Analysis of the notes the 15c level -- ERG trade data forum

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Date Posted: 08:06:24 02/19/03 Wed
Author: Bit of a thesis.
Subject: Analysis of the notes the 15c level

Don't detect ERG tanking, see it as accumative with an upside to it, can be driven to the extreme by announcements obviously, several of which could come at any time.
However, ultimately all of the notes have to go through, the new shares have to come on stream and this will be quite a turbulent period.
It is a bit of a catch 22--for on fundamentals you see ERG eliminating 18.87 million in current liabilities and 249.7 million in non current--I see the Tony point at Ozestock in relation to the 249.7 mill--yes always counted, then I think you have to read the exact sentence and then look at the reality--the actual elimination of the debt that is going to occur. Take Tony's point as extrely valid.
Much will depend on which contract comes first, to get the improvement in eps--which technically it doesn't really have as you need a net profit to get an eps--ERG will be possibly ebitda positive, but that is not a profit??so we are talking about forward analysis at this stage.
Okay, so if we get the contracts coming in, being outsourced Sydney San Francisco (Seattle estimated by Lost to be May) it can justify a higher share price, while waiting for the 50 million to be raised from the notes issue--the full lot of shares don't come on stream untill the rights are out of the way--so your getting staggered dilution offset by the improvement in fundamentals.
Shaun Duffy has stated the conversion of notes is going to happen soon after approval.
Anyway the catch 22 is --you'll have people who have the notes being in the situation of being in a profit possibly cashing in their chips---but they really would be selling them cheap with all the improvements to ERG happening, nevertheless it will be in estimation a turbulent period as many will undoubtedly sell or average out.
All of these things is stuff to look out for in the future.
After the next financial report which Lost states will be fairly neutral--the next one after that should be a lot better, youv'e got your rise in NTA--more revenue all of the cost savings which are substantial.

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Replies:

With any Delloitetangibilty coming into it--and possibly a good PCL. (NT) -- reviewed annually--if not this time next time ERG reports., 08:23:36 02/19/03 Wed
further improvements again adding to what has already occurred (NT) -- and is occuring., 08:26:04 02/19/03 Wed
- then one wonders with the rights the more shares you have (NT) -- the more rights you are entitled to-with improved&improving, 08:28:41 02/19/03 Wed
  - company your fear may be that it is too cheap and you should buy more (NT) -- not sell--but buy instead., 08:30:50 02/19/03 Wed