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Velti Halka Acık Limited Şirket Message Board

  • j.jacos j.jacos Aug 10, 2013 5:44 PM Flag

    Any distressed equities experts here?

    I'd like to hear from someone with actual training and expertise in distressed companies. How do you view this investment from a purely quantifiable perspective?

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    • Everything comes down to whether they can collect on their Accounts Receivables.

      If they can this is at-least a $3 stock if not this is going to zero.

      This is an extremely high risk stock. I consider myself a high risk player and still I do not have the stomach to take a position here.

      Even though they have 335million in Accounts Receivables + Cash they do have about 200million in liabilities too.

      So can they collect on their 335million A/R or not?

    • Velti is way oversold from $8. Their top two people have came from multi-million dollar companies and have made them extremely profitable. Shorts have invaded and were successful in ruining the stock. Their numbers this year will be strong although lowered by mgt due to nature of business. Mobile ads are expected to be still a huge growing sector. This is a $5 stock here overly punished.

      Sentiment: Strong Buy

    • VELT holds no "deep value" assets which can be used to unlock a significant premium.

      Deep value assets could be cash, real estate, valued PPE:

      1. Cash: some equities trade below balance sheet cash, so that the market cap falls below cash balances. This was common during 2001 - 2003 among small tech companies. VELT has no cash, in fact, VELT owes $45 mil to their bankers in what is likely a secured holding.

      2. Real Estate: Some firms - often big box retail - have real estate holdings which are more valuable than the enterprise. K-Mart was an example, and it was brought private and re-issued after being stripped of assets.

      3. PPE: Some firms have state of the art manufacturing, research or other facilities which are valuable to strategic partners. VELT does not have this type of asset.

      The only possible deep value here is technology patents. Most of their patents revolve around SMS, which is a commodity business in commercial applications.

      The view is that VELT is not a deep value long play, and that a combination, if it's at all possible, would involve a non-premium deal with a non-strategic partner.

      • 1 Reply to hammerandtong2001
      • hammer, your analysis is true for a company that is being looked as a bankrupt play or buyout candidate. VELT is neither. It has been dissected by shorts due to it being an offshore company in transition with cash flow concerns. Either Ross and Baker are incompetent, pathological liers who will face jail time soon (in which case this company is toast) or they are telling the truth to the SEC/shareholders and this will be another success story where the demand was out there and the company simply changed its business model to capture it in a responsible way with long term success. I am betting on the latter, based on the credentials of the new upper management, the actions they have taken recently and the niche market of their products. I am waiting to buy more once I get confirmation of the turnaround (either next week or Nov).