from w-w-bb:

19.01.2007 - Total Rocketscience

The third and final company making up our Risk / Reward trilogy on shares for 2007 has so many investment negatives that most observers might not even give it more than a cursory glance. Although quoted on the London AIM market, it is based on the other side of the World, has reported revenues and cash flow of diddly squat and, more importantly, operates in an area of expertise so deep in boffinland that you need to be at least a 5 star techie to venture anywhere near it.

What originally persuaded us to give it a second look was the fact that legendary Stockmarket investor, Jim Slater, was pouring money into it via several successive rounds of financing. As we all know, Mr. Slater is a qualified accountant and hugely experienced corporate financier but clearly he is more at home in leafy Surrey than in the technologically rarified atmosphere of Southern California. However, he must have gleaned enough about what the company actually did to get extremely excited about it. In fact, by last Autumn, he had grown to like it so much that, to paraphrase the immortal Victor Kiam, he bought the remaining 51 % of the company that his vehicle, Original Investments, didn't already own.

The company in question was VIALOGY and, ever since it was fully reversed into Original just before Christmas, Slater's loyal band of followers have seen their highly speculative penny punt move on to the calculated risk category and been duly rewarded with a 50% shareprice improvement. We first latched on to this situation last April when we wrote a piece entitled The Cisco Kid ( see news archive ). To recap briefly, the company was set up by some brainboxes who had earlier worked together on supercomputing projects for NASA. Led by Dr. Sandip Gulati, the team appeared to have perfected software to detect and enhance extremely weak signals previously obscured by background noise. This may not seem particularly earthshattering to the layman but, apparently, the applications for this technology are not only revolutionary but almost limitless which suggests that an exponential rise in licensing income could well lie ahead.

Big news clearly travels fast on the Eastern seaboard because global behemoths Cisco and Boeing have already enlisted Vialogy to work on 2 major government inspired projects and these are just the ones that the company have been allowed to talk about publicly. As we reported in April, Cisco has contracted Vialogy to help with its IPICS programme which seeks to make sure that all emergency services and government agencies can communicate with each other quickly via computers and phones. The need to address this obvious requirement was highlighted by 9 / 11 when communications between different departments with different systems proved chaotic.

For its part, Boeing has recently confirmed that Vialogy has delivered a tenfold improvement in the accuracy and efficiency of the types of gyroscopes it uses in spacecraft and missile navigational systems. It is also known that both Cisco and Boeing see a major role for the technology in such areas as border controls and missile defence systems. Elsewhere a much smaller Texan company, Evolution Petroleum, is applying the technology to improving seismic evaluation of oil and gas deposits.

This initial clutch of applications is almost certainly just the tip of a very large iceberg that is going to float into view over the next few years and all that is required is a little patience. At todays price of 5.5p, Vialogy is valued at a mere 22m. To justify this valuation, the company would have to be earning say 2 million pretax. With cash reserves of 3 million and its heavyweight partners funding the projects it is involved in, Vialogy should be able to get through to breakeven without further recourse to shareholders. We would expect this stage to be reached sometime over the next 12 months. Thereafter, profits could / should escalate very dramatically as new applications and licensing income start to snowball.

On a two year view, shareholders could be rewarded extremely handsomely indeed. Vialogy is in so many ways akin to last weeks selection, CORAC. Both are now moving from the development stage to commercialization with the scales tipping away from blue sky risk towards the reality of cash flow. Both have mindblowing upside potential yet both have current shareprice action that makes drying paint look positively orgasmic. Although this presents an opportunity for latecomers, it is a frustrating byproduct of both companies involvement with highly sensitive technology and powerful, publicity shy partners. Moreover, the present lack of any meaningful numbers together with the sheer scale of future potential makes any serious stockbroker research well nigh impossible. All this will resolve itself in due course but, as they say in the Grolsch advert, all good things come to those who wait.

echo's of the first dot com bubble with this one

hardly! .... it's still only a penny stock

the thing about tech stocks is nearly everybody loses except the people who started the company, they usually end up in big mansions sniggering at the thought of all the fools who put them in it, just as every religion thinks its the one and only true one, every tech stock thinks its the only 20 bagger and the one exception to the rule, its like pyramid selling the ones that get in early at a low price make their money and get out at the expense of the fools buying later, by later with this one i would suggest anything over 10p.

I dont disagree with your remarks YUKIO. The problem for investors is they dont have any "tangible" numbers on which to base their investment decisions. If you could see some visible earnings then you as an investor could make a reasoned decision to invest or not, rather rely on "pie in the sky projections" , however this is not possible in start up situations.

A current example is TMC where the sp was hyped by certain individuals on this BB, recently doubts have surfaced about the future value of their nickel shareholdings, but as they have started nickel ore exports and presumably are cash generative we should shortly be able to calculate a PE ratio and thus put a real value on their shares.

TMC is actually off thread, but just to correct you a bit .... the price of nickel relative to TMC in its present development period is fairly academic .... in fact, i would be very very surprised if hard commod prices do not stay very strong indeed, with obvious fluctuations, over the next 3/5 years at least .... china and india and pakistan are gobbling up nickel, iron ore, copper etc etc as fast as it can be mined

keep trying,boys
is that the pathetic best you can do!

notlob
your the pathetic one making up lies that you have access to the company and know about why mr shah was sacked, i suppose you phoned up terry bond and he told you all the facts lol, what a loser you are.

yukio,you ae fortunate in that you will probably never know how stupid you are!

going nicely again today, happpy days.

come on children .... one thinks VIY is shit and thother that it will be the best ever ..... you've told us the same 20 times and the pair of you are getting as tiresome as 10B who seems (thank goodness) to have been banished

simple then, Cynic, don't bother to read us + save yourself the time and effort!
I know I wouldn't bother!

whether one reads or not (i don't), you still clutter up the thread with your stupid little squabbles

Here starts another squabble. 8-)

too bad, then Cynic. This is a BB, if you want quiet, suggest go down the local library.

'bout time you posted something useful then, instead of whingeing on.

Signs Memorandum of Understanding with Taiwan's Industrial Technology Research
Institute



London, 6 August, 2007 - ViaLogy plc (LSE: VIY), a leading innovator of
real-time network-centric signal processing platforms, today announces that it
has signed a memorandum of understanding (MOU) with Taiwan's Industrial
Technology Research Institute (ITRI) to integrate its products, SPMTM and
MicroSPMTM, with sensor systems developed by ITRI spin-out companies for uses in
safety, security, surveillance and infrastructure management

dow down 387 points, could see viy go below 9p

yawn

Do you think yukio will buy below 9p ?

It would be nice to buy at 8p the price institutions paid in the recent placing.

yeah they paid 8p a share when it was 15p, most have probably sold it and made their profits, just leaves you private investor suckers to keep buying it all the way back to 4p.

don't be so waspish - uncalled for ...... that said, that the institutions paid 8p is certainly no guarantee that sp cannot fall below that ...... btw, it is very likely that the institutions were obligated to hang on to their shares for say a year before being allocated any