Sirius,
A tidbit of the report Thinkequity. Walrus has stated who the author is along with another chap.
This is quite scathing on TKO, but the figures appear wrong to me, so here`s a snippet for you, which I presume is ok as the report has been bought and paid for. It does appear to be scare tactics. The report is much, much lengthier:-
GLL
We expect TKO to burn near $25M in 2007 on an optimistic $11M in revenue. In reviewing the company’s prospects, it is
almost impossible to believe it has a long-term future. We assign a 12-month price target of $0.50. This pricing is
indicative of our lack of confidence in Telkonet's ability to foreseeably generate a profit and our confidence that it will
continue to consume copious amounts of capital. Our price target reflects a generous 3x P/S for a severely cashconsumptive
company.
We estimate Telkonet will need $15M of cash almost immediately, using EBITDA as a guide. The options to raise this
cash include spinning off a business. In our opinion, the most likely scenario would be to sell the unprofitable and standalone
MST business. A sale of MST could provide a portion of the cash necessary to sustain Telkonet's operations for a
little longer, but leaves us wondering where future cash will be found.
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