Well, we know that they cancelled participation in investor conferences, they completed a risky acquisition, drew down on their credit line, have a history of failure and bad decisions and worst of all have not bothered to tell investors what the debt covenants are or even what the interest rate is despite having a very highly paid investor relations person on staff.
If anyone wants to panic, I'd say now is a pretty good time.
I can think of a couple of positives but as there are folks here posting every possible positive regardless of however remote I'll leave that to others.
Timm, sure is getting deep in here. "Bought another 100K shares might be the #1 shareholder" You are so full of it I'll bet your eyes are brown.......Paullleeezzzeeee, this is not a forum discussing a game of monopoly.
"and is subject to customary covenants."
Covenants are things like earnings on a quarterly or rolling four quarter basis. Banks don't like people gambling with their money so they try to stop it with provisions like that which will allow them to seize the assets before things get too bad. Companies in violation of covenants ask for waivers for violations and if they banks don't grant them they frequently file bankruptcy.
"The new credit facility matures on May 31, 2014 and is secured by first-priority charge on all of the assest of DragonWave and its principal direct and indirect subsidiaries."
What is so hard not to understand? DW defaults on May 31, 2014, everything belongs to the bank.
You aren't acknowledging my point which is that they have not shared the debt covenant information. For all we know they are tough and they get pushed into bankruptcy after next quarter. Acquisitions also have an unfortunate habit of blowing up too.
I'm not saying they are going to be filing in October, just that it is conceivable and it isn't a long odds thing. If you aren't accepting of this possibility you are foolish unless of course you see the financial data in which case I'm pretty sure you wouldn't be posting here.
Oh brotha! Repeat after me, there will be no bankruptcy filing in the near future. If there is one, it will not be before 2014. Let me play the bankruptcy scenario out for you. DW have enough cash and credit for at least 3 more quarters and before their cash is depleted, u guess it, dilution. With dilution, that will give them at least 4 more quarters. If somehow DW is unable to turn around their bussiness after dilution, one more magic bullet before bankruptcy. More dilution and a for sale sign is put up to the highest bidder. At this point, if longs are still around then we deserve to lose all of our money. So please stop with the bankruptcy scenario..
I looked into the sale of shares and their history. They were primarily VC funded and the founders really didn't have a big stake in the company. I was pretty shocked at how small the founders shares were. Sometimes founders stick around because of pride in what they created, here I think there is a good chance they have to work to pay their bills. May be wrong but that is the way it looks.
The information on shareholders when they first went public is on Sedar (page 61 of circular). I don't think the link will work but I'll try.
The insiders first sold big chunks of shares when they issued shares in the US. Go to page 87 of the filing linked to below. Management appears to have sold less than a third (don't feel like pulling out calculator). The VC firm sold all of their shares at that time.
Terrence Mathews owned his shares via the Wesley Clover Corp. He has sold about 90% of his initial shares (some when they sold shares in the US and I'll take your word he sold the rest recently but the latest annual report on Sedar definitely confirms the sales). On balance, the management did not get rich off of Dragonwave. Kind of a shocker actually. The VC (and I think Terrence Mathews is in that group) did get rich.
I'm not sure what would be more disturbing to shareholders. I don't like to see management take advantage of shareholders but here it almost looks like they were "suckers." They appear to have done all the work for pretty close to nothing and made the VCs lots of money. Now that the VCs are all gone it appears as though they might just lose the rest of it. If prospects were good, I would have expected the VCs to buy shares in the open market and certainly Mathews wouldn't have sold.
We'll see but it looks to me like they are in a very bad way. If they do go bankrupt I don't think management will have resources to buy the assets but I'd guess the initial VCs would help.
I don't have time to re-read my post so I hope it makes sense.
Here is the annual amended Form 40-F/A, and pages 40-41 shows that CEO Allen had 455K in stock, CFO 79,000, Former Director Matthews 161K, and everybody else was nil, as of the end of February.
Other records shows that NSN was provided $5.2 million in DragonWave stock as part of the purchase deal.
As for former director Matthews, I don't recall hearing or seeing any information from Canadian Insider or otherwise that he sold off his stock investment.
That would be be me Jop! Bought around 100k today and will continue going forward.... I just might be the new # 1 shareholder! Thanks for all your insight and information. You, GDG and Garth seem to be the smart guys looking forward. Long term investment not a day to day thing. Way oversold.....just my thought! This could have a big upside down the road!
Best, Tim McD.