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Otelco, Inc. Message Board

  • walk57 walk57 Feb 25, 2013 5:43 PM Flag

    What A Difference A Year Makes!

    OTT cash on hand at 12/31/11: $12.4M.
    OTT cash on hand at 12/31/12: $32.5M.

    OTT is about to not only slash its debt by around 50%, but its also is going to get rid of its cumbersome, costly, and unsustainable IDS capital structure that no other company in America operates under. There is a reason why no other company does.

    OTT closing IDS unit price a year ago: $13.29.
    OTT closing IDS unit price today: $1.46.

    Something is wrong with this picture.

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    • i agree, makes you wonder how people invest.

      • 1 Reply to dewoodcox
      • I believe this year is an extreme opposite of last year for OTT. It must be the fear of the word "bankruptcy" because I see far lower risk in this security now than a year ago at this time when it was trading in the teens. And that's factoring in the TW & government news. Usually, much lower debt and risk equates to a higher price for a security. This has not happened to OTT...yet.

        Interesting that Weaver dropped this line in during the CC today: "The new simplified capital structure implemented by this reorganization will also provide financial flexibility, which makes us a more attractive acquisition target and provides potential upside for investors." Some could call this hype to encourage IDS unitholders to vote "yes" for the plan, but he is dead on correct. OTT's current capital structure stinks, making the odds next to impossible that any company could acquire it (or want to) as being an alternative to the BK option they chose. That will change after the reoganization process is complete.