Hi Tim,
I am aware you are not into RADA, neither am i,
(nor intending to). A worthwhile read, nevertheless.
Rada's reverse maneuver
I have been wondering what it was that made Rada Electronic Industries Ltd. (Nasdaq: RADID) carry out a reverse split, merging every three shares into one. If it was a wish to stay on Nasdaq, then the company shouldn't have paid the consultant that gave it this idiotic suggestion. A reverse split will only succeed if it is followed by some form of interesting economic program. Otherwise, what usually happens is that after a while, the stock goes back to its price before the split, and often much lower.
At the beginning of the month Rada chairman and former Israel Air Force commander Maj. Gen. (Res) Herzle Bodinger gave an interview to the online investor news magazine Wall Street Net in which he was asked about the company, its future, and its advantages, and all the other questions that interviewers in New York usually ask managers of public companies. I listened closely to Bodinger's answers. From what I understood, he claims that Rada's solutions in the line of business that the company engages in, i.e. avionics, testing and debriefing systems are more effective than those of other companies. "How's your management," asked the interviewer, to which Bodinger replied that he himself has extensive experience of aerial combat and avionic systems management, and that he has an excellent management team working alongside him.
"What are the company's milestones for the future," the interviewer then asked. Bodinger said that after several years of investment both in equipment and strategic planning, Rada would take off in 2007. Having followed this company for 20 years, I have no doubts as to its excellent capabilities, but it also had these back in the 1990s. Why has this company, with all its potential, failed to move forward? I haven't a clue. Either way, judging by the figures, it has made fairly good progress since the turn of the century. It moved from sales of $3.8 million and a loss of more than $6 million in 2000, to $13 million sales and a loss of $2.3 million for 2005.
What about 2006? We're almost towards the end of the first quarter of 2007, yet I haven't found anything at all on Rada's performance last year on its own website or on any of the leading financial news sites. In his interview to Wall Street Net, Bodinger recommended that investors visit the company's website. Strange. He shouldn't be surprised at all if after visiting its site, visitors don't invest a single cent in Rada. Even Yahoo! has more financial information than the company site has.
Published by Globes [online], Israel business news - www.globes.co.il - on March 6, 2007
