Replies to post #128944 on Spongetech Delivery Systems, Inc. (fka SPNGQ)

[gr8lake]

Try comparing it to CMG. This is a growth company. Their growth has slowed considerably, and their P/E is 30+. Granted, if you apply a 30 P/E to the earning we know of from SPNG, that would only put them at a PPS of .30. SPNG deserves a higher P/E, based on much higher growth, and their earnings should be considerably higher by now. When CMG's revenue growth, and earnings growth were much higher, they were never anywhere near 900%, and 700% respectively.
If SPNG reduces O/S, earnings could conceivably reach .10 per share, in near future, their growth is probably higher now, and could command a speculative P/E at 40. That's $4.00. Move the numbers around any way you want, but what I am trying to say, is that $4.00 is not out of the question, in a very short time, if the company makes the right moves, and sells more product.
JMHO,
SpongeBath

[stoxmagic]

Penny,

Thank you.

And don't mind me, but a little dose of reality called for. And before we get into it?

Well, a curious little something I just happened across recently...

"that much you could believe.

What you can't believe is a company having a market cap of anywhere between $2B and $2.6B at $4 a share given an O/S of 500M to 722M respectively, with a net income last fiscal year of $10 and a projected bet income this fiscal year of no more than $50M.

It simply doesn't not work that way."

And, so, okay. A little dose of reality…

As far as the numbers are concerned, it's largely a matter of speculation at this point. The precise share structure an unknown. Audited fiscal '09 detail yet to come. The July numbers. The August numbers.

The matter of achieving the senior listing being as earlier talked about. About a plan. A $4.00 plan. About fundamentals-operations-squeeze play.

And again…

(Mr. Metter during the initial Q&A.)

1_

"Don’t you have to be at $4 minimum stock price to apply to NASDAQ?"

"Yes. We have a meeting Thursday with NASDAQ. As you know , NASDAQ has lost 700 companies this year, alone. We have 3 of the 4 qualifications. We have the asset base, we have the shareholder base, we have the profitability base."

2_

"Would you entertain a 1:100 reverse split to get listed?"

"Well, we’ll deal with it when…Right now we’re going to go there on the basis of what the stock is going to grow to. The time has come for us to move off the Bulletin Board."

[ Right now we’re going to go there on the basis of what the stock is going to grow to. ]

We've, many of us, crunched the numbers. Considered the effect of applicable multiples. So on. None of it being rocket science. And, again, not what we're talking about. Ridiculous value/valuation numbers in the purest of terms.

What we ARE talking about is achieving the senior listing in the absence of a consolidation of the Outstanding count. Via, that is, the leveraging of criminal behaviors. With, certainly, a higher launch point being required. Significantly higher than the $0.12 area. And we've already seen $0.2851. And the buy-side strength was still there at the time. The rest of the story we're all nauseatingly familiar with.

The objective being to reduce the Outstanding count to that level that clearly exposes the phantom shares position. Clearly demonstrating the reality to both the DTCC and the SEC. Without whose cooperation the plan, in the overall, cannot succeed. Reducing the Outstanding count to the 200m area as best we know as of this writing.

And a launch point, at the very least, in the $0.50 to $0.70 range. And, very possibly, in advance of a $1.00 by late August.

And again...

(Mr. Moskowitz, during the NFE Conference presentation, regarding the buyback.)

"That was one of the things that really helped our stock price going up in the last month. By doing the buyback."

(And regarding market cap. circumstance.)

(Paraphrasing.)

'$69 million market cap. … about a month ago we were only about a $10 million market cap.'

Making a distinct point about the earlier run-up to $0.2851.

And again…

'Michael Metter, CEO of SpongeTech(R) comments, 'The management team feels that these mechanical steps to reduce the outstanding number of shares will be a positive step in changing the current trading pattern of our stock.'

'COO, Steven Moskowitz adds, 'The management is committed and prepared to support any and all permissible actions to maintain the fundamental value of our common stock.'

It being not about numbers in the purest of terms. It being about a plan. A plan to seriously advance market level in line with company true value circumstance. In line with a seriously tightening Outstanding count. And to then expose/squeeze. All the way to $4.00 at the very least. All the way to a senior listing.

And think the phantom shares bit of business wasn't discussed at the recent NASDAQ meeting?

And think again.

And earlier we said/asked…

"And whether management turns to M&A as the means of achieving the senior listing, we can't say. But does relying on the MOASS, in concert with operational and fundamental realities, as the means of achieving the needed initial listing pps represent a truly sound approach?"

None of us able to say whether the plan will succeed as desired. But even if, from the stated higher launch point range, we achieve the $2.00 level?

Well, who among us would be b#tching about a minimalist consolidation thereafter?

And, so, there you have it.

A little dose of reality.

Time to load up.

Because management is on a mission.

And again...

"Management having not sacrificed as they have, having not toiled as diligently as they have, for as long as they have, to see any outcome other than a long-term successful company. The bringing of value to all involved. Themselves, very much, inclusive."

Rocket science it ain't.

Buy and hold.

And thanks for writing.