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|twix386: The Prophet,
Agreed, so how/where do Seymour place their share price target? That's what I was wondering as they are apparently coming up with one soon in their Brokers Note. It's why I placed a fairly low(ish) number when compared to what we think could be realisable just next year.
You make the point too, that it seems largely guesswork (nice, though) to issue a share price target at the moment. So, maybe Seymour will be making an educated guess, possibly based on conservative Cisco sales projections, as this is the revenue earner that Terry's smile confirmed, made breakeven possible in 2007. If that's the case, I hope it's higher than my guess. ;-)
I wouldn't expect others to guess, but I do wonder how Seymour will justify their share price target when we see the Brokers Note? It will make interesting reading.|
|nick2412: Just wrote up my scribbled notes. Good to see The prophet, TP100, roadking and another poster there. I'm sure they will correct any inaccuracies.
Going to AGM's can give extremely useful insights and it pays to meet the management face to face. The ViaLogy AGM was no exception and extremely useful. I can honestly say I was impressed and encouraged especially by the Einstein-like brains behind ViaLogy, Dr Sandeep Gulati, who gave a very impressive presentation.
The new American CEO, new at least to UK investors in OIP, Michael Kelly, has a reassuringly impressive CV and came across as very highly motivated to ensure shareholder value is delivered. He's been instrumental in the last year or so in directing ViaLogy's technology to the most commercial product sectors.
The finance and pr and Executive Chairman, Terry Bond, remain as the team representing ViaLogy and its shareholders in the UK. That makes a sensible balance.
Jim Slater read went through the formalities after a warm and jovial introduction from his friend and colleague Terry Bond. JS retired at the AGM citing his age and a desire to avoid the travel burden to California, where ViaLogy are based. He emphasised that the acquisition of ViaLogy would prove to be a practical example of his major investor education theme run you winners and cut your losers. He also confirmed he would retain all his shares.
Three former OIP directors, including Jim Slater, made way for those who have been running ViaLogy - Dr Gulati, Michael Kelly and another director whose name escapes me.
The CEO, Michael Kelly, read out a statement that gave some insight to the company culture within ViaLogy. He emphasised that the company combined youth with experience. Average age is about 45 and nobody comes to work for ViaLogy without ten years solid achievement. Some recruits have given up safe, lucrative positions with major companies because of the attraction of working for an emerging innovative and exciting company like ViaLogy.
The good news - after the good-natured debate on investment styles on Mike Walters site - is that it is official; ViaLogy is not a 'blue sky' company in the usual disparaging meaning of the term! Retiring (but not shy) Chairman, Jim Slater, was at pains to point out that ViaLogy should not be given that label and the company is on the brink of commercialization and significant revenues.
A questioner asked: Will ViaLogy break even next year?
Answer from Terry Bond in his new role of Executive Chairman Position: I can't answer that but I can give you a smile!
The climate on AIM is such that Brokers will not let company's make a statement unless they can prove it; that makes life difficult for ViaLogy in terms of expressing anticipated revenues.
Agreements have been signed, including development payments to ViaLogy, with Boeing, Cisco and Evolution Petroleum. Cisco looks like the early revenue producer on a product royalty basis. Upfront payment is made by all partners to cover or subsidise development work. Jim Slater also added that the Cisco and ViaLogy team were "like blood brothers." It sounds like a true collaboration in which ViaLogy is playing a significant role and joint presentations are made.
Someone asked why doesn't someone just buy the company given ViaLogy's technology is capable of securing substantive revenues from so many mass markets? Jim Slater replied: "that's a very likely possibility." He probably needed to add (and perhaps he did) "in the future" as takeover targets tend to be more mature in their revenue streams than ViaLogy is just yet.
The question of competition was raised: the response was 'we have been unable to identify anyone.' Sandeep Gulati added that the real issue was about who competes with the major partners with whom ViaLogy are collaborating on products.
Dr Gulati gave an excellent presentation and stuck me as highly competent and commercially focused. He must get constant references to his astonishing intellect so when Terry Bond in his introduction alluded to 'the brains behind ViaLogy' Dr Gullati chipped in with a modest 'skip that bit please.' Here are a few things that arose from his presentation:-
Border surveillance ViaLogy are developing a specific product that overcomes the existing problems in apprehending those crossing the border. There is a maximum 16 minute window of opportunity to stop border crossings ViaLogy's product fits in with that time span. ViaLogy are partnering with Cisco on this. The market and potential revenues are very sizeable (figures were given) and "all nations want it." Boeing is also involved.
Foodnet is an FDA linked project and addresses food safety issues. One of the problems is coordinating test lab results from around the country and giving out a coordinated and prompt national response to outbreaks like E-Coli. ViaLogy is producing a product that addresses that need.
There is a similar need for improved response time with consistent and synchronized public information for avian 'flu. Again, ViaLogy has the capabilities to address that.
Dr Gulati showed a fascinating slide that highlighted the different capabilities of species to sense and visualize objects. Apparently snakes are pretty deft in this department. ViaLogy is aiming to incorporate some of those abilities into an electronic eye missile interceptor in collaboration with Boeing.
Cisco's IPICS project was covered and Sandeep highlighted how it addresses the need for emergency services to communicate with each other regardless of the system any single agency uses. The unappealing buzz word that captures what the project is all about is 'Interoperability'. The IPICS solution can of course be applied to all sorts of industry's and settings - airports, hospitals, universities and private industry. ViaLogy's technology has been integrated into specific Cisco applications and it looks like being one of the main projects likely to drive revenues in 2007.
Mass spectrometry 80,000 machines which cost between 250,000 and 1m each. That's a big market for ViaLogy. I am not convinced that it is a high priority project for ViaLogy as the timescale was referred to as 'medium-term' in the AIM Admissions document.
Geo-seismology current seismic technology is limited by background noise. ViaLogy are working on a commercial product with Evolution Petroleum that aims to overcome this obstacle to greater accuracy. The size of Evolution was questioned and whilst they are listed on AMEX they are a relatively small company. That doesn't matter as the agreement is only applicable to Evolution's oilfields and it's convenient to both parties to conduct the development work. The finished product can then be offered solely by ViaLogy to all the major oil companies. Trial results should be available by December.
There was a consensus amongst board members and shareholders alike that the company was undervalued and the share price too low. Terry Bond said that the AIM authorities would frown on any significant rise in the share price prior to corporate action. Now that was out the way there would be an orderly series of press releases. Financial Dynamics, one of the best PR firms, had also been appointed. They also had the resources to represent ViaLogy in the U.S. ViaLogy will also produce a new website and appoint a scientific advisory board.
Cash (my estimate about 2.5m) is adequate with partners paying most of the development costs. Jim Slater confirmed that the other holding (22% stake in unlisted Acrobat) would be sold at some stage and add to the cash resources. Listed surgical devices company, Corin, have acquired a stake in Acrobot. A guesstimate on the value of ViaLogy's stake in Acrobat would be about 1m, however, the directors think it is gaining value and it makes sense to hold it for the meantime.
All the board emphasised how they were extremely focused on commercial success and wanted to see the share price up to reflect recent developments. The point was made that the market would not know how to value ViaLogy until figures were released. Commercial confidentiality and the problem in being precise about revenues from new projects from the likes of Cisco were cited as the reason that company initiated figures would be problematic.
The Seymour Pierce representative confirmed, however, that they would produce a research note and that figures consisting of SP's projections would be included. No specific timeframe was given but I got the impression it would available in weeks rather than months.|
|nick2412: General, yes, I mentioned Evolution and Tim Freeborn before. I think ViaLogy would be a good match with them and that could do wonders for the share price. I have reservations about both Evolution and TF but I think we could multi-bag with a well-researched, upbeat(but not hyped) Evoluton note from TF and good markets for small caps. That prospect overcomes the reservations! That said, I think the time to judge is say three or four weeks after impact day (AGM and name change).
I also see that Buchanan Communications have been very good for BPRG in terms of PR. They would be a good appointment for ViaLogy to consider. They have got BPRG putting out announcements in the form of RNSNON which I think relates to news releases that are are not deemed to be significant enough to put out as RNS - distributors, non-board appointments. The LSE has tightened up so much on what AIM companies can RNS there can be long perods of silence - the RNSNON overcomes that.
I think ViaLogy could do with representation in the U.S. but of course they have to keep an eye on costs. Again I see BPRG have used Roth Capital and if ViaLogy used Roth for a research note etc. then that could be interesting. All depends on how much Roth would charge for representation/coverage.
If there is good newsflow, a decent research note with some figures and a double figure 'fair value' price then ViaLogy with share price could take off. If there is no sign of that after a month or so post listing then I am with you on a broker change. There is plenty of fire power for the share price in terms of the story but it is up to the broker, PR company and the ViaLogy team to get the message out after the name change.|
|nick2412: Trying to look for relatively newcomers at a similar stage to ViaLogy and looking at comparisons just to give myself a reality check regarding my belief that ViaLogy/OIP is significantly under-valued. It can be a fruitless pursuit to find comparisons for valuations when technologies are pretty unique as in Vialogy's case. This stock, Oxonica, however, struck me as having several factors in common with ViaLogy.
Nanotechnology play, Oxonica.
Fairly recent listing (July last year).
Revenues last year 1.28m expected to increase to 8m this year. (Vialogy could mirror or exceed this.)
Products applicable to the oil industry and other sectors and could attact a big name player for a commercial deal. (Vialogy could follow this path with a product for the oil industry, it is developing products for other sectors and already has signed with a big player in the communications sector, Cisco - a deal that appears to qualify as 'commercial status' by any reasonable definition.)
Oxonica cash June 2006 £2,756,000 (OIP/ViaLogy about the same - ViaLogy are likely to have much lower cash burn than Oxonica's historical cash burn - reason for saying this is that companies have to prove to the LSE that they have 18 months worth of cash. Both companies could be in profit for 2007 although ViaLogy's Cisco revenues and other sources of income are hard to guesstimate. Maybe a broker note will be forthcoming to help on this.)
Oxonica has a major astute investor in the form of Richard Farleigh. (ViaLogy has Jim Slater)
Oxonica has a market cap of 59m (And that's where the similarities end! ViaLogy at 4p wil be valued at a fraction over 16m)
I make a 59m market cap for ViaLogy a share price of 14.75p
The market needs more data on 2007 financial projections for ViaLogy. It's not enough for the market to see high tech, patented technology these days to generate excitement and share price upside. Figures and more figures is what the market likes to see. I hope a broker note will filling in the missing gaps - particularly with regard to anticipated revenues from Cisco.|
|nick2412: Seems to be clear what has happened - OIP has been able to pick up the rest of ViaLogy as a steal of a valuation of 8m because of the cash held by OIP. Markets then only factor in 8m because they don't look beyond the superficial headline - at least at first.
I'm just delighted at the minimal number of shares OIP have to issue - if 400m new shares were issued instead of 93m (which could have happened if TB/JS were not such good negotiators) a 10p share price for example with a m/cap of 70m would still have been achievable on the back of confirmation of early Cisco royalties.
With just 400m shares, however, holders can look forward to a potential share price of 17.5p with the same market cap of 70m. There are so many examples of blue sky companies without revenues that highlight that a sub 50m m/cap for Vialogy would in my view under-value it.
More tothe point ViaLogy is not one of these blue sky plays with high cash burn and distant projected revenues in 2020 from a company that can't be named for confidentiality reasons. The link I put up yesterday shows Cisco will name IPICS customers within weeks. On that basis royalties will come in for ViaLogy next year. Cisco doesn't get involved in small markets and IPICS is world events driven so I think 2007 royalties will be significant for Vialogy with its relatively low cash burn.
At the moment the market is not looking below the surface, that is, the car boot sale price that OIP have paid. So it's up to TB and the advisors to point out the early valuation anomoly through using research notes, using the press and generally getting the message. I'm going to just watch and wait for a while and if we are not significantly higher by December (10p or more)then I'd like to see a change of broker.|
|the prophet: OT: GA,still follow BPRG with a v.modest holding, all seems to be doing fine and making decent progress. atb,TP
-can I answer how I feel?!!
-I've read the document a couple of times and had a hard think about the disappointing share price action since its release.
-I feel the market has got it wrong (brave or stupid thing to say or could be brave and stupid, I know!!!!!)
-my view is that the deal put forward is a good deal for OIP shareholders, it also has to be seen as a fair and equitable deal for all parties, and that includes all the shareholders of Vialogy.
-There is a view that if the share price raced away (perish the thought!) that that would indicate the deal was perhaps not quite right or fair. And that could have consequences that we would not wish. So, perhaps the share price being around current levels ain't too bad after all!
-OK, we all want shareholder value and some of us, having been in the shares for not an inconsiderable length of time, might well feel shareholder value is long-overdue!
-I'm classing myself as ones of those, btw.
-well, I think we have just taken one important massive step on the hopefully not too long road to reaching shareholder value. The deal that has been struck means that sub 100m shares have to be issued for us to have 100% of Vialogy. I'm very happy with that. If V was given a much higher valuation, then we would have had to issue a much greater number of shares. What it does also mean is that there is going to be a period of time til the market appreciates the deal and what Vialogy can actually do. I don't think that is going to be a long period, and I am confident that the combined forces of OIP/V will be able to deliver.
-what will they deliver exactly?
-well, I am looking for improved publicity/recognition for V now that V will soon have its own quote
-I am also looking for real and substantive news-flow. Reading the document, it is clear that V are working on a wide range of projects and contracts and so it is not unreasonable to expect these to produce news-flow on a pretty regular basis.
-the Cisco IPICS project is just one that I would excpect V to capitalise on.
-When all the dust has settled, with much fewer shares in issue that I expected, I expect to see substantial share price appreciation and a multi-bagger from here in the medium term.
-all imo etc etc!!!!|
|itsnobigdeal: Surely when a major rights issue (or other deal) is in prospect the Company or its brokers are allowed to go into the market to hold the share price steady to the intent that no sudden movement takes place in the share price. This is often required because if the share price leaps upwards this could increase the demand for shares in the rights issue beyond what it ought to have been, whilst if the share price leaps downwards this could prejudice the entire rights issue. Possibly this explains Mr 145's activities. I am sure that Waldof knows and perhaps now that popular demand for an explanation has reached such a pitch he could confirm for his many fans what is happening.|
|optimist at large: It's important to remember that the OIP share price still only values Vialogy at about US$ 40m and there is very, very little general market awareness of the possibilities.
I sometime think that a significant proportion of the free float is represented on this forum.|
|nick2412: That's what I like to see - a consensus amongst shareholders - post deal/s 10p plus it is then!
Looking at the graph the share price spiked to 9p on speculation of a listing for Vialogy and that was without any accompanying deals. I'd hope that listing discussions are back on the agenda given the positive statements the company made about Vialogy addressing new markets. On that basis, I'd expect the share price to at least return to 9p given that any listing prospects will now be on the back of a deal or two. I should add 'hopefully' as it has been a long wait for the first deal. Let's hope it will be like buses ...when one comes etc...
The technology is difficult to understand and I wouldn't even begin to pretend I understand it, but I did speak to a U.S. friend who grasps these things much better and he reckons that Vialogy have more valuable IP than Viaspace.
That becomes interesting when you look at the market cap Viaspace command. I suppose they do have an interesting fuel cell play and one or two other bits.
A high profile deal or two with some revenues will make the Vialogy listing and Vialogy/Viaspace valuation debate even more interesting. Viaspace by the way is valued at a shade below U.S. $593m or 339m sterling. They do have cash and a portfolio of investments but the comment from the U.S. of Vialogy having the superior IP is worth doing your own research on.
I think that is underlined by the fact that Arroyo (a subsidiary of Viaspace) needed Vialogy's IP for the bomb detection development deal.
I'm not even going to begin to do the implications for the OIP share price if they were valued similarly to Viaspace but it does highlight that the 10p plus figure is by no means outlandish and could be just a starting point. Wishful thinking or highly achievable ... time will tell.|
|the prophet: Serena
-here is the score....Original has market cap of around £13m or so, with £3m+ in cash, investments are 42% of Vialogy and 25% of Acrobot.
-Acrobot could well be worth something very nice and a lot more than the £250K that OIP paid for their stake, but lets discount it for now.
-That leaves 42% of Vialogy, the OIP share price implies that Vialogy is worth some £25m (ie 40% of £25m is £10m)
-Therefore an investment in OIP depends on your view of the likely worth of Vialogy
-Have we, in V, got a world-beater on our hands, that is capable of making a significant difference in a mutitude of different industries, that can earn substantial revenues from those industries and that Vialogy will, at some point, be valued at significantly more than £25m for us to reap the rewards via a greatly increased OIP share price?
-those, I think, are the pertinent questions.
-given that we know the tech works, that it has been validated by major organisations, that V are in detailed commercial talks, that OIP have talked of 'substantial revenues' you can stick a pin in a figure for valuing Vialogy!
-my view is that OIP shares currently look good value, as the risk/reward looks very favourable.
-granted, we need the evidence of the commercial contracts to make a view as to what exaclty is the upside here?
-but Vialogy's technology is addressing multiple market sectors, eg micro-array, mass-spec, seismic(oil industry), sensors ,just to mention a few. I believe V's tech has a worth to each of these industries.
-I see no reason why Vialogy could not be worth a something in the region of £50m to £100m or more, implying a share price for OIP in the region of 8p-16p or so....
-ie, a multi-bagger up from current levels
-thats just my view, imo and dyor!
-it may be that I am wildly wrong.....up or down! Time will tell, but I'm happy that the current share price represents good value and decent upside.|
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