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Wednesday, January 12, 2011 6:40:46 PM
BSPM - Well, it's interesting that it's a company that has, on SEC paper at least, improved it's cash generating metrics. Last year they were muttering about a dilution but as the valuation tanked they didn't do a stupidly low raise (at least so far 
) instead they did a more sane thing of changing the terms offered to the distributors - you can see that the cash on the balance sheet has gone from $8.6M Q1 to $16.5M Q3 - which I work out as changing from $0.32 to $0.60 a share on a $2 and change stock in 3/4 of a year.
The story goes that changing the terms caused the distributors to delay their buying. In the CC they suggested that the ordering was now strong and recent PR'd numbers suggests that they could hit the low end of guidance 63 cents for the year.
The theory, I've read at least, is that while cash can be faked it's more difficult so this cash flow is a positive development and an adaption to the China fear (any views to the contrary are welcome).
Another interesting move was that mid September the CFO thought, understandably, that top4 was a waste of money (and he's worked for Earnst and Young so he should know) [1], and they already used Mazers, but come the Nov CC they wanted a TOP4. So, something has changed his mind in a month or 2.
He was also talking about disclosing the SAIC filing but I haven't seen that. That sort of idea is quite leading edge in the China space.
Anyway, clearly this guy's knows accounting and is at the sharp end of the P/E decline and adapting the business to this contraction. I would have thought he would have been interesting guy to talk to.
rich
[1] http://www.otcjournal.com/Fund-Managers-Say-No-M-s-to-China-Stocks/af/archive/20100919-1/
) instead they did a more sane thing of changing the terms offered to the distributors - you can see that the cash on the balance sheet has gone from $8.6M Q1 to $16.5M Q3 - which I work out as changing from $0.32 to $0.60 a share on a $2 and change stock in 3/4 of a year. The story goes that changing the terms caused the distributors to delay their buying. In the CC they suggested that the ordering was now strong and recent PR'd numbers suggests that they could hit the low end of guidance 63 cents for the year.
The theory, I've read at least, is that while cash can be faked it's more difficult so this cash flow is a positive development and an adaption to the China fear (any views to the contrary are welcome).
Another interesting move was that mid September the CFO thought, understandably, that top4 was a waste of money (and he's worked for Earnst and Young so he should know) [1], and they already used Mazers, but come the Nov CC they wanted a TOP4. So, something has changed his mind in a month or 2.
He was also talking about disclosing the SAIC filing but I haven't seen that. That sort of idea is quite leading edge in the China space.
Anyway, clearly this guy's knows accounting and is at the sharp end of the P/E decline and adapting the business to this contraction. I would have thought he would have been interesting guy to talk to.
rich
[1] http://www.otcjournal.com/Fund-Managers-Say-No-M-s-to-China-Stocks/af/archive/20100919-1/
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