Replies to post #1567 on Underground Solutions Inc. (fka UGSI)

[pipeliner3]

Shooter, thanks for your comments and insights.

I am one of those who has held UGSI for a while. You are correct that we private investors (not the Riverwoods of the world) have invested in this company on a song and a prayer. We have had no choice but to invest basically blindly, as financials are not available to us, whereas I am sure the companies books were gladly opened to Riverwood. So, Riverwood has quite an edge on us little guys.

Right or wrong, I viewed Riverwoods investment as a clue that they (Riverwood) saw something positive in UGSI or they would not have invested the amount they did. Granted, with Riverwood holding the preferred shares (and for the terms they acquired those shares) they have - all things being equal - a much stronger safety net than us common share holders. Additionally, we don't know other enticements UGSi management might have extended to Riverwood for that investment.

All that said, my investments in UGSI have been on my view of the potential value of their products and services (from a revenue-producing viewpoint). As others on this board appear to believe, and only time will tell if it is correct, the current management (or at least those we know or can find history on) appears to be quite capable of making this company a winner. While I agree with your comment that todays numbers must be compared against a baseline to mean anything, if one is to believe the quarterly reports, progress is nonetheless being made in project bookings. Whether those projects end up being successful, both in performance and in profits, is a different matter. I guess Riverwood knows the answers to that, but we must continue to read between the lines and glean what we can from what Andy feeds us.

I've invested too much in this company to bail now, but if I see any sign of stagnation in business activity (yes, how would I know that ?) I will not hesitate to put my money elsewhere. For those of us who invest in such startups, and I've invested in BDC's for a long time, as well as biotech startups, it can be a wild ride, and oftentimes painful. But that's the nature of the beast with such companies.

Anyway, I haven't said much of anything of value here, but do want to thank you for talking in more definitive terms about UGSI than what posters like me usually contribute - which isn't much (no offense intended to my fellow posters).

[fredugsi]

Straightshooter. Thanks also for the great info. You reiterate what I thought...we (shareholders) took a big hit when Riverwood came on board. That includes Wynnefield Capital and the management and employees of UGSI. My analysis shows that from owning 0% of the company, Riverwood now owns over 40% of the company. This is unbelievable that one company can come on board and destroy the equity of existing shareholders. With that said, these PE guys (2 on the board), have a great track record. But remember, most PE firms have a 5-7 year investment horizon. Is everyone on this board patient like them? They get paid for waiting--not us!!