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Velti Halka Acık Limited Şirket Message Board

  • betasplen1 betasplen1 Aug 25, 2013 9:25 AM Flag


    For those crying imminent bankruptcy, here's a simple explanation on why that is all hogwash, malarkey, BS or whatever you would want to call it.

    Cash position on Jun 30 was $19.394M. HSBC extended $7.5M in July and so the total cash position is $26.894M or about 30 cents/share. Cash used in operating activities was $7.293M last quarter. That means they have about 3.7 quarters of cash left, even if nothing improves over the next 3 quarters and if they can't sell Mobclix for even a penny. But, as we all know, the 2nd half of the year is always much better than the first in terms of revenues and management said so as well, although withdrawing guidance. Analysts are still expecting a profit of 7 cents in 4Q13 despite the gloom and doom.

    So we have the stock trading at a nickle above the cash they have. They have enough cash to last another 3 quarters at least (even if no improvement in financials and no sale of Mobclix). HSBC has shown confidence in their turn around efforts by extending another $7.5M last month. Revenue, cash flow metrics are only going to improve going forward. There is also the chance for an opportunistic buyout by a competitor. And finally, there is that huge short position that needs to unwind. I see $1-2 by Jan 2014 (Jan effect) and $3-4 by Dec 2014 as the huge cost cuts and the new business model takes this back to a lean mean profitable machine in a high growth market. My earlier target was $7-8 and so that is a 50% cut. My new average is 53 cents (55% lower than earlier) and I still expect a 6-7 bagger for myself in a year. Now back to the regular programming. Bash away :). I shall check back in a few weeks...

    Sentiment: Buy

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    • If they ain't BK by December - tax loss sales will make them $.01.

    • Good thoughts - however, you are taking at face value what obviously is looking like "cooked books". Who knows how much revenue is actually there? Who knows if they will ever collect on their A/R? Defending lawsuits takes cash - so does paying liabilities. If they have a creditor that wants paid where does that cash come from?

      Here's how a scam like this works: You start a company that has a little "real" revenue, as it moves forward you start ficticious companies that "buy" your product, you claim an enourmous amount of growth based on your ficticious revenue, then, when you think you can get away with it, you write down $100M in "uncollectable" receivables and walk away with your shareholder's cash in your pocket.

      Sure - the SEC investigates - who are they to find out anything about foreign corporations whose veils can't be pierced?

      You're being too trusting with a situation that doesn't deserve it.

    • They burned 11 million in FCF last quarter but to accomplish that their payables ballooned by 15 million. Much of this is probably related to their decision to not pay mobclix developers a decision that likely can't be repeated next quarter because they have left in droves. There is simply nobody left to not pay. Over the last 6 months the company burned 50 million dollars in FCF. Had they not stretched out their payables last quarter they would have burned 26 million dollars last quarter alone way more than enough to but them in BK court based on their current cash position. Had it not been for a capital raise they would likely be there today.

      As of today their working capital is negative and that includes a massive block of receivables at least some of which may not be collectible.

      Of course all of this assumes steady state operations and it is a good assumption that mobclix will have further deterioration in the current quarter.

      This was not a penny stock. It was a big IPO and is followed by Wall Street. think it is safe to say the stock wouldn't be at .35 and falling like a rock if the outlook was for anything but disaster. Personally I think they run out of cash within 4 months but time will tell.

      • 2 Replies to stljoe14
      • You are including $7.6 million of acquisition-related payments associated with MIG. It is called a one-off item. Excluding that, FCF was -3.3M. What's next? That they lost $130M last quarter (without stating that $111M of it was a write down)? Please state all the facts versus selective snippets. But again I know your agendas. At least edgar is open about his short position, like I am with my long position.

      • Id like to say Beta has a rosy synopsis where BK isnt even in the cards (which it is, and he may learn the hard way cuz hes clearly emotionally tied to this stock) but yours is a more REALIST view. id tend to prescribe that Beta isnt accounting for a lot of unforseen things and the Mobclix sale will result in ZERO dollars since all the developers left not to mention lawsuits

    • Smart posting
      And just for the record SChwab is having trouble finding shares to lend out
      And current shorts are paying over 12% to hold the 18 plus million shorts shares