Why ASPV’s management can NOT be trusted
I was/am thinking about ASPV. (it seems to have consumed me ever since the rev. miss)
This is my conclusion of my thought process…
The downgrades by analysts already perpared investors for the lowering of guidance… considering they themselves lowered guidance to account for the lack of MG revenue.
IMO, they will do +200M (or just making 200M) for 2006, as management says, but I don’t think they can be trusted. Here is why…
1. They told investors that a new partnership was very near in the spring of 2006. (a lie. nothing developed)
2. They told investors the revenue short fall was due to exchange rates and royalty payments. (maybe a partial lie. The real cause, I am sure, was that prescriptions for MG ceased, affecting the top line… this may be exposed in the CC on Nov 1st.)
3. They handle PR very poorly. They don’t know how to capitalize on good or bad news. (to be nice, i’ll blame this one on inexperience)
So, with the above stated I think ASPV may pop if management gives expected guidance, but I believe this will be a good selling opportunity to get out. (unless partnerships are announced)
The technicals are still very weak, and wall street has lost all faith in management. Because I see why, I don’t think the market is being ineffecient here. Even though they are a cash cow, management’s inability to deliver and lie created this discount.
Just for kicks… here is what management needs to do, quickly, if they want to gain investor respect (especially mine) back…
1. surprise us with not just one deal, but 2, on Nov. 1st. (but seeing how beggers can not be choosers ONE deal announcement on Nov 1st will do just fine.
2. stop writing checks they can’t cash.
If management makes promises, instead of deliveries on Nov 1st, I’m sticking my head between my legs and selling. period.
