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Velti Halka Acık Limited Şirket Message Board

  • betasplen1 betasplen1 Aug 27, 2013 12:47 PM Flag

    Near term catalysts

    1) Stepping down of Moukas. The board will probably not fire him but strongly encourage him to step down. It is also good for his personal holdings of 5% of the company to see it recover after the 'black sheep' is removed.
    2) Sale of Mobclix through Deloitte's help. If they get even half of what they paid ($25M), they will have $50M in cash - plenty enough to see them through to profitability in 2014.
    3) Buy out offers by the likes of MM, FB or GOOG. It's selling for less than a R&D start-up and has very valuable IP and customers.
    4) Potential short squeeze on news or positive momentum from technical recovery. RSI is below 20.

    I can't think of any near term risks as I explained before. BK is not possible with the current financials, support from their main lender, HSBC and 50M shares at their disposable for another secondary in the future, if needed. Obviously, they don't want to dilute again and hence are trying to get rid of the cash drain and legal issues connected with Mobclix and raise more cash at the same time. If the mobile ad business itself is all hype and no substance (low but finite probability), then yes - they will go bankrupt in 2014 as they can't keep having quarters like 2Q13 in perpetuity. I don't dream of $7-8 in 2014 anymore (Mobclix issue was worse than I thought) but $3 is achievable with a leaner business model.

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    • As I already explained to you. Bankruptcy is quite possible. They grew payables 15 million dollars last quarter which is why their cash burn was less than it would have been. They burned 11 million in free cash flow despite a once off ballooning of payables that had the obvious effect of destroying their mobclix business.

      Over 6 months they burned 50 million and would have been 65 million without the payables sleight of hand.

      So now we have a company that burned what would have been 26 million last quarter who for practical purposes has no mobclix business and numerous lawsuits to defend. My prediction is they run out of cash in the very near term. I would say 4 months + or - 1 month.

      Why do you suppose they would have sabatoged a business they paid 50 million dollars for if they had any other choice and were not already on the brink of insolvency?

      • 1 Reply to stljoe14
      • "Why do you suppose they would have sabatoged a business they paid 50 million dollars for if they had any other choice and were not already on the brink of insolvency?"

        They were not sure if they will get more money from HSBC (or even if they will call it in since they broke covenants) and they were down to $19M last quarter with the $15M deferred. Publishers are not on their payroll and they were not legally bound to pay them on schedule as salaried employees. Now with the proposed sale, that liability will be off the books and they will get cash as well for the business. From all the sites I have been on the web, there is no law that states you can't sell a business that has pending lawsuits. It just needs to be highlighted in the contract and the buyer is willing to assume the risk. In this case, the lawsuits will be thrown out as soon as the buyer pays them. The business is easily worth $50M net. Take out the $15M in lawsuits and another $10M due to VELT's not-so-favorable leverage position, and they can still get $25M in cash and extricate themselves from the cash drain and lawsuits. As for the lawsuits on behalf of the shareholders, I have seen a dime a dozen. Haven't seen any settled for even pennies on the dollar except for outright fraud.

    • BK is not possible with the current financials,

      Wow such a strong statement to suck more fools to average down?

      Ed is wanting to mortagage his house to buy here.

      You are worse than bull investor, he was a pumping mor0n but you my friend are dangerous.

    • Again, Federal Court won't allow any sale of assets - not with shareholder lawsuits pending.