Thinking, thinking, thinking!
Hello everyone!
In addition to sending this in ChairMail to all subscribers, I have decided to post this here and on Raging Bull as well.
Much has been said of late about WLGS and all that has happened in the past to all of us as investors.
Currently, the 'doom and gloom' spoken about the company ranges from poor execution, to bad market, to toxic bonds, etc.
One can easily daily read these conversations on the Raging Bull and easily speculate that there is absolutely, positively, unequivocably, undeniably, irrefutably any chance that WLGS can possibly succeed as a successful venture.
Granted that the company, through necessity had to derive funding from 'less than desirable sources', it is more important at this juncture to delve into what the future might bring as it relates to WLGS profitability and therefore share price appreciation. Discounting all that is potential to the downward spiral in share price due to the nature of financing activities of the company, I'd like to take an opportunity to talk about the upcoming earnings report for 2Q2001.
Firstly, the $1,800,000 loss that is widely discussed and referenced elsewhere as a $550,000 to $600,000 Monthly 'Burn' is true....at least, WAS TRUE for 1Q2001. That $1,800,000 was used by WLGS to continue expansion of the company in Spectrum Purchases and the buildout of Lima, Peru. A close look at direct revenues versus cost of those revenues shows that WLGS is making a 30% Gross Margin on Revenues that are directly related to the daily operation of providing services to customers in Argentina and the then newly started Peru.
The reduction in Shareholders' Equity is in direct relation to the further Spectrum Purchases and Equipment Buildout needed to garnish future revenues and profits.
Looking at what has transpired in 2Q2001, several important factors should be considered when analyzing the upcoming earnings report.
1. There were no 'new' expenditures for buildout in this quarter, Argentina and Peru expenditures are, at least apparently all booked last quarter.
2. There appears that there will be no expenditures for buildout in either India, Thailand, of the Phillipines for the quarter, since these hinge upon the Grenville Funding that was just approved on March 1st by the Shareholders.
What that leaves us to speculate is (although not what we anticipated in terms of growth) a healthier Earnings Statement from WLGS Headquarters.
With no known new Spectrum Acquisition for the quarter (other than possibly in the Phillipines), the Earnings Statement should be more of a direct relationship between current quarterly revenue activity through services minus the cost of providing those services. All in all, I believe that we should see an earnings report far better than last quarters on a 'bottom line' basis.
We should soon know if the SEC has approved the financing plan through Grenville, but it is unlikely at this point to have any effect on this quarters' Earnings Report.
Having read much lately on the boards about how we can best proceed as investors, past investors, or potential future investors, I just wanted to take the time here to post my thoughts on the very RAW DATA of the Company, irrespective of any personal opinions on the part of myself, fellow investors, or fellow 'commentators from the sidelines' about WLGS.
I hope that everyone reads this as I typed it, from a purely Neutral Bias Standpoint.
