LOK looksmart limited

directors buying in us , page-5

  1. 1,041 Posts.
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    Hi Fallguy

    The next quarters results could be much higher than we realise yet..

    The imminent maiden profit should be boosted by the removal off the balance sheet of the US$39 mill in BT Venture debt...in return for the US$1.5 cash, the issue of approx $2.4mill in Stock (1mill shares) and the forfeiting of the $1.5mill restricted cash held.

    That’s say US$6.4mill in assets in return for the $39mill in BT Venture debt, an abnormal gain of US$32.6mill that must come into the accounts somewhere, though the US$2.4 in stock will not come into it as a asset but more as a 1% dilution of LOOK stock. There will be a provision for the restructure but feel will not be more than a few US$mill.

    Add to this the compounding debt interest of a couple US$mill Looksmart was booking each quarter that will not be booked as an expense moving forward. This BT Venture resolution will give them a big 4th quarter result and also big US financial year result.

    Finally, the analysts will be able to look back to 2002 and see a profit...as time goes on that is all they will see in numbers and the details of how it came about will fade. As long as Looksmart's growth path continues, the final 2003 figures should compare favourably in a years time to 2002 and Looksmart will no longer be snubbed as a $ gobbling tech stock.

    I am long LOK at an ave entry of 7.3c bought in 4 parcels over the last couple of years, I have had a chance on a few occasions to get out very nicely but in the back of my mind I always knew the BT Venture debt was never going to be repaid in cash and now the new business model seems to have worked I am very confident going forward today's prices are going to seem ridiculously cheap.

    The present consolidation at 20-25c is very healthy, the daytraders have moved on and institution buying is building.

    A good site to track the Instos in US is http://iw.thomsonfn.com/iwatch/cgi-bin/iw_ticker?t=LOOK&range=0&mgp=0&hdate=&x=14&y=11
 
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