Posted today on Investors Village message board.
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Msg: 4100 of 4176 2/1/2007 11:46:21 AM Recs: 40 Sentiment: Not Disclosed
By: short squeeze Send PM Profile Ignore Recommend Add To Favorites
IIG
Given the extraordinary volume of over 11 million shares and the significant decline in the price of IIG in the past 2 weeks, I am writing this one and only post.
First of all, I continue to believe that IIG remains a unique growth company. Their product (which I have had evaluated by many âtechiesâ) remains the âbest of the breedâ in enabling small businessmen to operate E-commerce websites effectively. Their current sales and marketing through seminars is an extraordinary effective one â although I believe they will expand their product distribution through other channels over time. Their technology is top notch; the recent product offering of âAvailâ communications has the potential to increase the earnings power of IIG significantly and will generate recurring revenue and profit. Many other new features are in the development stage.
I believe that IIG can earn (non-gaap) $2.25 a share in calendar 2007 and $3.00-$3.50 in calendar 2008. Thus IIG sells at less than 6x my estimate of earnings for calendar 2008. This valuation is absurd for a company that I believe can grow at 30-35% in sales and 50% in earnings over the next 3-5 years while generating significant cash. I estimate that cash is currently (Dec 2006) in excess of $35 million and can climb by an additional $35-40 million by the end of calendar 2008. This provides significant opportunity to buyback shares and start a meaningful dividend policy.
The bears continue to spread rumors of further AGâs and BBB legal action. How would they know? Unless they have inundated these organizations with false complaints (like the rip off report) or made illegal payments or both. Isnât it fascinating that the state of Illinois instituted a legal action without any discussion with the company first?
I have used this weakness to add to my position. I now own in excess of 1,720,000 shares for my clients and my own account. I continue to believe that the stock is worth a minimum of 30x 2008 earnings or $90 to 105 in one yearâs time (without a short squeeze).
Management has proven to be exceptional having dealt with fraudulent legal attacks on its business model by unfettered government agencies while growing its business significantly.
Having checked with certain large institutional and individual shareholders, as of this morning February 1, 2007, I believe I can account for over 11 million of the 12 ½ million shares outstanding by individuals who are long and continue to believe in IIG. This ignores many other institutional and individual shareholders. Thus the noose around the shorts will eventually tighten â âhe who sells what isnât hisân, must pay it back or go to prisonâ - Daniel Drew
Sincerely,
Neal Goldman
President
Goldman Capital