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What news about Berman do you refer to?
At least I am absolutely convinced they are needed at this stage. There is hopefully a fair chance that they can stop the bleeding of the Kelly companies but the terms are a lot less favorable for the CDED shareholders than I previously imagined because the Kelly companies have little worth in my book.
chucker
What sort of news do you refer to? Mr Kelly is a business giant no longer. He now looks more like a pathetic third-rate novice as far as business is concerned. (My basis for this view is the filed information about the results of the wholesale drug business
Basically I think you are right in the sense that it may have led to delays in dealings with the SEC. But I don't think management at CDED has so cold feet that there is any question of reversing the merger at the present point of time. One possibility is that Mr Kerry may get fewer shares than assumed because CDED will hardly continue entering into unprofitable deals. This may possibly reduce revenues so that Mr Kelly will not get as many shares as the maximum that has been agreed on.
What explains the big losses?
This is just my guess. I assume a wholesale business can do business in a conservative and in a speculative way. The conservative way would be to only do deals when both price and quantity are agreed with both sellers and buyers so that one can be sure the deals will be profitable.
A speculative way of dealing would for the wholesaler be to buy a certain quantity of drugs at an agreed price before it has entered into contracts with buyers at the retail side. If the wholesaler evaluates the market wrongly it may have to sell the drugs for less than it has purchased them for. This is a risky way of doing business. Possibly this is why Mr Kelly has run up big losses in his wholesale business.
There has been a SEC filing which shows that the wholesale drug business of Mr Kelly has been doing terribly running at a big loss. This would seem to indicate that this business is pretty worthless. It is my impression however that those losses will not continue now that Mr Kelly is no longer at the helm. The question is what revenues can be generated now that only transanctions that are clearly profitable will presumably be entered into. This fresh news shows that the hope that Mr Kelly is a very profiscient industrial leader was unfounded. This is a sad recognition for me who had great faith in him on the basis on the information that has been available about his companies until recently.
It is also a point that has been made clear before that CDED will not assume the negative worth of the wholesale business. Mr Kelly will have to pay for those losses himself.
I have got the impression from my exchanges with Mr Berman that shareholders have some shareholders have caused a lot of trouble for the company. At this stage it is hardly in our interest to call the SEC. One of my mistakes is that I have thought that Mr Kelly was an accomplished businessman. The financial performance of his company suggests that the opposite is the case. It is natural that the dire state of the Kelly companies has only gradually been revealed to the CDED management and that they have been in a difficult position dealing with the unpalatable facts of the Kelly companies as they gradually came to light. It may be that the poor state of the Kelly companies has also caused the delay in relation to the SEC.
grand
My impression is in one way exactly the opposite as far as Mr Berman is concerned when it comes to finding an exit. I get the impression that he sees this has possibly his last opportunity to participate in a grand business endeavor in his life in view of his age. This does not suggest that he wants to exit even if he may be as disgusted with the shareholder base as others.
I fully agree with this post. I think Mr Kelly has not been fully aware of the dire financial performance of the company but I also guess he has not let on what he knew because that would not promote the merger which he so badly needed. Perhaps the terms would have been even better for us if the real financial position of the Kelly companies had been known from the outset? I do hope his connections can be of some value in the future. Right now I pin most of my hopes on Mr Berman as far as personalities are concerned. He is knowledgeable about finances and the business I think.
Mr Kelly may be a man of vision and possibly relistic visions. But the fact that he seems to have proved that he has been unable to lead his current companies in a sensible way creates a fear that his visions may not have sufficient contact with reality. I don't claim that this is the case but I would have found his visions more reassuring if he had proved that he cound create profitable companies in this sector too.
The numbers are pretty diastrous but I doubt they detract too much from the credibility of Mr Cox and Mr Berman. I think these two officers of CDED have been taken in by Mr Kelly. But those numbers seem to reflect very badly botn on Mr Kelly's honesty and his business acumen.
I think there were some numbers published several months ago - may be August or thereabouts.
I don't think that is true. I think I remember that some numbers have been published as to the revenues of the wholesale drugs business. Last year I think it was in the range $ 100 million.
I suppose it can mean different things. One possibility is that most of the shareholders give two hoots as the how the compeny is doing fundamentally since they are just out to make a quick buck. There seems to be evidence that this is the case. The company has found that most of the shareholders are shareholders for a short period of time. They are short-term speculators it appears.
My view that what you state will be the case. The problem is the way I see it that the Bulletin Board is dominated my mindless traders. If the company had been quoted on AMEX for instance fundementals would have been much more relevant to the pps.
A serious stock exchange?
I think it may be wishful thinking to assume that this company will be admitted to AMEX og NASDAQ any time soon. I think there is also some ethical screening. This company seems to have as its highest goal to keep the market in the dark. This is shown by its gagging the T/A so that the market will not know one of the most important facts about a company - its current sharecount. This is an exceptionally imortant number as far as this company is concerned since its sharecount has exploded both in the recent and more distant past. The misleading PR's are another factor.
The implication here seems to be that it may take a good deal of time for the buy-in to take place and that it will take place gradually. But if there is an explosing of volume a substantial short position would add to the rise in pps.
Would not some of them have raised their bids if they had wanted shares badly? The slow trading now suggests that there is no substantial short position after all the way I see it. We will see on Monday I suppose.
I think it reflects the fact that the bid is exactly 2 cents and the the fact that the price has retreated a lot from a percentgage point of view even if the volume of trading has been very low.
Audits
"I think that the 2003 audit will be out sometime during Q1 of 2005. What I doubt is that it will privide any insight into the fiscal doings of the overseas divisions".
If that turns out to be the case a 2004 audit will be almost worthless.
It is a point in this connection that the float was then much lower. Therefore the volume of trading may have to be that much higher to take the pps to the same level.
My guess is that at least two succeeding years are necessary to get the true numbers for the last of those two years. For instance if the company had a lot of goods at the end of 2003 whose value was greatly underrated it would be easier to make a nice profit during 2004 than if the opposite was the case.
Was that not my point? Because this is so we can expect CDED management to see to it that the merger goes through.
I think that without a merger the shares of CDED should be pretty worthless. This is a reason why the management of CDED should do what it takes to finalise the merger.
Your point seems to be that most groups have some vested interest in a company whether they are shareholders or not. That is o.k. with me because this is enough to justify my view that non-shareholders are welcome to post their views. This may be required to obtain a real exchange of views.
As I have stated in a previous post my experience is that usually those who own equity in a company are the least impartial because they tend to have a vested interest in the pps rising and they tend to frame their posts accordingly. In fact it as happened time and again on various boards that others think I am lying when I post negative implications at the same time as I state that I own stock in the company concerned. The implication is of course is that shareholders never post anything negative about their company.
I think the non-shareholders may be more worth listening to than the shareholders. Shareholders commonly use these boards to convince others that stock price will go up in the hope that they may profit from this. It easier for noen-shareholders to be objective and try to communicate their real views.
Moreover, it is the quality of the reflections in the post that is of interest to shareholders as well. You should never marry a stock. Some of the current non-shareholders may have been shareholders in the past and may have useful experience when it comes to the qualities of Mr Matin. Personally I have from time to time followed the RB board on this company for years. I have found it an intriguing investment opportunity but have so far made no investment because of the low credibility of Mr. Matin. Recently this comes out when he a few weeks ago referred to earnings of $ 3 a share, then was surprised that the pps was falling, then stated that earnings per share would be about $ 1 a share as the sharecount had tripled all of a sudden. This kind of deception ruins his credibility.
My impression is that that order was filled without moving the stock price. One million shares tradet at 1.9 cents.
Why would he be in financial miseries if his company has an extremely high profit margin, making $ 7 million in profits this year? If his company is not that profitable after all he is a liar, is he not?
Happy new year
I as well wish you and others a happy new year. I hope the 2.4 million shares I own in CDED will prove a good investment even if my average purchase price is more than 6 cents. Time will show if there is a substantial short position.
I see your point. In the case you describe it is not really the market-maker on his own behalf that is short but a broker's customer. It is easier to assume that there may be some short-sellers who are not market-makers that are not aware of what may happen to their short positions in a few days. But I would assume that even those people will be monitoring what is going on more or less. Those who have done so and act rationally will have covered their short positions by now. But of course it is not unthinkable that some possible shorters may be caught unawares. But even if that happens and they will have to cover in a couple of days I doubt that the stock price will soar sky high. There are tens of millions of shares owned by traders who will probably be happy to sell their shares below $ 0.03.
ot MSEP
I have checked several charts for the event you refer to. The increase for the end-of-day price seems to have been from about 0.003 to 0.006, whereas a high during the day seems to have been 0.009. About four times the average number seems to have traded. If the volume of CDED trading increases four times the stock price will not move much.
It may well be that the market-makers will not show their weakness if they can choose not to. But that is not the point. The point is that the market-makers have known for a long time what is coming and they have had ample opportunity to cover their possible short position at prices close to the current one. A rational person would do that rather than cover at a much higher price in the course of a few days at a later stage. Don't you think market-makers are rational?
Did the market-makers know what was coming when it comes to the company you refer to?
You should realize one Kelly company is already having revenues in excess of $ 100 million (the wholesale business) before the merger and growing fast. This business alone will probably not take that long to revenues of $ 250 million. But it is the retail business that has most potential - because it probably has margins that are way higher than the wholesale business.
Totally unrealistic?
I think it is so much wishful thinking that the market-makers or other shorters are so exceedingly stupid that they fail to cover any short position well in advance of the change of symbol. After all the things you refer to are well known - porbably by shorters as well if there are shorters in this stoc. So far there is no indication of covering of any short position. This suggests that there is noe sizeable short position in this stock.
As far as the audit is concerned, the crucial question is if the audit will be a real audit of the business in Bangladesh in contradistinction to previous audits. If that is not the case this time around either the audit will probably be pretty worthless.
If the sharecount increases a few percent during the year this gives a fair picture of the situation. The situation is very different if the sharecount increases by several hundred percent during the year.
If the sharecount is tripled at the very end of the year it is of course very misleading to refer to the average number of shares during the year. What is technically correct can be very misleading. In my book it is not acceptable to present very misleading information to shareholders and investors.
You did not note what matters! What matters is earnings per share of $ 3 and profits of $ 7 mllion. That implies about 2.3 million shares outstanding.
As far as earnings per share is concerned it is the O/S and not the float that matters.