I'm sure most people posting have not read the 88 pages just submitted to the SEC. Here is what is holding this stock back. THIS month Velt must come up with cash to pay for a previous acquisition. They stated in the report that they don't have the money and must either obtain it thru equity or debt. It might be a little late in the day for equity so possibly an increase in the HSBC funding vehicle. Who knows? So one morning this month you may wake up to a bankruptcy filing wiping out your equity or a pleasant pop. Too risky for me! Good luck.
We've had a thread on this issue already. According to the 20-F, Velti is REQUIRED to pay 16.5 by mid-April. We're at Mid-April and there is no announcement of additional debt financing or new equity offering. This would have had to been done prior to mid-April if additional financing was required to pay MIG the 16.5 mill. Secondly, "we anticipate that we will need additional financing in the next three months to meet our ongoing capital commitments and to fund our operations."
So mid-April is here, the payment is due, and no announcement thus far regarding what path if any funding is going to take for getting more captial for MIG or otherwise. An announcement is required if it were to happen. Three Months puts us between April 11th and July 11th. So at this stage, it doesn't look like capital needs to be raised for the acquisition (commitment), but more likely operations, and possibly not at all. They have to keep a close eye on their spend, but IMO if all else fails, the worst case is an equity offering.
You're too pessimistic for my taste. if you follow the way Warren Buffet invests. Everything that you say is the exact reason to invest. The company is undervalued. they have a lot of potential, lots of sales, big institutional investors. and most importantly in a industry that is just a baby at this time. The mobile market is a massive industry. Velti can be very big as long as they have a great leader. By the looks of it, they do.
the majority is optimistic about Velti being successful. The only reason people are slow to invest is because they are waiting closer to the official release date of the Q1 and especially Q2 Q3 earnings. Many investors don't like having their money sit for too long and right now they are just waiting for the Velti Stock to marinate in good news and then when the right time comes ...everyone is in, stock goes up.
I am not going to call you a fear monger since those who read the report for the first time might be thinking the same and I won't blame them. VELT sure took a lot of time to spell out the risks but that's what responsible companies do. However, institutional ownership is increasing steadily over the past quarter and they obviously know the current situation. If you follow the big money, you win 9 out of 10 times. You are not correct in saying they need to raise money to pay for MIG. The commitment is less than 50% of their cash holding as of 12/31/12. However, they will need to raise money for capital expenditures till 3Q13. With HSBC's waiver, you may be correct that they will provide another $20M at a higher interest rate to ensure that their $50M is secure. By getting VELT thru to 3Q13, they can feel more comfortable with their stake. If so, this will shoot up like a rocket. Another scenario is MIG may agree to push out the cash payment by another quarter. Remember that the other half of their payment is in stock and what's the use of that if VELT has to file BK? - they will lose 50% of the 'money' owed to them. Either way, I think they will get through this with more debt - which is no biggie as they will start paying it down rapidly from 2014 onwards from the FCF.
The AUGT lawsuit was settled favorably. They are releasing new products. They are actively involved in the roadshows and seminars. All the dirty laundry, including any bad financial controls, is old news from management that has been let go. It is the Jeff Ross show now.
I am not saying there in no risk. Nobody needs to listen to me if I ever said that. But the gorilla in the room (HSBC waiver) has been taken care off and so has the chimpanzee (AUGT lawsuit). The capuchins and marmosets can be dealt with much less difficulty. The stock will be relatively flat ($1.80-3.00) till 4Q13 and then go parabolic as the new business model begins to pay dividends.
Sentiment: Strong Buy
Your comment is one of the best on this message board. I am a new Velti investor ($1.96) and i have three different stock programs (which i know people don't believe works but it has been right 100 percent of the time for the last year for me) has Velti as the number one Penny stock investment with hundreds of signals saying that the stock is going to go up. they also rate Velti as a very strong buy.
I always do due diligence before investing and This company has so many strong signals. I have invested in very risky stock...stocks in companies who release news 2 times a year, being sued by shareholders, #$%$ sales large amounts of debt etc. Velti is for from being risky. Matter of fact they are way a head of the game....just a seed getting ready to burst.
It is a 99.99 percent chance this stock with quadruple this year and by next year hit highs they have never hit before.
Man, you really know your monkies...
But parabolic? I hope to God Almighty that happens as I have a lot at stake, but I know they have zero margin for error going forward. And I mean zero.
Regardless, as I am down 80 percent, I have no choice but to stay in the game for that reason alone, plus the fact that I still do believe that the space Velti is in has just enormous potential. And with the ubiquity of smart phones/tech making their way to even the most remote corners of the globe, the possibility for explosive growth is very big indeed. I just hope they are the company to do it.
Keep the faith.
At the moment it looks like the nightmare.
The wet dream gets funded by a replacement buyer, another subsidiary with a new credit facility, funding from an investor,... The wet dream leaves a lot of possibilities, but no dilution.
hey Chicken little, can you explain why Fidelity increased their share purchases by 4 million or 14.4% of the outstanding? as did some other firms.
You realize they have a game plan, that included cleaning house and adding experienced executives.
Could "plan B" talked about by the CFO include selling the company in its entirety or selling preferred shares? PPS is over sold, over shorted and down right attractive to the likes of Fidelity and Discovery Group.
True, preferred shares will be a great Plan B. Institutions will buy those, just like they are buying the common stock with both hands. Great idea. But they won't be selling the company - Ross is here to make big bucks like he did at Sybase. He might contemplate a sale in 2015-16 for a few billion. No way Jose he is selling anything (other than preferreds) till then.