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InnerWorkings Inc. Message Board

cohsgrad 164 posts  |  Last Activity: 2 hours 32 minutes ago Member since: Feb 27, 2000
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  • cohsgrad cohsgrad 2 hours 32 minutes ago Flag

    Can understand the need for the offering and they might as well bite the bullet.

    What I can't understand is the need to mislead investors with this unit garbage. Just sell the shares at whatever price the market will take without warrants and without any ratchet provisions.

  • Reply to

    Earnings

    by blues_fanatic 11 hours ago

    Need to sell SAL is driven by business needs (high debt) and taxes but mainly taxes. They have a large capital loss carry forward from sale of Albertson's that expires in around four years. If they can sell a unit they can do it basically on a tax-free basis so they could net 35% more. SAL is the most significant gainer in the group and the most marketable so it is the one who has to go to pay down the debt. Suppose they could sell the wholesale and conventional retail but I'm less sure there is a big gain to be triggered plus I can't figure out who would buy it. Still, you are right, it could happen.

  • Reply to

    Earnings

    by blues_fanatic 11 hours ago

    Would agree although Rainbow isn't big enough to offset the TSA. Sales can bump slightly from Rainbow but the big issue is bottom-line loss from TSA.

    I was impressed with SAL. They had to do this or they would have died. Their best hope is to improve SAL and then sell it off to pay down debt. I don't think they can survive without selling SAL for a good price in the next three or four years sometime.

    Wonder if they talked about impact of TSA and future expectations in the call? Decided to not listen to call and wait for transcript.

  • cohsgrad cohsgrad Jul 22, 2014 8:34 AM Flag

    Short interest has gone down a significant amount and it seems reasonable to assume that this played a role in the run-up in price. Whether the remainder will cover I dunno but there are tax incentives to keep the trade open as long as possible.

  • Reply to

    What to do if moved to otc or whatever?

    by sh0rtc0ver Jul 21, 2014 12:30 PM
    cohsgrad cohsgrad Jul 21, 2014 1:08 PM Flag

    I've owned relatively well regarded companies that moved to pink sheets due to failures to comply with SEC filing requirements temporarily. Was surprised at how much liquidity there was and how share price didn't tank.

    Of course, those weren't scam companies and NEWL appears to be a scam company so I'd guess the situation will be worse. Share price can increase but longer term there is just no reason to own it as it doesn't even constitute a lottery ticket as those on the inside would steal all the assets in the off chance things got better operationally.

  • Reply to

    possible buy out

    by bamm160 Jul 18, 2014 5:56 PM
    cohsgrad cohsgrad Jul 18, 2014 6:38 PM Flag

    Not likely.

    I've not read the Safeway disclosures but I expect that part of the reason Albertson's is doing the acquisition is to get the corporate support that will enable them to avoid the cost of the management agreement. Not the biggest driver of the deal but certainly a component.

  • cohsgrad cohsgrad Jul 17, 2014 5:16 PM Flag

    Sure thought Dierberg's went to self-distribution but maybe I'm wrong. Regardless, a problem in the store is not always the same as a problem in the distribution system.

  • cohsgrad by cohsgrad Jul 15, 2014 12:06 PM Flag

    While I am glad to see the market becoming a little bit less irrational, another part of me is disappointed.

  • cohsgrad by cohsgrad Jul 14, 2014 11:50 AM Flag

    I still think it is worth less than $1 a share but I couldn't stand the thought of paying 21% annually plus I decided to redeploy the funds elsewhere.

  • cohsgrad by cohsgrad Jul 11, 2014 11:05 AM Flag

    Read through it last night. Don't remember everything but three points stood out.

    *They have very severe warnings about liquidity that go beyond the normal boilerplate.
    *They are finally committed to paying Nokia back. Around $1 million a quarter. Mixed feelings on that. While they really can't afford it obviously it is better than paying it back in one fell swoop.

    Bankruptcy risk is real in the next three to six months. I think it is less than 50% but not immaterial. If they were shut out of the equity markets the risk would be 50/50 but the truth is that they aren't shut out.

    *EBITDA loss was a little over $5 million with adjusted EBITDA loss of $4.4 million.

    They have the strong margins from USCelullar business but that won't last.

    Still have not read the conference call transcript. Maybe soon.

  • cohsgrad cohsgrad Jul 10, 2014 4:03 PM Flag

    Always my favorite kind of day. Congratulations.

  • Reply to

    GOTHAM GOWEX

    by xeloris99 Jul 7, 2014 8:12 AM
    cohsgrad cohsgrad Jul 10, 2014 2:47 PM Flag

    Gotham got a big write-up in today's Economist magazine and yesterday's FT. Might cause some selling pressure.

  • cohsgrad cohsgrad Jul 10, 2014 2:19 PM Flag

    They were talking about the G.O. debt, not the utility bonds.

  • Reply to

    Call

    by cohsgrad Jul 10, 2014 9:03 AM
    cohsgrad cohsgrad Jul 10, 2014 9:58 AM Flag

    Hard to say. The market sure isn't helping them. I'm taking some dings in lots of places today. That is going to happen, just hope no collapse.

    I had planned on liquidating some other positions and shorting DRWI in a big way if the share price skyrocketed but it doesn't look like that is going to happen.

    Hey I learned Indonesia has a billion people today..... Peter Allen handled that question well. I liked the way he let it slide. I would have done that too because after all we all get things wrong. Talk to you later. I'm going to have a busy day elsewhere.

  • cohsgrad by cohsgrad Jul 10, 2014 9:03 AM Flag

    Missed the scripted part of call.
    Reliance Jio is going to be done in second quarter. Obviously they might get more.
    One analyst is a kiss-up to management. Pathetic.
    They drew down on LOC and said they have $17 million in cash now so that is good. They are driving down inventory levels and borrowing to do this. Won't continue.
    I've not heard any questions about stock offering. They didn't talk about previous one either. Maybe the question will come.
    Management talks so slowwww.

  • Reply to

    Nokia business

    by beekay425 Jul 9, 2014 10:17 PM
    cohsgrad cohsgrad Jul 10, 2014 12:06 AM Flag

    You got some things right there regarding margins. They simply are not close to break even. They might not need an additional $32 million per quarter in revenue but it is in the ball park or as good as any guess.

    Regarding the expenses, no I don't think you are right. Expenses will ramp if sales do. They are fudging but not lying.

    Don't hate DRWI. Just a nice simple business that is easy to follow and I like to follow companies on the edge of bankruptcy and in turmoil. I follow a lot of other companies like that but with most of them there aren't people out there pumping away like they are on this one. Not to be rude but if you told me to sell I missed it and I wouldn't probably wouldn't listen anyway. I've been the only person in the room who was right too many times. The only problem is that when you are right like that, you can look foolish sometimes when you are wrong but what can one do if something generally works?

    They are going to come to market with a share offering and while I still hope the sector goes into the stratosphere due to other positions, I don't think it will. Still, bubbles happen and DRWI is pretty close to bubble at 4 times book for a severely loss making company. I'm not worried at all. At least today I'm not.

  • Reply to

    Nokia business

    by beekay425 Jul 9, 2014 10:17 PM
    cohsgrad cohsgrad Jul 9, 2014 10:21 PM Flag

    That financing was at $1.20. Do not let management mislead you.

    They had/have a good size deal with US Cellular that led to improved margins this quarter. I'd expect revenues from this deal for at least another quarter or two but how long I don't really know.

  • Reply to

    Pretty bad

    by cohsgrad Jul 9, 2014 5:44 PM
    cohsgrad cohsgrad Jul 9, 2014 5:50 PM Flag

    How did that work out this quarter?

  • cohsgrad by cohsgrad Jul 9, 2014 5:44 PM Flag

    Down to $5 million in cash cushion. Hard to define cash burn but looks like around $5 million which is about what I expected. The hard part to figure out is inventory. They took that down $4 million so theoretically one could say they burned more but AP went down which goes the other way by $4 so lets call it $5 million burn.

    Margin pushing $6 million. Assume at high end, 40% sales growth and you still burn $2 or $3 million.

    Book value down to 60 cents a share.

    I'd say I pretty much nailed it although I thought margin would be half a million lower. I won't claim that the share price won't go up but this is a very sick business that has to come to market with more shares.

  • Reply to

    Mongolian economic status

    by marleydog216 Jul 8, 2014 7:00 PM
    cohsgrad cohsgrad Jul 9, 2014 1:35 PM Flag

    People aren't starving and they are coming off of a very low base so I'm not sure how much pressure they are feeling to conform to developed world standards of conduct. Hard to say what will happen when one lives in North America.

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