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Multiband Anonim ┼×irket Message Board

  • noitall2000 noitall2000 May 16, 2013 12:46 AM Flag

    Something Afoot

    In 40 years of investing, I've never seen any company procrastinate on an acquisition as MBND has been doing with MDTV. Up until earlier this year, one could point to the unsettled balance sheet issues as the reason. But since the new facility has been put in place, there are no more excuses. All due diligence should have been completed many months ago.
    Either Mandel is hoping that he can renegotiate an even better deal by waiting or he is simply incompetent.
    I certainly hope the former, but does he realize how lame he sounded on the conf. call when he claimed no benefit in "racing to finish it." Investors do not like uncertainty and there has been one spate of uncertainty after another for the past 5-7 years. This is the final issue for now and investors will continue to punish MBND's stock until this is settled.

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    • Only thing positive I can say for the MDTV buyout is...the MDU segment of MBND was the fastest and most profitable they had this past quarter. Seems the MDU market is the future towards higher profits/share for MBND.

    • The problem is bad math. MBND is offering ~$12M cash plus the assumption of ~$30M of net liabilities (including $27M of debt) for MDTV. This an enterprise value of $42M for MDTV. MBND's EV is only ~$60M even though MBND's revenues are 12x MDTV's. Both companies are barely cash flow positive.
      So when you add it up - MBND is proposing to increase their share count by 20%, and increase their (already high) debt by 73%, in order to increase their revenues by 8% and maybe/maybe not get any additional cash flows from the combination.

      Such a deal!

      Sentiment: Hold

      • 2 Replies to telcotales
      • They're not paying $12m in could potentially be $12m in stock if MBND's share price goes over $4.
        "The $12.9 million purchase price be amended to a convertible, redeemable, three year, cumulative preferred stock instrument which converts to common stock under certain conditions at $4.00 per common stock share once the underlying common stock is trading at a minimum of $4.00 per share."

        But I agree they should just nix the acquisition and just buy the subs they want directly from MDTV.

        Sentiment: Strong Buy

      • Correction; at this time, MBND is offering $12.9M cash instead of the 4.3M shares. The total comes to ~$43M including assumed liabilities.

    • Same thinking here......the company making the acquisition does their DD BEFORE the merger announcement is made. It's as if MBND has an amatuer (Mandel) negotiate the deal and then down the road when MBND board members, large shareholders, etc. realize what a poor deal has been agreed on they then demand to renegotiate it. As far as MDTV think that they are now on their 3rd or 4th downward renegotiation.

    • He did the same thing with WPCS before finally opting not to buy the whole company and just bought a piece...and good thing too because that company went in the toilet. He should be slow playing it with MDTV. That company can't survive without additional funding or a merger. That's written straight in their 10Q. In my opinion, they should just buy the subs they want from MDTV. Even if it costs them more on a per subscriber basis, it's better than absorbing the entire company.

      Sentiment: Strong Buy