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PaxtorReborn (92.80)

Can someone explain GSIG to me?

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October 14, 2009 – Comments (5) | RELATED TICKERS: GSIG

At first glance they look like a hugely undervalued company

P/E 2

P/B 0.09

market cap : 33 M

cash 183.27M

 

On closer inspection, I see that they are at risk of being delisted from NASDAQ (not a huge problem in my opinion).  I've heard they have dilution issues, but I can't find any information on that.  Additionally, why havent they filed a 10-Q since 2008?  They keep filing "NOTIFICATION OF LATE FILING"s.  Can someone explain this to me?

5 Comments – Post Your Own

#1) On October 14, 2009 at 12:39 PM, bullishbabo (100.00) wrote:

Delisting from the NASDAQ can happen simply from trading under $1.00 for too long, since average bid price must be over $1.00 for a certain period of time.  The late filing issue...that's something to worry about.  I currently own GSIG as part of a very diversified basket of micro caps, but I'm a bit leery about GSIG myself.  There's a good chance I'll sell GSIG for a different undervalued micro cap in the near future. 

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#2) On October 14, 2009 at 1:06 PM, PaxtorReborn (92.80) wrote:

Yes, I've been reading more and it seems like too much shennanigans for my liking.  Might invest something tiny, but probably not

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#3) On October 14, 2009 at 2:02 PM, anticitrade (99.46) wrote:

GSIG was a top recommendation from my model for a while, but I didnt like the late filings.  It's a little speculative for my taste.

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#4) On October 14, 2009 at 2:07 PM, throwerw (99.83) wrote:

gsig is a long story... after acquiring another company using high interest debt, the market tanked, business dropped off, and it became apparent that there was a problem with the accounting of their revenues going back 4-5 years.  those numbers you are referring to are not the actual numbers, as no numbers have been reported since the acquisition was made.  they have continued to make their interest payments, but because they were late filing their report they breached their debt covenants.  a deal was made to swap 110 million in debt for an 80 percent equity stake, but this has not occurred yet. current shareholders get warrants, but not many details have been given.  they should file all of their reports by the end of the month.  the revenue restatements should not have any material impact on their cash position, which is closer to 50 million now, i'm not exactly sure.  they are expected to write down the value of the acquisition significantly, to the tune of 200 million.  it's hard to say what this stock is worth, i own some, but i bought into it before the dilution was announced.  that changes the valuation significantly.  if i had to guess, i would say the filings will lift the price over a dollar, but this does not seem significantly undervalued to me anymore, given the circumstances.

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#5) On October 14, 2009 at 2:14 PM, PaxtorReborn (92.80) wrote:

Thanks everyone, I've decided against it

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