Dinan being sold ?

[dmlgc]

Just as I had compiled all the arguments for having Dinan tune my X50i (I live about 30 miles from their Morgan Hill location) , I was doing some unrelated research and came across an item about Dinan being sold. Anyone know anything about this ?

http://biz.yahoo.com/prnews/080829/to353.html?.v=43

[superlubricity]

going public -> http://www.dinancars.com/bmw/press

[Suzie's Dad]

Wow, that's bizarre. In their IPO prospectus they give themselves a "deemed value" of $26.7M, yet they lost $1.1M in 2007 on revenues of $9.2M, and they lost $162K in the first six months of 2008 on revenues of $7.1M. As of June 30 of this year they had a negative net worth of $1.4M. Although revenues are increasing, this does not strike me as a well-managed company. For a company that has been in business since 1979, those results are terrible!

Their "IPO" is actually a reverse takeover of a shell public company on the Toronto Venture Exchange. These are common transactions in the oil business here in Calgary, but have a reputation that is somewhat less than stellar.

It puts a rather different complexion on the value of Dinan's BMW-quality warranties. Hard to get money out of a company that is bleeding.

[shenard]

Originally Posted by dmlgc

Just as I had compiled all the arguments for having my Dinan tune my X50i (I live about 20 miles from their Morgan Hill location) , I was doing some unrelated research and came across an item about Dinan being sold. Anyone know anything about this ?

http://biz.yahoo.com/prnews/080829/to353.html?.v=43

Just do it already! . I can't wait any longer for this software and want to buy ASAP as soon as they release it. Can you imagine how much of a beast this vehicle will be with another 75hp and 75-100lbs of torque.

[dmlgc]

Originally Posted by Suzie's Dad

Wow, that's bizarre. In their IPO prospectus they give themselves a "deemed value" of $26.7M, yet they lost $1.1M in 2007 on revenues of $9.2M, and they lost $162K in the first six months of 2008 on revenues of $7.1M. As of June 30 of this year they had a negative net worth of $1.4M. Although revenues are increasing, this does not strike me as a well-managed company. For a company that has been in business since 1979, those results are terrible!

Their "IPO" is actually a reverse takeover of a shell public company on the Toronto Venture Exchange. These are common transactions in the oil business here in Calgary, but have a reputation that is somewhat less than stellar.

It puts a rather different complexion on the value of Dinan's BMW-quality warranties. Hard to get money out of a company that is bleeding.

I work in Silicon Valley and have been through 3 successful IPOs, 2 of the three companies were losing money when they went IPO and are now large profitable companies. That part didn't bother me , it just looked like they were being bought.

I'm use to the traditional US style of file the S1, get investment bank signed up to underwrite it then go. I guess the terminology/method is different in Canada ? Of course I guess right now it looks like the Canadian economy is doing better than the states so maybe this was a good approach.

[Suzie's Dad]

Originally Posted by dmlgc

I work in Silicon Valley and have been through 3 successful IPOs, 2 of the three companies were losing money when they went IPO and are now large profitable companies. That part didn't bother me , it just looked like they were being bought.

I'm use to the traditional US style of file the S1, get investment bank signed up to underwrite it then go. I guess the terminology/method is different in Canada ? Of course I guess right now it looks like the Canadian economy is doing better than the states so maybe this was a good approach.

We have proper IPOs as well, but the reverse takeover is a quick and dirty way for a small company to save a lot of the cost of going public. I have also been involved in IPOs before and you are right that losing money is not important if there is a good story and opportunity for growth behind the business, such as is usually the case with software or Internet-related deals. But Dinan has been in business for almost 30 years and according to their prospectus/news release, their revenues this year will be barely $14M and they will at best break even. It's not like they spend billions on R&D -- right now they are advertising for ONE X6 50i to be lent to them for A COUPLE OF WEEKS for them to develop their over-ride software.

I question why they are going public. Does Steve Dinan want to cash out? (That's what I suspect, and if so that's a lousy reason for anybody else to put money in.) Do they need cash for some big R&D program? (Doubtful.) Do they just think that going public will help them suddenly increase sales? (Unlikely, but naive if true.) Anyway, I doubt that in the current financial climate they will even go ahead with the 'IPO' for a while.

[X6-Texas]

"having Dinan tune my X50i "

I am having trouble handling what I have!!

[Herms]

Originally Posted by Suzie's Dad

Wow, that's bizarre. In their IPO prospectus they give themselves a "deemed value" of $26.7M, yet they lost $1.1M in 2007 on revenues of $9.2M, and they lost $162K in the first six months of 2008 on revenues of $7.1M. As of June 30 of this year they had a negative net worth of $1.4M. Although revenues are increasing, this does not strike me as a well-managed company. For a company that has been in business since 1979, those results are terrible!

Their "IPO" is actually a reverse takeover of a shell public company on the Toronto Venture Exchange. These are common transactions in the oil business here in Calgary, but have a reputation that is somewhat less than stellar.

It puts a rather different complexion on the value of Dinan's BMW-quality warranties. Hard to get money out of a company that is bleeding.

they profitability doesn't look good, but difficult to say with so little info. also, the actually had a profit in the first 6 months, not a loss. also depends on how the company is organized. if it's privately held all by steve dinan, then he might just be paying himself a hefty salary to offset profits so as to avoid getting double taxed.

[dmlgc]

Originally Posted by Herms

they profitability doesn't look good, but difficult to say with so little info. also, the actually had a profit in the first 6 months, not a loss. also depends on how the company is organized. if it's privately held all by steve dinan, then he might just be paying himself a hefty salary to offset profits so as to avoid getting double taxed.

Agree showing profit in the first six months is pretty good in this environment.