lum, page-45

lum. what exactly is the perrill? Hi Romaiai,

Just in response to your last post I thought I would try and form some type of argument.

Lum, as is the case with dozens if not hundreds of other stocks is undoubtely speculative. It has two weaknesses that we all acknowledge, management and lack of cash reserves. However what is does have that many other speculative stocks dont have is a quality, proven product that we know works.

Stocks that end up going broke with administrators called in are companies with high amounts of debt, and the creditors get nervous and call on that debt. Lum have virtually no debt so the chances of it going broke in the foreseeable future are negligible in my opinion. However I agree they are going to have to seriously look at how they are going to fund future growth, and personally I would prefer them look at a debt like situation, rather than continue with capital raisings and further dilute the holdings at a ridiculous price of around 10 cents. Maybe if the shareprice was 50 cents a capital raising would be better.

Another problem with the the history of LUM that really doesnt get mentioned on here as much as it should is the peanuts they have gotten into bed with. A more sophisticated CEO would have avoided this. However while there are still some doubts surrounding the JV partner and client in Istanbul, I believe that 4TS is a significant turning point. Both Clear Channel and Disney are blue chip clients, the sort of clients Sala should have been chasing from the beginning instead of messing around with small fry on the verge of bankruptcy.

The pictures that can be seen on LUM's website from both 4TS and Istanbul are magnificient. I believe that if a couple of things just fall into place then there will have to be a significant rerating and escalation in the shareprice and that is why I am prepared to hold.

I have done a comparison of the market cap's of LUM and several other speculative technology stocks on ASX, and although some of them have more cash than LUM, many of them only have an idea that might work, and not a proven product that we know works as is the case with LUM.

LUM market cap approx $10 million.
SLX market cap approx $105 million.
MBP market cap approx $139 million.
EPT market cap approx $58 million.
VCR market cap approx $180 million.

Now I know that people are going to say that these other stocks are chasing much bigger markets than is the case with LUM but I am trying to illustrate that all of these stocks "might" have a product that works whereas LUM has a product. All of them have a book value only a fraction of the market cap. If LUM can manage to get a large network of signs out there then there is decent earnings to be made.

All that LUM need in my opinion is to come up with a viable funding arrangement, only deal with quality clients and joint venture partners, and look at replacing Sala with an experienced CEO. None of these things should be that difficult. If I was in a position of influence at LUM, I would be trying to get a funding arrangement with Clear Channel, especially as they seem so taken with the product.