TRID Testing Lows
TRID fell below $19, that is below it's recent low on Nov 9th.
What is going on? There seem to be 3 events of concern here
1. Options backlash:
The CEO and Chief Accounting Officer are out. The cost of the due diligence is $7M to date. There are lawsuits. Also, and more dire, there has been no earnings statement since March.
To keep things in perspective, their situation is mild compared to others. Even Apple and Whole Foods are under the same options cloud. I remain dismayed that they still can not get their finances cleared up - this is a relatively small company. Perhaps firing the Chief Accountant is a step towards finishing things.
2. MIPS lawsuit. This is noise. It was estimated by Jefferies that the exposure is less than $500K per year.
3. Concerns about future business.
An analyst said that there is a flat panel slowdown. That means sales will fall from a brisk 40% to a still brisk 35%. LCD makers see a 3.4% drop in volume production. Time to panic? Hardly. First of all, GLW still expects to grow 25% for the next year, and that is factoring in price cuts. (GLW makes the actual glass).
Second, the slowdown is from PCs not TVs. Standalone LCD monitor sales grew 16%. Laptop sales 25%. LCD TVs are pushing the growth to 40% this year and 25% next year.
BBY even reported strong TV sales amidst cut-throat competition with Circuit City, Costco, and Walmart.
In short, there is nothing but great news for TRID from the business side. For the last 12 months, sales are ~$210M vs $100M for the previous 12 months. Forward projections are for $350M in sales and $1.35 eps. That would be a 25% growth against company expectations of much higher growth.
All problems stem from the options overhang.
What is going on? There seem to be 3 events of concern here
1. Options backlash:
The CEO and Chief Accounting Officer are out. The cost of the due diligence is $7M to date. There are lawsuits. Also, and more dire, there has been no earnings statement since March.
To keep things in perspective, their situation is mild compared to others. Even Apple and Whole Foods are under the same options cloud. I remain dismayed that they still can not get their finances cleared up - this is a relatively small company. Perhaps firing the Chief Accountant is a step towards finishing things.
2. MIPS lawsuit. This is noise. It was estimated by Jefferies that the exposure is less than $500K per year.
3. Concerns about future business.
An analyst said that there is a flat panel slowdown. That means sales will fall from a brisk 40% to a still brisk 35%. LCD makers see a 3.4% drop in volume production. Time to panic? Hardly. First of all, GLW still expects to grow 25% for the next year, and that is factoring in price cuts. (GLW makes the actual glass).
Second, the slowdown is from PCs not TVs. Standalone LCD monitor sales grew 16%. Laptop sales 25%. LCD TVs are pushing the growth to 40% this year and 25% next year.
BBY even reported strong TV sales amidst cut-throat competition with Circuit City, Costco, and Walmart.
In short, there is nothing but great news for TRID from the business side. For the last 12 months, sales are ~$210M vs $100M for the previous 12 months. Forward projections are for $350M in sales and $1.35 eps. That would be a 25% growth against company expectations of much higher growth.
All problems stem from the options overhang.
posted by Andrew at
9:36 AM
1 Comments:
You are in love with this company. When the options scandal occurred you said no material expense and held on. When they expensed it, you said the matter has been cleared up and now it can rise.
You also thought the CEO was just greedy, not unethical. Well he was kicked out, so I dont think you were correct there.
I think you need to be concerned that maybe their numbers are also not so ethical and those numbers that are giving you $ eyes may be a mirage.
I think several resignations/firings means things are not at all right with this company. Dont lose your shirt.
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