Its not about risk - its about actually how smart is MSEP in structuring corporate turn arounds? How good is he? I and others all around have been praising his prowness - now two things happens that make me question a few things:
One: What about the debt - will it increase or decrease outstanding shares? How is the $10,000 a month payment being handled, more debt, is it part of a buyout or a restructuring (or better yet) a payment that send more common shares to preferred - effectively reducing the weighted common shares outstanding.
Two: We had a NT filing, no matter why it happened it did, and David said it would not happen - then a 10K comes out without proper explanation and leaves everyone with lots of questions. I mean David did tell several of us that there would little or no debt going forward. I can repost all of this stuff. The credibility has been tarnished a little, remember, he is only 35 - he is learnign and he seems to be doing things right. He just needs to answer our questions better.
I was thinking that there would have been a lot more finality with the 10K - then a press release with forward guidance explaning what happened and where we are going and how they intentionally incurred expenses and got everything booked in 2004 to go forward.
You don't mention a $10,000 a month payment without saying what it is going towards. Hopefully it is a payment plan on some strategy/buyout of former shareholders where their stock is returned to Treasury or converted into a smaller amount of preferred.
I also can't believe after so many comments about 188,000,000 shares outstanding - that there is now what 60,000,000 or so - how is this tied in with everything - where did the 188,000,000 nmber come from - the company right? Where is the explanation of the preferred stock and why it was done? This scares me because of RRRR and Apollo Capital Management - I need some reassurance.
David let us down in not properly educating us about the 10K and for not taking responsibility for the NT filing mishap. The stock will suffer until he tells us the answers to these questions. Up until this point he and MSEP were riding on this white horse, telling shareholders all the right things and creating press releases that were full of confidence - this isn't the case - this time. This is supposed to be the 1 in a 1000 penny stocks - well it is not turning out to be that now - until we get proper questions answered - the compnay credibility is shot. Why hasn't anyone said anything about the preferred stock, it is pretty major to us - we could end up getting screwed by a vote where we have no control.
I guarantee you if proper explantion of the 10K and forward guidance came out prior to the Andretti release - this baby would have smoked up so high it would make your head spin. Being a crafty veteran to this game - the first thing I think of is what is he trying to hide with the Andretti release? I wanted a full explanation of the 10K - the debt, the 10,000 a month how many oustanding shares I effectively reduced by the restructuring of TNTI into MSEP.
If I were the CEO I would have answered these questions and my first headline of the press release would have been something like:
MSEP increases shareholder equity, reduces debt and reduces shares outstanding by 25% (whatever the number) in completing the restructing of TNTI in 2004 -
Then I would hammer home how the $10,000 payment is part of this - or part of something positive about the restructuring, and nail the debt issue. You cannot position yourself as the restructuring expert and say you are going to rid the company of debt and keep away from dilution - and then come out with a 10K that has $800,000 of debt and you have to read going concern disclosures that are required byt he SEC in these scenarios.
Bottom line if the company can't give us answers to these questions - and they dillute of in the future - it is messed up. DAVID HAS TO GIVE US SOMETHING THAT LETS US KNOW THAT HE IS ON OUR SIDE - for example what does receiving funding from friendly or close parties for future operations mean? If the company were smart they would come out and say that even thought they may have to dilute the company in the future - steps have been taken to reduce shares outstanding upon the restructuring and that lines of business have been put into place and debt has been reduced (FOR ONE REASON ONLY) so that in the future when it comes time to raise the $1,000,000, David can say hey, "the stock is now trading at .50 or $1.00 and even though we have to raise money and dilute the stock this year - we did the $1,000,000 private placement offering only after we correctly restructured the stock and got the stock price higher, so that the company could do as much as possible to keep the number of outstanding shares as low as possible. David has got be our knight in shining armour now - he can dilute the company later on this year and nobody will care if he did such a great job in the reorg. We as shareholders would all agree that we would give up some future dilution to get an overall reduction in outstanding shares. Its a total psychology of mind thing here - maybe there is something this weekend that is being done to explain these unanswered questions.
If I were CEO, and look at my pasts posts, I was thinking along these same lines, I would have answered these questions correctly and then hit them with Andretti - I would have this stock price going way through the roof because I would have really pointed out the benefits of what was done. When the benefits are not clearly pointed out - investors like me begin to wonder if there really are benefits or is this just a smoke screen? I would not ever let this happen and if a clear concise explanation is not made soon - the stock will go down fast, because if there are only 60,000,000 or so shares in the float, man that is why this things is so f'n volatile. I would have really made everyone notice that this is a 60,000,000 share outstanding penny stock, with zero debt. And I would have made it 70,000,000 or 80,000,000 to get the debt down to a more manageable level. I mean hell shareholders were happy knowing that there were 188,000,000 shares outstanding.
There is also the issue of the losses that were generated as a result of the reorganization - in the restructuing and reorganizations I have seen, there are difficulties in many cases of using the losses when it comes to a different business - the company needs to address issues like this, to let us know that they are different. We arose from the muck, a messed up, bankrupt company we have a 35 year old general at the helm - these types of questions needs to be answered to further clarify and to continue to prove to the public that David is in charge and knows what he is doing. The NT and unanswered questions are just not good things considering all that has occured and been promised to shareholders.
And forward guidance - haven't you noticed that there aren't a lot of sold items on driversdigs.com? Explanation - this is why the stock is selling off.
If I worked for the company I would have answered these questions in a PR and you would have been very pleased.
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