When managment mentioned they were in the process of arranging a credit facility
the payments are being delayed for a year, but the money is coming in, and the risk of default is nonexisten as you're dealing with billion dollar companies. You act like they aren't getting paid. Might want to ponder this.
I'm acting like they're not getting paid because that is exactly what's happening; they're not getting paid. Why the LOC? to cover CAPEX and operating expenses because the A/Rs are not being paid and TSTC can't force them to pay.
They are currently collecting the payments from last years 70 million in revenue, but this year you're talking 120 million plus in Rev. The need for working capital for companies with year after year after year of explosive growth is quite common. And I can buy this for 3 friggin time earnings if one backs out the working capital, or under 5 times if one ignores the working capital per share. Growth at 10-15% with a pe of 5 would be obsenely low. This bloody things been growing at 50%. That's why I own it. Yap about AR all you want, it'll be converted to 10's of millions of cash a year hence.