By now we all had the opportunity to appreciate the pros and cons of our investment after the annual meeting. The company is free of debt, has money in the bank to carry it for some time, has reduced expenditures-particularly in personnel- has some prospective orders from some small airlines and a number of law suits pending as well as a large number of prospective ones. I hope I have not forgotten anything.
Yet, the PPS is struggling. The qustion is why? A number of thoughts have been expressed about it and here are mine. To begin with positive or even negative comments do not seem to matter, although I am want to point out we all get tired from repetitious ones on either side. The problem we have is that the market perceives the bulk of the revenues of the company as too risky to respond, at least for now, positively. Further, there is an issue about timing. The uncertainty in realizing revenues is exacerbated by the uncertainty of when they will be realized. This generates an uneven stream of revenues from quarter to quarter that the market does not appreciate as we have already seen. The PPS is usually tied to revenues from continuing operations and the revenues we have seen and will most likely see do not satisfy this criterion.
I do not know the long-run viability and prospects of our product. But the market most likely will respond positively if and when we expand the line to include more products which could be developed inside the company or through acquisitions. This will help the company to grow and also increase its revenue stream. Unfortunately we do not have enough cash as yet to effect the latter approach. It might very well be the case that this round of settlements will provide the company with the wherewithal to effect successfully this approach. But then all those who argued about dividents have to lower their expectations. A one and for all divident would have depleted the cash and would, in my judgment, do nothing for the PPS.
The forthcoming cash fro the prospective settlements might result in an appreciation of PPS but only to the extent that the co. has the opportunity to use it the way I argued for. The ball is at the door of the management and lets all hope they can do it and wish them luck. Good luck to all.
