Up against the wall

Finweek English Edition - - SIMON SAYS - BY SIMON BROWN

The Pin­na­cle trad­ing up­date showed im­prov­ing rev­enue, but smaller mar­gins will see HEPS off 16.5%-21%. On the other side, we see Mustek re­port­ing HEPS to be 20%-32% higher (a mas­sively wide range). I won­der, is Mustek pick­ing up some mar­ket share from Pin­na­cle? Also of con­cern are the debt lev­els at Pin­na­cle and while the trad­ing up­date did men­tion the board’s con­cern, it hasn’t as yet an­nounced any plans to re­duce the debt. The eas­i­est op­tion would have been a rights is­sue, but not when the stock is more than 50% off re­cent highs. An­other op­tion is to sell the 33% stake it has in Datacentrix, but find­ing a buyer is not go­ing to be easy. Over­all, the Pin­na­cle story is a mess, the Datacentrix stake was an ob­vi­ous plan to ul­ti­mately make an of­fer to buy out Datacentrix us­ing Pin­na­cle script, but with a col­lapsed share price that op­tion is off the ta­ble and it now finds it­self in a num­ber of tight cor­ners.

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