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Velti Halka Acık Limited Şirket Message Board

  • drhea606 drhea606 Mar 14, 2013 9:19 AM Flag

    bankrupcy or take over

    Im fine with waiting for 2 qtrs so they can turn this around!!???? I'm just not sure they can?
    So someone help me out! What is chance of this co folding up? Or should I ask how will investors know if they are? What will the signals be?

    Sentiment: Hold

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    • j.bentley2 Mar 14, 2013 1:49 PM Flag

      Who is going to take over a near bankrupt company?Far better to let it disappear and take over its clients for 0

    • The company has $283M in A/R. All it needs to do is factor some that total to help the cash crunch. It would be insane to do an offering at these levels when it has the assets. Not to mention alot of that cash should be coming in the door soon.

    • I bought Velt at 2.40 but then upon reading CC, I sold them all at 2.32 for a small loss this morning upon reviewing CC, because I felt that the management had no game plan and Velt might have a serious cash flow problem. Yeah, I could have timed it better and sold it at 2.35 or so but I am not complaining. I feel this will drift lower to around 1.50 level and then will take a big jump to maybe 2.0, but then keep on drifting lower until they show they are turning around the bottom line. The sad part of this is I could have bought Velt at around 2.25 but I was making morning coffee, so I missed a good entry point. I admit that I didn't read the CC carefully when I bought the damn thing, but honestly the CC scared me.

    • dr: I'm not sure they can either, which is why I'm now selling out my entire holding of 29,540 units with a loss of over $100,000, which is a devastating blow for me, and a bitter lesson in not compromising diversification rules, even when you're darn sure the company is going to make money.

      What are their chances of folding? Well, if they can sell enough shares and/or borrow enough to make their milestone payments to CASEE and MIG (due NOW or SOON), I suppose they can try to sell mGage for another 1/4 or 2. Right now, they owe HSBC over $50m, which is going to take care of any "FCF" they might generate for quite a while, now isn't it?

      To my ears, Ross and even Moukas sounded like they could not quite believe what was happening.

      Good luck. I've established an arbitrary fire-sale price of $2.40, but I've only managed to sell about 1/2 of the holding so far. If they really turn mGage sales around, I can always buy back in when they've diluted it below 2.

      • 4 Replies to pjmyers_tsi
      • U will feel sorry for the decision u made

        Buy back now

        Sentiment: Strong Buy

      • j.bentley2 Mar 14, 2013 1:47 PM Flag

        I lost a packet too. Their accounts have been a total mess. Not so long ago their results had to be seriously corrected aftter publication.The method of payment they congratulate themselves on is a route to the bakruptcy that now yawns and they still do nothing about it. The reason people buy the stock is that no-one can believe that management can be as incompetent as Velti's to wreck a business in such an industry hot spot. Plus their endlessly optimistic little turd of a CEO only ever falsely tells people all is well. What about the $25m deal a few months ago that's now looking sour?
        That doubled the stock price at the time to $9 and look where it is now. Moukas should be locked up and the key thrown away. He has cost investors hundreds of $million with his stupidity.

      • pjm, I feel your loss. I understand that the near term cash crunch is something they need to address before we can start talking about double digit valuations next year. After fully drawing down their HSBC LOC, they had $56M as of Dec 31. After paying $6M for retention bonuses, they had $50M end of Jan. They have a $30M obligation to MIG which they could pay from what they borrowed from HSBC, leaving them $20M to get thru till 4Q13 (when they predict they will turn FCF positive). The $5M for CASEE is not due till 2014 when they are rolling in dough. So they have $20M to work with for the rest of the year. They predict EBITDA to be negative $16M (mid-range) for 1Q13. 2Q will be better but they don't know yet. So, yes - they are in a bind and most likely will have to do a secondary to raise another $15-20M to take them through the next 2 quarters. I don't think they manage wby just cutting costs. Thy will have to price around $2 to get enough demand. They also need to get a waiver from HSBC since they broke some covenants in terms of EBITDA. That is the bigger Gorilla to appease right now but they are confident they will get that. The $40M in FCF they predict in 2014 is net of interest payments on their long term debt (or that's how it is usually calculated). So, that won't eat into their FCF forecasts.
        So, near term we could test the high $1s on the cash uncertainty. The dilution will increase share count to 75M or so. If they grow 30% over 2013, they will earn about $35M in 2014 or 45-50 cents. Let's be conservative and say they get a PEG of 0.8 at that time. A PE of 24 will give the company a valuation of $12/share, with the dilution factored in. Either way, the downside is 15% (provided they get the waiver and can price the secondary around $2) while the upside is 500% in 1 year. But you have time to buy as this will be range bound for 3-6 months.

      • thnx pj , sorry this thing went south on u! it is turnning in to a tough lesson for me but i wasnt as ivested so ill count my blessings lick my wounds and move on! hopefully with lesson learned! best of luck

    • Did you not listen to the conference call? Or read the transcript? There is no worry of bankruptcy here. Now remove your tin foil hat and get back to work!

      Sentiment: Buy

    • go #$%$ yr =self

      Sentiment: Strong Buy