RE:RE:It's official Ned !Yesterday you asked me how I could justify suggesting $2 is doable.
I think it's very very doable and I'll tell you exactly why.
Yesterday I mentioned Pyrogenesis, and I'll bring it up again here for a very valid and pertinent reason.
It's called perspective.
Two days ago that company announced their year-end results, results that confirmed what I had repeatedly warned of on that board.
Their fundamentals have now deteriorated to the point where the company's viability is questionable.
Personally, I've been questioning the company's viability for a very long time.
Revenues have dropped over 30% yet again, having gone from $31 million to $19 million to $12 million in the last 3 years.
The company's working capital as of December 31st was negative $7 million, they had less than $2 million in cash left at year end, and their burn rate is over $1 million monthly.
You laughed at me yesterday for pointing to Pyrogenesis, saying I had picked the low-hanging fruit, saying the company was obviously garbage.
Your first point I'll dismiss because I recognized problems there when the company was still cap'd around $500 million, long before these problems became glaringly obvious.
Your second point was very true and I couldn't agree with you more.
I question whether that particular company will even exist long enough to announce Q1, and this is precisely my point.
DESPITE the facts that the company is borderline insolvent, the company has virtually no cash, revenues are dropping 30%+ yoy, and the CEO is being investigated by the AMF, the stock is trading at $0.41.
DESPITE all of those incredibly bad fundamentals, the company is cap'd at $75 million.
DESPITE a hemoraging balance sheet, and despite losing $9.8 million in the recent quarter and $28 million on the year, the stock is trading at a six times revenue multiple ( $75 million market cap divided by $12 million revenues for the uninitiated ).
Putting a 6 times revenue multiple on $200 million in revenues for Exro/Sea produces a price target comfortably above $2.00
Surely a company with growing revenues would trade at a higher multiple than a struggling company with revenues that are quite literally tanking.
Very comfortably above $2.00