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International Investing / Australia (All-Ordinaries)


Subject:  Re: Iocom / Optima Date:  1/30/2002  7:21 AM
Author:  wayjo Number:  3424 of 6186

Karina, until you posted this I had never heard of Iocom. However, I have done a small amount of research over the past hour and I think from my assessment this "investment" can probably be considered an education in sharemarket hype.

A brief history as I understand it....

- Floated onto the sharemarket in December 2000 at $1.00 per share.
- Made various public announcements about all the wonderful things they were going to do and alliances etc...
- Made a profit in 2000/2001 year of about $900k because of Y2k etc..
- Made a number of acquisitions issuing shares each time to buy the business.

June 2001:
Announce a loss of $12m dollars and write off $5m due to the acquisitions. Even without the write off they still made an operating loss of $7.2m on sales of $8.2m. For every dollar coming in the door they were spending $1.90 to make it.

So after raising $12m in shareholders funds, they now sit at $1.5m due to accumulated losses. Latest Cash flow report for September shows they burned through another $589k.

ASX queried the company as they appeared to not have enough cash to last another 3 months, so the company issued another 3.7m shares to raise $500k. Poor people paid 14c per share in a sharebroker placement!!

Again issued another 4.7m shares in December for working capital purposes at 5c per share this time.

Interestingly, in all this time the Directors have bought virtually no additional shares even though the price has plunged 90%.

So as at December they have 36,536,644 shares on issue with shareholders equity of approx $2m or less depending upon the loss for the first half. That's ab