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KIT digital, Inc. Message Board

  • johnmr12 johnmr12 Mar 15, 2012 3:30 PM Flag

    The reason for the drop

    Wall street is more interested in INCOME EPS than cash based EPS. The reason why the company kept emphasizing CASH BASED EPS is because the expected INCOME EPS was .15, and it came in at .05. That supports siempre's negative view for now, and thats why it dropped like a rock. They didn't even come close to wall street's expectations. I'm also a little concerned that they only offer guidance for CASH BASED EPS for 2012 and not INCOME EPS. Saying you are going to have $1.40 a share in CASH BASED EPS this year sounds nice, but there is no way to determine what that will equate to in terms of INCOME EPS. If management doesn't know how to make a profit, they can generate as much cash as Apple does, but if their costs to generate that pile of cash are just as enormous, it does nothing to increase shareholder value. Having said that, if revenues continue to grow at a large amount quarter over quarter, they will become attractive as a buyout candidate for a company that knows how to convert revenue to bottom line income.

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    • Reason for drop is effort to cover positions by shorts. They coordinated threw 500k pcs on the market for low price, just after some longs set relatively high stop-loss. That caused auto-sale followed by panic-sale of those who did not know what is happening and did not research this company enough.

      That is also reason why stock rebound to 9USD soon after - after panic faded out. However, confidence and trust of some longs have been shaken, and therefore many of them did not return to position or sold later between 8.90 to 8.40$.

      What comes next? There might be slow return of confidence and steady slow increase of price. But shorts have not covered those 21+ mio shares yet. They only managed to cover some 3mio shares. Still a lot to buy back for them, therefore there will be increased activity of bashers on this forum, as well as very negative articles on the internet. Also some repeated panic sale attempt may occur. Most of short arguments will keep targeting either missing cash flow (secondary KPI), or profit per share.
      But what is important is trend, and profit is improving no matter how much companies (customers) cut their spending on internet services, which is positive.
      We can read it this way, company did not make a superb results, but made just fairly good result.

    • One of the more reasoned posts I've seen on this board.

      To further increase your understanding I suggest "the essays of w. buffet" as a starting point.

      I've personally been preparing corporate books, tax returns, and analyzing potential investments for nearly 20 years. Most folks have absolutely no idea what they r talking about.

    • Yea we can see that maybe that's the real focus for Kaleil

      "Kaleil: It's official! CSCO buys NDS for $5bn (~4x+ revs). Congrats to Abe, Dave and the team!"

      4x KITD revs $320 million and $330 million put us at $1.28 - 1.32 billion

      Call it 50 million shares after he dilutes us again from "small acq" = pps buyout figure $26.4 per share.

      I'd settle for that...but I still wanted more.