Agree completely. Run the company the right way.
The product is very good. The price is too low for the content added and the part cost is too high probably because Saleen's credit history with the parts vendors has premium pricing attached due to the risk of the vendors getting stuck with the inventory. Also, higher volumes on the backlog should earn price reductions from the vendors but with no cash in the bank Saleen cannot negotiate for volume part cost reductions.
The toxic borrowing would have to stop completely, meaning that a deep pocket investor with a long term plan would have to be found. The problem is the CEO is not moving in this direction. He continues to spend far, far too much of his limited available cash ($2.4M per year or $200K per month, borrowed from his unknowing customer deposit accounts) on SG&A expenses (including legal fees) when he should spend every last cent on parts to build cars and increase revenue. I think this message has been out there and ignored for 18 months and now it's too late. Where the hell is the BOD's?
There are too many creditors who have waited too long to get paid and they are starting to go legal which will create a death spiral as the legal fees will pile up on top of all the other debt. Now Saleen is 6 months delinquent on rent ($288K)and facing eviction. How can you spend $200K per month on SG&A expenses and not pay the Rent? I mean come on. How about not paying his insurances?
putting all his employees at risk? Does it appear to any investors that the CEO knows what he is doing?
These comments are my opinion. Invest based on your own research and conclusions.
