The upside potential here blows away the downside risk. The upside is $15 if they get the contracts they have been hiring for.
Looks like it has stabilized after some back fill. So why stay short when more new contracts can annihilate your net worth?
I agree that the current depressed stock price is due to a lack of trust of management. Some of this is due to the recent losses, some due to how long it has taken for the new product to take off, and and as much as I hate to say this, some has to do with the company being Pakistani. All this will go away with continued new contracts for the Ascent product. The recent contract was probably as big as can be expected. They will need a lot of smaller contracts to get to the level of earnings that will push this stock into the teens. The company is hiring like the contracts are coming. It takes time for companies to try out new software like this. We are now reaching the period where the tryouts should be winding down and they will get a thumbs up or thumbs down. If the contracts are there the potential is there for $15 within 12-18 months. I say $15 because that's only a little above where the stock reached with just the old product. I don't understand why you would want to be short when the upside risk is THAT high.
By my calculation, the increased margin on the 20% increase in sales adds $5 million to earnings quarterly assuming no increase in SG&A. That gets HTCH to cash flow positive after adding back depreciation.
He and the CEO put MEA into a death spiral by agreeing to unlimited shares to the debt holders based on stock price. The more the stock drops the more shares they get and the more diluted we get.
Lawsuits rarely succeed. But you hit on why ANGI is valuable. It's all those contractors paying hundreds of millions to advertise on the website. A big and growing list.
ANGI just announced significant new jobs at its Indianapolis HQ. At first blush this appears to be a negative, ANGI needs to cut sales and marketing costs. A closer look shows that this is in response to local government incentives. The jobs don't start until next year and are added gradually over several years. Probably nothing more than ANGI was already planning. The only difference is they will now add the jobs in Indy instead of elsewhere.
Constant losses and limited liquidity mean they have to do something different. Fortunately, the cash flow stream from their advertisers before a maintenance level of advertising is quite high. This gives them the flexibility to either sell the company for substantially more than it is trading for now, or convert to a free model. Of the two, converting to a free model is more appealing. Yelp, a similar business with similar revenues has 10 times the market value as ANGI. The market has spoken, the free model is much more valuable. Converting to a free model will allow the company to cut sales and marketing costs considerably allowing it to be profitable and growing. It would be simple to do. What are they waiting for?
Earnings were quite strong, partially driven by lower SG&A expenses. If you adjust to the SG&A level of the first 3 quarters, earnings would be $0.14 instead of the $0.17 they reported. Still much better than they have done lately.
It was buried well into the call but they did say. There was a $1.3 million favorable legal settlement. After tax that's $0.03 per share so my adjusted $0.14 looks accurate.
Revenues were up a little but they really cut back on expenses. Expenses are still up from last year but down from last quarter. They announced two smaller new deals. Looks like they are back on solid footing. However the big cut back in expenses indicates a little less optimism from management.
Which is why the analysts are not changing their forecasts. They will need to see contracts announced with the phone makers first.
Ford said they will lose a billion in SA this year, but that indicates an improvement from the $800 million lost in the first half. The recall is just a one quarter issue. So what caused the sell off?