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Dolby Laboratories, Inc. Message Board

cdti17 4 posts  |  Last Activity: Oct 11, 2014 11:22 AM Member since: Jan 16, 2013
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  • Reply to

    The Cyclone

    by cdti17 Oct 11, 2014 11:06 AM
    cdti17 cdti17 Oct 11, 2014 11:22 AM Flag

    Fair point. The cost and price point would make it prohibitive for the carshare program, so leasing and sales would be the only viable options. Presumably Geely has the requisite expertise to market and sell the vehicle.

    I think the decision to sell this vehicle supports Geely's commitment to the JV and company. Moreover, there is no way that Geely would be associated with a "fraud". That assertion seems silly to me.

  • cdti17 by cdti17 Oct 11, 2014 11:06 AM Flag

    Does anyone have a grasp of the business model for the Cyclone model (the car, not the motorcycle just to be clear)? My guess is that it's not going to be a part of the carshare service and will be sold directly to consumers, but would love to get any clarification on that.

    The Cyclone model looks good to me. I think many US bears fail to realize that big sedans aren't really viable in many other parts of the world. Just look at Europe as an example where consumers typically opt for smaller cars due to fuel efficiency, convenience (easier to park) and other reasons. So while the carshare models are small, they fill a growing need for convenient transportation in my view.

    I live in Austin and Car2Go uses similar cars as the Kandi carshare. The service gets generally very favorable reviews. In countries like China and India, I can see it being even more popular given the urban density is much higher and culturally, they aren't accustomed to bigger cars.

  • Reply to

    Analyst Coverage?

    by nytonc1979 Oct 11, 2014 10:28 AM
    cdti17 cdti17 Oct 11, 2014 10:59 AM Flag

    For companies this size, if you aren't going to help a bank derive revenue from capital raises or M&A, it's difficult to justify covering the stock. Trading revenue just isn't enough anymore. So it's actually quite easy to understand why they don't have coverage.

    That said, they did file the shelf so it would have been nice if they had engaged with a US bank to do the equity raise. I can only surmise that the company, due to its rapid growth, felt that doing the private placement was the most expeditious way to raise capital. Doing an equity offering in the US would have entailed a roadshow, which is costly in terms of dollars and time spent. It would have been worth the effort in my view, but they obviously chose not to.

    Analyst coverage would certainly help as the investor relations department seems non-existent other than the occasional PR. The challenge is that the accounting is complex (not saying that in a negative way, just raising a point), so it will take some effort to model the company as you'll have to spend a lot of time just on the JV. I think the plan should be to ultimately raise capital at the JV level and spin that off into a separate entity. That will help increase the transparency and the valuation all else equal.

    Sentiment: Buy

  • cdti17 cdti17 Aug 7, 2014 7:39 AM Flag

    Stock is trading at 5x 2015 bookings (better metric than revenue as it's the cash revenue coming into the business). That's assuming 40% bookings growth, which should be easily doable given the strength in the market, new products (like the firewall and IPS) and the sales force maturing. CSCO paid ~7.5x for Sourcefire, which was growing closer to 25-30% at the time of acquisition. At 8x 2015 bookings, FIRE would be valued at $47. At 10x, it would be $58.

    I think institutional investors would like to see the senior execs step up and buy some stock at these levels. That would be a great catalyst for the stock.

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