lum news article, page-29

re: lum The problem with LUM is its management. Perhaps not all the major shareholders in LUM (ie those with 500K+) are dissatisfied with its management but there must be quite significant number of shareholders who are irrespective whether they are posters on H/C or any other share chat room. Then the question is why would they be unhappy? It has been shown that the product is viable and worthy of investment. After a long time 4TS is up and running, there are two signs in Instanbul running, a sign in Moscow (owned by Pepsi) and another in Barcelona. Sufficient signs have been installed to show its potential to the advertising world. So why the unease? It simply comes down to that fact the market does not place a lot of trust in LUM and by extension in its management.

Lets look at some facts.

1. Barcelona. There is no revenue coming from this ostensibly half owned sign ands nor will there be. You could put this fiasco down to an error and not one of LUM’s making. It was the first major contract and things sometimes may not go plan. The other joint venturer I would say pulled as few swift legal manoeuvres and this has left LUM out in the cold.

2. Moscow. Reading between the lines it would seem that LUM managed to put one of the world’s biggest advertisers offside. Pepsi is happy with the sign but why haven’t they commissioned more signs from LUM if the sign does all Pepsi wants. Pepsi are not short of a dollar. If they had more confidence in LUM I am sure there would have been some announcements as more signs being commissioned. The management response would be how do you know Pepsi is peeved off and there no ongoing discussions with Pepsi? My response is I don’t but to me the lack of action by Pepsi speaks loudly

3. Instanbul . Two signs have been constructed and installed. The question here is based around revenue. All that has been received is a $50k payment. We had long been led to believe all was well and that the balance of moneys would be paid over. How disappointing it was to read in the quarterly report that there a few planning problems associated transferring permits. This had been known by management for some time. It trumpeted the installations but kept this fact quiet. How long does it take to transfer a permit???? A week, two weeks, a month, two months six months? I don’t think that Turkey is that all backwards and corrupt. The next question is what happens if this all goes pear shaped? No revenues lots of outgoings by LUM. Another Barcelona in the making where the ownership of the signs ends up with the joint venturer and no revenues????

4. New York. What can one say. One story after another indicating that the sign will be constructed and numerous stories as to hinted advertisers. Alright that is the past. Despite how long it took and the delays involved the sign is constructed, installed and operating. Disney has signed an option agreement with respect to that sign. It has until 13th of this month ( I think) to take up that option and sign a contract with LUM. Well recent announcements don’t seem to provide lot of encouragement that it will. If Disney doesn’t sign what are the contingency plans?? Sadly given the past events who knows?


5. The recent share placement . This was done with all the finesse of a 10 tonne slab dropping on you. On a favourable interpretation it was needed to raise money. However a less favourable interpretation would indicate that this was a desperate attempt to help out a selected few sophisticated shareholders of LUM. One of the selected sophisticated shareholders of LUM was its previous CFO. I cant recall how many shares she owned (please tell me I do know) but somehow her family was suitably rewarded. I believe that these shares and options are no longer held by that interest. Was this share issue legal? Yes. Was it morally correct. I will leave that to you to answer. One should also remember it was on that previous CFO’s watch the del Piano scandal occurred. The management despite receiving regular shareholding reports failed to notice the Del Piano sell off until it became to hard to notice. Yes it could not force Del Piano to report to the market that he was offloading his shareholding but it could have informed the market if it wanted to.


So ou ask why shareholders are peeved. It’s quite simple. The management!!!. It has been less than totally honest to its shareholders, its announcements have been “misleading” and from time to time its MD and CFO’s have not been upfront. It doesn’t return calls/emails unless you really push the issue and even then it is grudgingly done.

For the record I do hold shares in LUM. Once a upon a time I was in the top 20 shareholders. Do I have faith in the management. Not one bit. After all it has taken Sala some 5 months to “resign” from the CEO position. But I guess his actual resignation will take as long if not longer than it took to get 4TS off the ground.

Your comments are invited