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American Italian Pasta Co. Message Board

  • jeffreylee02 jeffreylee02 Mar 20, 2006 5:48 PM Flag

    A lesson in lending...

    Some of you are so na�ve. For the banks to lend this Co. $300M before the release of #s means that they already know the #s. To make this kind of loan, the banks are convinced that EBITDA is in excess of 50M, probably $60-65M. Lesson #1: Do not mix cash flow with EBITDA. They are in a restructuring mode. Their cash flow will be affected by this. Let�s have some fun. Assume $65M and an 8 multiple reduced by the debt. I get $14 / share. What will you shorts do now?

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    • I hope you are right. but this pasta maker never had such good EBIDTA margin atleast in past

    • We laugh as they decale bankruptcy.

    • let's assume EBITDA of zero and then you get a stock price of zero. . .let's assume EBITDA of negative $15M, you also end up with a stock price of zero. . .any IDIOT can pull a number for EBITDA out of their ass and then attach and equally meaningless multiple on it to come up with stock price target that is completely without merit

      final lesson: the banks did not lend AIPC another $300 million, they merely extended the payment period by 5 years and tacked on 150 bp of financing. . .BofA's only alternative, was to force default and then take-over AIPC and immediately liquidate their assets - why not take all or most of the EBITDA this company can produce and any free cash (see 8K for documentation of this fact)

      all you bozos selectively pick items that support your very weak long argument and then ignore the 10 other facts that point to stock that is likely going much, much lower

      this company is fast approaching the one year mark in which they last reported financials (unfortunately, those numbers were falsified along with at least 3 other years financials)

      as a short, i feel very confident and my brokerage account is nice and fat after the past 9 months thanks to PLB

    • Good post.But your 65 million is probably on the high side.I agree with your opinion that the nagatve cash flow in the the last 3 months does not mean that they lost money,and cash flow should not be confused with earnings or losses,especially when the company is in a restructuring mode.When the company comes out with earnings,and the confirmation of ebitda in excess of 55 million will cause a panic among the short sellers,and will give Herb Greenberg alot of eggs on his face.Btw,he has been wrong numerous times.Thanks for the good post,at least we have an objective post


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