They face a big loss because of Consolidation cost with their acquisition. They expect 2 -3quarters of lossbefore the turn around. The pvt Hedge Funds who may have an inside track have been short since the aquisition. I expect it to stabilize around $12 or os. Most small -Meduim Cos see a low near 1/3rd the high.for that year.
Patience will be rewarded but timing is important when it come to small fry.
They overpaid for their new aquistion. The seller did not disclose that his principal Buyer was opting out of buying any product in the next Q. In brief, on a Price to Sales ratio, it was an overextended acquisition.
They are in the process of offering better terms to that Buyer in order to get him on board. The results are still awaited but if it comes, it will be at a discounted price. That will affect earnings marginally.
I would be buyer after they announce the results of their pow wow.
The net Assets w/o Intangibles is about $0.75bn while the Liabilities are over $1.0bn. Because of this the NAV w/o intangibles (No one can value) is -ve.
Hence theco is being heavily shorted by those who understand value.
No hurry; don't worry. I am in the same boat waiting for the Hedge Fund letter to their Pvt clients advising them to cover.
More room to run.!
No not quite.
Look at LCI before the acquisition. It had little debt ,, a good product portfolio and had a great price. It then made a paid by debt acquisition of a Co. with little cash flow. The street feels it overpaid. The result is that the NAV is now _-ve with no official sign when it will become +ve. The Investment world feels it overpaid The slide represents that overpayment as estimated by the street,
I still think LCI will rise from the ashes but I suspect there will be more pain in the days to come.
Good luck nevertheless.
True; check out the local bar where they have their quarterly lunch sessions after their quarterly meetings with Analysts.
lonbut: You have it right. Interest rates are expected to climb and Cos with debt will see their P/b drop.
There is no Book value if the Intangibles are discounted .Hence the slide.
My FA says its best to stay on side lines Creditors and shareholders might strip the Co bare in the coming months. The NAV is near -ve and the Creditors want an independent audit by an outside firm to determine the NAV.
I am now resigned to the fact we were taken for a greed ride.
Check with the Pvt Hedge Funds list to clients for May 2016. There is no mention of any support above $15,
IBN is facing the biggest NPA default in its history. The March Q could see another spike to 5% default by Corporations.
All these big loans to Corporations have proved a disaster. Time to get rid of the senior Mgmt.
The EV calc is based on assuming that the Goodwill LCI paid is bonafide and justifiable. The street believes this is not the case.The bought out Co. had its own EV and cash flow prior take over and they were very much lower than what it is now.
I do not know wahat the discounted acceptable value is.
REmodulin sales have leveled off and can only spike up if they can get Medtronis pump approval by end Oct.
Meanwhile sales will be flat and that's why PVT Hedge Funds are short.
Don't confuse stating facts with bashing. Check my posts about the losses; there are more to come.
The CEO was sucked into the new Govt hype and GNP growth and promise of awards.It is exaggerated due to mortgage cost of distorted house prices.
She needs to be replaced.
They now need to issue fresh scrip to maintain their Capital ratio which is down by 5%. They would prefer to do it thru a convertible bond which means existing shareholders could be affected. The market senses that.
The CEO may need to be changed as they are in bed with the Govt and their cronies.. IBN was a good Bank gone sour playing Yes Sir with the Authorities.
The art of shorting by Hedge Funds is based on sophisticated probability distribution and not inside info. That is why the Technical analysis are important when you are unable to discern rational logic.