Not sure how I was sucked into this gem but need some thoughts on the 20th.
I thought this was a deal @ $1.50 but now question my sanity at under a buck!!!!
Please post why you think this turkey can turn things around or if you have a legitimate case as to why it will fail I would like to hear that as well.
Holding for now
Bankruptcy is literally impossible at the moment considering their assets outweigh their liabilities so it's a classic liquidity crisis which is what the shorts don't understand.
Velti is not and has never been an insolvency case. It has always been a liquidity crisis much like banks in 2008-2009.
If Velti wanted, they could issue junk bonds to finance their HSBC loan AND pay developers but considering they haven't sought debt financing other than HSBC, I have a feeling old Moukas and Ross have away to stave off the liquidity issue.
Bankruptcy is absolutely possible even probable. Their assets are heavily tied up in very very old receivables. If a reasonable percentage of them are not collectible they could easily go bankrupt. The fact that they are accused of not paying their bills is a canary in the coal mine. Also companies go bankrupt all the time when their assets exceed their liabilities. See XIDEQ as a recent off the top of my head example.
VELT burned 34.3 million in free cash flow last quarter alone. They have 16 million in cash on the books as of the end of Q1. It doesn't take much imagination to see how a company that would be out of cash with 1 more quarter like last and who is being accused of not paying their bills could find themselves in bankruptcy sooner rather than later. They are probably only around today because they got a cash injection last quarter. You can't count on the money tree growing forever.
Short term upside...buy out like S Velt will be 3$, financing dealt like ALU velt will be 2$, down side.. BK velt will be 10c, dilution Velt will be 70c. Long term, if no BK and Velt turn it self round and make some decent income back to 15$.
Thanks for the comments gang, it looks like the board is as divided as I am.
I think I will roll on this one and hold through earnings. I am in with a $1.21 average, if it goes below $.90 I will drop it one more time until some clarity comes out.