want to dig deeper and come up with a better valuation model, I think that is great. I personally think this stock is trading at a discount right now. If they really do 25 million this year, I can see a double at least from here. That number is only what I see being posted around these boards, I have no idea if they will get there. It would seem to me that with the current contracts and pipeline they have, insolvency would be very unlikely. Goverment agencies and Mega-cap companies dont typically get involved with companies who are not going to be around. All imo.
Nice day huh! Another 13 cents and you are flat right? Wish I could say the same but not that far away, I am averaged about 2.45
Great close. Almost brought a tear to my eye haha! Seriously, about 100mm shares taken at the offer price. That is a nice nice sign for our much maligned stock. Based upon the last 20 minutes almost looked like some speculative buying, maybe something nicer around the corner is coming!
Those are market sell orders and are entered right above the bid price. Limit orders are the ones you see 'away' from the inside bid/ask.
Its only short term pressure, as long as we keep getting news and things look better and better, the trend will be up. Just focus on the end game.
I am not missing your point, your point makes no sense to me. Your are mixing together facts and assumptions that have no bearing in valuing the company. MSHI is a seperate entity, their financial position no longer has anything to do with TKO other than TKO owning a stake in it. The cash drain that was MSHI is no longer on the books. The equity TKO has in it is an asset on the books, thats it.
If you want to come up with a value for TKO's share price, you need to determine what their sales are and how much of a multiple you would be willing to pay for that growth.
Its not a complicated story, take their sales, divide by the float, multiply by a factor that you are comfortable with. Could be 3, could be 10, depends on the industry.
Example, 25 million in sales, 70 million float. that equates to .35 cents per share in sales. If you are conservative give it a multiple of lets say 5, you get a share price of 1.78. By 10, you get 3.50.
This is simplified and it doesn't take into account future growth and management abilities, etc. but at least you get a starting point.
Your calculation is not the right method for determining the share price. You need to look at forward sales figures. I would look more at price to sales and assign a multiple of what you think fair market should be.
It is a growth company so you cant really look at the PE (which there is none). I would take a look at what you anticpate this years sales being, figure out from how much sales they do per share and multiply that by some kind of fair market multiple. That should give you a more accurate picture of where it might trade too.
You have posted this much and would sell out for a 30 cent move? I would feel much better about reading and understanding your posts if you were long from much higher, I would be able to empathize a lot more. But 30 cents? Just sell this thing, take the money, buy the next dip in any large cap and you will make it all back!
That was the first email your wrote where I both relate and agree with you.
TKO is $2 for a reason, none of which are good reasons just like penny stocks are penny stocks for a reason. Inexpensive stocks are usually trading inexpensively becuase there are fundamental problems with the company, TKO is no exception. I don't buy into any conspiracy theories either. The stock isn't making money and has not indicated with any assurance that it will. When they turn it on, the stock will go up.
I believe this board has people that are filled with good intentions and people that are interested in learning. The primary 'sources' of information that is shared are simply people relaying information back to the crowd. I really dont think there are any bad intentions here. This company has had a long series of misteps and has inadequately handled investor relations. They have noone else to blame for that but themselves. But you know, I really could care less. I don't need to be coddled or handled. All I want to do is to make money. I still think this company has something to show, so I stick with them. I could care less who runs it and what the dynamic of the management is. As long as they know what they are doing, and do it well (all debateable).
When I no longer believe, I will sell. I have made a little and lost a little here, I have much less invested now and am willing to ride the rest for a bit. I dont mind selling for a loss, it happens in trading. I have probably been more wrong then right but if you have the right risk/reward strategy and good discipline, it does not matter.
I don't have a stop entered, but will exit out of my position with a 30% loss (I am averaged down to about where you are, which I think is a nice price btw.) Typically much higher than I usually would be ok with, but the return is potentially much higher. Its all risk/reward to me.
The funny thing is, he is actually long the stock.
Man you are negative. There is as much interest in selling it as buying it.
There is going to be limited institutional interest in it as long as its below $5. That is just a fact. I would also venture to say that interested institutional interest is already onboard. Further accumulation wont come until they start to make some financial noise.
Enlightened us with some pearls of wisdom then MLK!
Peanuts!