AGO has more PR exposure than MBIA and of that exposure MBIA carries more PREPA. There are differences in the different classes of debt and AGO has more non-PREPA debt so I can't say I'm shocked that they are moving down more than MBIA as PREPA isn't reliant on tax revenues, it relies on utility revenues.
The decision to not pass the VAT (or GST) theoretically means the PR debt has more risk today than it did yesterday. Bond prices certainly are moving in a fashion that indicates this. Now is moving to a 10.7% yield from 10.3% huge? Most MUNI people would say yes but honestly I can't get worked up about it.
Now not passing the VAT. That I can get worked up about. I think that it is bad for everyone but maybe it makes it easier to increase utility rates?
In the end it becomes a great big muddle but the price already incorporates significant write-downs on PR. I think it is a given that MBIA takes a hit in the quarter coming up on the financials. As headlines move stocks, rather than fundamentals, I can't say the share price doesn't go down but as I said, the share price assumes significant write-downs so maybe the share price doesn't get impacted.
PR assembly voted down proposed VAT. Increases risk of non-PREPA debt. Suppose that is the reason AGO is taking a bigger hit.
Thought it was interesting that it happened in Puerto Rico in 2006 too.
At that time they increased the sales tax rate. Now it is the VAT.
Your guess is as good as mine. I'm sure it varies a great deal from product to product with some losing money and others probably as high as 15-20%
Believe that was my alternative # 2. They simply do not earn enough margin to matter.
Verizon uses Aviat (AVNW) and they are winding down their expansion as it is largely complete so that one is out too.
Guess the big "pump" is on.
Yea that John Lawlor has been right about so many things. IR people are the best sources for information, don't bother with those regulatory filings.
How is this for three alternative scenarios.
1) France does not allow layoffs. Finland does. They keep ALU product line and jettison DRWI and Nokia personnel. Not that it would really hurt DRWI as they aren't getting any margin.
2) Nokia bites the bullet and lays off a bunch of ALU personnel. Tells DRWI they have the business provided they keep margins where they are at. DRWI essentially gets nothing but sales (no margin).
3) Nokia kind of loses control during integration and DRWI gets additional margin. This is the best case scenario.
20-F was filed today.
They got their debt waiver as expected. Hadn't expected a problem but it is one less thing to be immediately worried about. There are some twists and turns in the calculations but they increased their working capital availability by a material amount which should relieve pressure.
Closed their office in Venezuela and Argentina, or I sure thought they had locations there. They may have just shrank them to the point where they were no longer material. Slovakia lease expires in September 2015. That is good too as they no longer need the space.
Head of North American Sales makes more than CEO. If he earned that this year, it sure doesn't jump out at me.
Pretty dull filing aside from the debt changes.
There are momentum arguments for being short. Negative news cycles do drive shares below fair value plus if one wanted to bet against Puerto Rico I can't think of another way of doing it.
Doesn't mean I think being short is a good probability based bet but not everyone is carefully weighing odds.
Saw the Youtube video but that is it. Tend to not believe it when companies say they have better technology. Just about everyone says that.
Even if it is better I don't think the market is willing to pay a substantial premium for the very best and price makes a big difference. As CRNT has lower costs than their competitors (I think anyway) they could theoretically do better and survive a long shakeout but they have made such horrible credit decisions over the last two years that it gets hard to evaluate. Even if a few companies go belly-up and the others combine it might just turn out like all the Wimax equipment providers with everyone ultimately losing money.
Very hard to evaluate. I still own a good chunk of shares but that Venezuela loss bothered me because it did strike me as very poor management. The old CFO is gone though; maybe it was his fault.
Basically, DRWI didn't know what they were buying. They made some very basic rookie mistakes and if you go back to the time of the acquisition and some of the things I said about Italy and the acquisition, you'd know why I'm a bit arrogant here.
Too bad I didn't do what Greedy did and stay short. I settled for pennies because of fear of another bubble.
and you're a rude person who hasn't spent much time reading their financials.
You ignored the rebate of $13.8 million.
You ignored the fact that they booked a large gain of $19 million upon the purchase and then, oops, write virtually all of it down in the same year so all your posting about intangible assets and earnouts is dated garbage.
I'm not perfect, I get things wrong all the time but you are way off base.
Hate to be a jerk but you are way off on the purchase of the NSN assets. They ultimately paid $12 million for around $22 million in tangible assets. Using the same methodology to value Dragonwave results in a value of around 16 cents a share.
I'd buy at 30 cents knowing what I know today in the hope that they would have the good sense to sell-out.
Until the 20-F is filed I'm not sure what we would discuss.
Share price has sure improved relative to DRWI and AVNW.
Still no word on the debt covenant waiver.
Currency changes have been going against them but tend to think AVNW is going to get hurt worse due to their Nigeria exposure.
If DRWI can drop into 30 cent range maybe CRNT could do an acquisition. Suppose AVNW could too. Fewer competitors might help pricing but still hard to pull off.
Should add that there is an extended legal process associated with raising rates. Even if they ultimately announce a deal to increase rates it will be six months or more before rates actually increase (excluding fuel price adjustments).
It isn't awful or good news. It is neutral.
Maybe the share price will decline, I don't know but I do know I sure wouldn't sell given the discounts currently embedded in the share price.