Ann: Trading and Sales Update, page-93

First, with regards to the order for early January; in retail when you receive an order and invoice it, that is a sale. That is not misleading in any way and they have said that sale will be booked next period as it should. This is a trading update and there was no reason to withhold that order from the announcement. You try and put a negative spin on it but there is nothing wrong with what they reported.

I agree JB know how to do retail but in this instance they stuffed up, not MGM. MGM played it safe and bought more than enough stock to make sure they wouldn’t be embarrassed by not being able to supply the retailers if they sold more than expected. They also know they will need stock for Europe and they had the resources to buy early and they did so. In the end it is JB that should be embarrassed about running out of stock at Christmas when MGM had stock ready to ship. Massive mistake by JB. I can’t believe you are trying to blame that on MGM. You will gain no credibility spinning arguments like that.

Your main argument against this stock is that Gleneagle is pumping it. This thread is meant to be about MGM not Gleneagle.

This company has a very talented and highly experienced team that has done a fantastic job to date without any flaws in developing and bringing this product to market and expanding its retail footprint rapidly and is now on the brink of European expansion within 18 months of first release. You have little argument against the company so you bring Gleneagle into it and try and blame MGM for JB’s mistake regarding JB running out of stock.

I ask you this;
Can you fault the product, management, the rapid growth in sales, the rapid signing up of leading retailers here and in NZ or the rollout to date?
You have previously faulted the product for being 3G but you need to remember that when this was being developed 3G was the only practical option. They are developing new products for this year and you can expect 4G will likely be brought to market well before 3G ends. Technology is always evolving and as long as you have the talent and funding to keep up, you will grow. Apple built one of the biggest companies in the world despite model after model becoming obsolete. That is not a problem if managed correctly and this team have more than proven their credentials and ability by developing a world leading product. The fact that the first watch brought to market is 3G is not a fault. The fault would be if they were not continuing to develop new products and they are doing just that.

When the European expansion begins, $5 will be no barrier to much higher prices.
You tell is that you warned us to sell for months. What was the price when you first told us to sell?
This stock has had big corrections since the watch was first released but has always gone to new highs. Saying I told you so during a correction means nothing. Europe will give us a much higher high once again. The population there dwarfs ours and so will the sales there. The weak AUD relative to the Euro will be a bonus for sales into Europe.