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Solta Medical, Inc Message Board

  • hageneriksson hageneriksson Nov 11, 2013 6:44 PM Flag

    not sure if Piper will be able to identify any "strategic alternatives"

    here are some lowlights of the conference call:

    - 75% of the original North American salesforce is gone
    - in breach of credit covenants with current bank lender - will pay back this credit line
    - new $40 mln credit line is currently arranged with conditions completely unknown but given the company's results clearly will be painful
    - workforce reductions across the board - analysts seemed skeptical if the reduced organization will still be able to support the sales force adequately
    - implemented aggressive turnaround plan but clearly analysts were doubting the company's ability to execute on it on the call
    - still no permanent CEO in sight
    - with regards to Piper looking for "strategic alternatives" the CEO made clear that he still thinks that executing on its business plan will be the best way for the company to go

    Bottom line:

    Nothing short but a disaster. The company faces serious challenges to even stay afloat much longer - another year with decreasing sales might already be the end here.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • covered the rest below $1.90 - stock almost back to unchanged - should go red after investors learned abot the new financing terms

    • BK with 27m in debt? any decent ceo can turn this one around rather easily. at most they pay 2 to 3 m a year towards debt, how does this equate to default in your mind?

    • Classic negative perma-short....IGNORE!

      • 2 Replies to moosestash69
      • he is positing because he is a bit anxious about his short. Look, company is not going BK, with revenues and cuts that's a given. Vaser did 4m which is poor. companies also don't hope and "wait" for another company to go BK, the sector is quickly consolidating. this guy is a short term short, so he has an agenda of "short and distort" notice he wont answer me on exactly how they will go bk with at most paying 3M a year towards debt. they arent in breach of their loan either. its called leverage for an acquisition and were likely advised by PJ to engage it. company is not in as bad as shape as this guy would have you believe.

      • not perma - shorted into the strategic initiatives hype in after hours and already covered a good chunk at $1.95 for a nice 10% gain within a few hours. Still holding some short for tomorrow just to watch this go red shortly after the session started on negative analyst comments.

    • I'm not sure it is all that bad:

      - 75% of the original North American salesforce is gone: It was fat to begin with. They should figure out how to integrate the sales force.

      - in breach of credit covenants with current bank lender - will pay back this credit line: Not great, but still not bad.

      - new $40 mln credit line is currently arranged with conditions completely unknown but given the company's results clearly will be painful: At least interest rates and terms are still tolerable. Much better than getting a bridge to more equity.

      - workforce reductions across the board - analysts seemed skeptical if the reduced organization will still be able to support the sales force adequately: See the first response. Company is fat - trim it!

      - implemented aggressive turnaround plan but clearly analysts were doubting the company's ability to execute on it on the call: We shouldn't doubt, it's just a matter of degree how well it will work out. Probably will be alright.

      - still no permanent CEO in sight: Good. An acquirer won't want one.

      - with regards to Piper looking for "strategic alternatives" the CEO made clear that he still thinks that executing on its business plan will be the best way for the company to go: It's the right thing to say. Would you rather have him say "were screwed, things are so bad you'll get us cheaper later!" No, make it seem as though things might get much better, so buyers should line up now, while it still is cheap.

      Sentiment: Buy

    • All righty Mr Negative. The bad quarter will be further evidence for Voce/Callan/Matusow to put pressure on them to sell. They seem more receptive to it now at the very least. Worst case scenario seems like it could go down to 1.50. The activists know they have some great products, which they cannot lever. In better hands with deeper pockets, those assets will be worth much more. I'm certainly wondering what ZLTQ has in mind with their sale of all that stock.

      • 1 Reply to lexus4sc1993
      • actually the worst case scenario is for them to end up in bankruptcy - they will soon have $40 mln in high interest debt which puts the enterprise value at $200 mln at after hours prices - actually the business is in severe decline with a much needed 180 degree turn highly unlikely. Zeltiq doesn't need their products - they just took the best sales reps already and look what happened...

        any competitor looking to acquire their products would be well served to buy them on the cheap out of bankruptcy as early as next year instead of paying more than $200 mln for a completely rotten company.

    • again all reasons for a buyout or perhaps merger thanks for pointing that out. kicking myself for not buying more

 
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