takeover offer at 70c..tell em their dreaming!, page-8

  1. 12 Posts.
    is this why the announcement was "important but no I was tempted to buy the company shares until a friend stated a number of important factors worth considering!! The company had never pay dividend for close to 20 years. Patents are usually for 20 years. Therefore some of the patents from the company must have expired. Like any other industries expired patents bring other competitors into the market using the expired patents. In fact, I heard that a Queensland company is already competing with them. If the company cannot pay dividend when the technologies have patent protections, what is the chance of getting dividend when patents have expired?

    I certainly would like to know why the good news was released on the morning of 12 August to the market before the target statement. The board of directors stated in the report that they met and approved the target statement on 1 August 2003!! Immediately upon the news release, the share price shot from near or below 70 cents to above $1.00 before trading was halted to release the target statement (The timing must be a very good co-incident- I must believe so!!).

    Oznogg stated that he had seen that the company already had the Rotaloc technology to make pipes in the trenches prior to this new product and the new technology is more like an improvement than a revolution. Has this anything to do with the CE downplaying the importance?

    Last but not least, my civil engineering friend who is familiar with pipe laying was very sceptical of the claim that it can reduce the costs of the pipe industry by 50%. He reasoned that the pipe-laying process involves trench excavation, removing the surplus excavation, preparing the bedding for the pipes, laying the pipes on the bedding and then re-filling the trench with selected materials like sand or aggregate.
    The engineer stated that it is quite usual that the cost of the existing plastic pipes plus the cost of laying the plastic pipes on the bedding normally cost less than 50% of the whole pipeline costs. The costs for the excavation, removing surplus excavation and the refilling materials are quite significant. In projects it is not unusual for these activities to cost more than 65% of the total pipeline costs. Therefore, any claim that making the pipes inside the trench can save 50% of the total pipeline costs must be examined critically.

    After considering my friend’s wisdom, I re-read the news release and noted that the phrase used was ‘up to 50%’!!! Does the company spokesperson mean that we can expect a saving of 50% in most pipeline projects or it only applies to projects with exceptional circumstances?? What is the basis of comparison? Is the spokesperson comparing with concrete pipes or other plastic pipes? It is a fact that the market share of concrete pipes is slowly eroded by other pipes( plastic, fibreglass, metal pipes and other new materials). Can the new product saves up to 50% compared to these other pipes or the company’s existing products?

    There must be a good reason why the shares have very few buyers at 65 cents below the 70 cents offer!!

    I certainly need a lot of convincing now to be a 'true believer'!!!
 
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