You wanted my opinion as to the future of LUM. It is possible that a witch doctor may be able to give you a better answer but here is my opinion:
1. Technical: nothing beats Lumacom for quality and cost and that is a great asset to have.
2. Cash on 31 Dec: $4.4 mill and the cash loss in the previous quarter was $0.96 mill. So. that will give them about 11 months or so, quite a lot of time if the management is with it.
Also, the previous owner of that large obsolete sign on 4ts seems to have paid for 5 years or so ahead but he went bankrupt.
What I am suggesting is that possibly more than one year will be paid ahead for these signs and although it is shared after costs, if could be quite a tidy sum. That brings us to:
3. The accent therefore wil be on 4ts. There was originally one sign to argue about and the other 3 came later. Apart from erecting the antennae ( no work could be done before) there was initially the attitude that al 4 signs should be negotiated on at the same time. However:
"The internal approval process for a final commitment, however, is simply taking longer than expected. Given this frustrating delay, Lumacom has moved to accelerate the decision making process and offers are being considered for an initial “1 side” deal with conditional options for an all 4 side deal".
There may have been a difference of opinion with Totius in this respect but I agree that it may be the best course. It was also said somewhere that Durst was becoming impatient.
4. Communications in the field. Lumacom to have one person in the field to speed up matters. I thought they would have appointed someone earlier. Perhaps they didn't have somebody with the skills beforehand.
However, it is clear that the sum of all limelines can be as much as 8 months or longer. That is how long it can take to have the sign up, assuming the deal goes through.
5. Communications with shareholders. LUM should have come clean and referred to some problems before (Berlin). That caused quite a lot of damage till they were forced out in the open. I do believe that more urgency and constant updates would have reduced the loss of share price values.
I do believe that the next quarterly report may contain more realistic comments.
6. Resignation of Director. He was not a key Director and I do believe LUM can do without him.
7. Share price. Arthur and Alpha discussed TA. (Thanks guys). Alpha in his post 246188, referred to 32 cents initially. I think this to be realistic.
At this point the market tells LUM that the ball is in their court and that it is waiting for a positive response. Should it be soon, then the market can to some extent recover, although it will take time for LUM to regain the fullest confidence.
I don't dare to put a time limit on this except to say that LUM should be aware of this.
Should it take too long then the share price will sag further. Now the position of LUM has been exposed, I hope that the TS negotiations are not affected by this.
8. Summary: the Ace is the first sign on TS.
Gerry Readers, please do your own research and you decide if and when to buy, hold or sell any stocks.
LUM Price at posting:
0.0¢ Sentiment: None Disclosure: Held
