Cav,Looking at this company's financials should give you a...

Cav,

Looking at this company's financials should give you a picture of the past pretty quickly. It has just finished FY09 and will likely report another year like FY08. Dwindling sales and an $8M+ loss with just a few million left in the kitty.

It is very likely that they will have to raise another $2M from the market in the next few months just to pay OpEx. Some here have estimated that given the last rights issue was at .01c than the next round will need to be at about .0005c

A recent shareholder at 25% is Custodial who have installed their own CEO at Freshtel. Since this rights issue a few months back there has not been a single announcement from Freshtel relating to company plans, etc. Total disrespect to the FRE shareholders, Custodial is clearly not a friendly shareholder.

So, at the moment, apart from the facts known, no one knows anything but on the face of it things look like they will get worse before they get better and it is possible that in a few months time there will be 800M shares on issue and a SP of around .0005c.

As for the product, yes, it appears to work but the ground floor opportunity window for VOIP is coming to an end with many more companies offering similar performance & priced products.

Also consider this, ENG is the largest VOIP co in Australia with a $20M revenue and a 52% margin but even they have been losing $12M PA and have never shown a profit in 9 years of trading. Freshtel, like Engin, also run their own backend and have a revenue of only about $4M and lose about $8M PA. Running your own backend is a very expensive exercise particulalry more so if you have too few clients.

FRE will need to add about 70,000 new paying VOIP clients in the next year to just about break even. Both MNF & ENG have about 70,000 customers and it has taken MNF 3 years & ENG 9 years to build these client bases. I can't see Frestel doing this in the next 12 months.

The smartest investment in VOIP right now IMHO is clearly MNF. The only ever VOIP co in Australia to show a profit. They buy their backend wholesale from Symbio (private co owned by MNF directors) and only pay for what they use. They have 70,000+ clients and a likely FY09 revenue of around $11M with 100% PA growth rates for the last 3 years of operation. Very hard to buy decent chunks of this stock though as it is tightly held and due to not having to rely on numerous cap raises there are only 52M shares on offer. A very efficient company. Buy all you can at 9-13c as they are definately on the way back up.

If you read the posts here you will note that I am totally MNF biased and hold shares in MNF. However, if you consider the facts alone and forget the blue sky potential of the others you can only come to the same conclusion that I have about MNF. It is a screaming buy.......if you can get any.