Howdy all. Wish I could say its been a good morning but I am not so sure.
To note; I have emailed Scott with my concerns.
Ok I have read through this a number of times now and am struggling to see how this is in the best interest of US the share holder.
The things I am having problems with. 1. Basically we are giving our tech away only to by a stake in the company that is formed from it. All be it we will get a 10% return on our investment (according to the document) 2. William says that without the commitment of capital the path to market would be "inherently delayed". What happened to the JV deal. I was under the impression we had 300mil at our disposal? Also did Simon not offer a fair wad of cash to cover operating capital whilst Indian accounts were being chased. 3. Why does splitting the company out provide any additional resources?
They mention that they will absorb about 10mil in debt. This equates to about 50% of Arasors debt not including the convertible note.
Ok now that I have the questionable points out some of the more positive points.
There may have been some sort of call by a potential user of the tech to sure up the ship and focus fully on the laser tv business to ensure continuity of supply? I know that has been bandied around a bit.
I bought this stock on the basis of the wireless and the growth story there so I was dissapointed when it looked like they were dropping the ball on that front. Maybe this means that it will still be a significant focus for arasor. Personally I believed that there was greater potential for profit from the wireless side of the business initially, with the laser being the cream and eventually becoming the main focus.
I think if you check back Pattersons (yes I know what you are thinking) valued the business at 5+ without input by the Laser Tv tech. I think there numbers werent bad I think the company didnt fufill their plan to the best of their ability and maybe Pats didnt factor in enough risk?
I think its very interesting that they have given the new company a non exclusive license. It leaves the door open to license the tech out to television manufacturers themselves maybe? Also it would be interesting to see the terms of the agreement as I would assume that ARR would receive license fees on a per unit basis no? Potentially then ARR could license the tech to a number of users and have no manufacturing cost, however an income stream. It also leaves the door open for the ARR JV to use the tech.
It does show that William is prepared to push the business forward with a plan. I just hope he has more business sense than Simon.
I will post as soon as I get an email from Scott.
Bottom line is the announcement has come out of left field and on first view seems to be a bit of a kick in the nuts. Its just too tough to say whether its a good or bad decision? None of us know enough to see the real impetus behind it? Maybe Necsel Inc will secure some huge orders and get bought out by one of the big tv manufacturers making ARR a pretty penny? Maybe that has been the motive for the split, to make it a more saleable asset?
The above are my views and shouldnt be considered anything but. I think this investment proves that I clearly dont know what I am doing.
