I went short. Probably won't stay that way very long as there are lots of people just clamoring to buy garbage like this.
How could anyone give this post a thumbs down? It is clearly relevant and I can't imagine anyone saying bankruptcy isn't a distinct possibility if they have begin to produce these units and cancellation takes place.
All they have to do is split the public finance entity into a domestic and international units. Make sure you pay a big dividend out of the international unit too. Might as well throw in another big bonus for Brown as well.
The integrity of the New York public finance markets demand immediate action!
See, I got it wrong when I wrote the above. Towers are either junked or recommissioned. Both potentially wind up with equipment being junked.
Just admit you got it wrong. No big deal. I get lots of stuff wrong and will admit it.
The shutdown of the Clearwire network leads to the following questions in my mind:
1) Towers that remain. Obviously they will be recommissioned to LTE. My question is what happens to microwave equipment. Is it specific to Wimax? If yes, it gets junked. If no, they've got a lot of spare equipment sitting around which impacts future demand.
2) Towers that are recommissioned. Was the equipment usable in an LTE environment? If yes, then it keeps getting used. If no, it gets junked.
Someone get on the phone to John at Dragonwave!
Shuttering of substantially all CLWR/Dragon equipment is hardly nothing. Sprint buying nothing during the Network Vision project is hardly nothing.
It says something and I don't honestly know what.
If they were clearly stated then explain the mechanics to me. Allen was lying when he said that in the conference call.
Could be worthwhile to look at. I'm pretty sure I couldn't pull it all together so it would wind up being an exercise in futility for me.
The management companies within the group have assets but I don't know how much. Those are, at least theoretically, not regulated. If the insurance companies go down though I'm sure they would examine the related party transactions and try to argue they weren't arms length.
In the end, it all winds up being decided by the courts when things go bad. Will take years to sort things out if ACP backs out. The important thing though is that Lee sold his shares and got his severance before the deal broke down. If that isn't an example of poor corporate governance I don't know what is.
Have never heard anything bad about a Massachusetts regulator. TWGP ought to move all companies to New York where regulators have "significant discretion." Mostly joking there but I kind of mean it too.
So where did the money come from? It had to be a non-regulated company within the group. How much is there?
Of course regulators won't let them strip assets out, unless they were politically connected or regulator was corrupt, in which case they might. Ignoring those, then yea, it happens regularly.
You have to look at it at the subsidiary level. ACP can ultimately buy the group and if the lowest company in the group structure has a massive capital shortfall they might just be getting a deal as that company can go into rehabilitation and be deconsolidated from the group.
Personally, I don't think that is the case but I do believe that there are some pockets of value that are viable.
They got shares at around $1.20. They are up big time; at least for the moment.
At least folks aren't paying two and a half times book for the stock of AVNW and CRNT. Shareholders at least have a chance.
I never did sit down and figure out how that full-ratchet provision worked but they wound up issuing shares at around $1.20 with a number of warrants still outstanding. That $2.10 was total fiction.
I'm o.k. with DRWI management "puffing" about their prospects but I was a little bit disgusted with how they didn't shoot straight on that share issuance.
We need statements by entity along with an organizational structure in order to evaluate in my opinion. For all I know they have a non-regulated subsidiary with plenty of cash. It has been months since I tried to evaluate by looking at the information that is disclosed and I couldn't figure it out but I know I was guessing that there isn't a sub with that cash. So having said that, where did the cash come from for the Mass entity? As you pointed out, I don't see it in the parent company but somehow they got it so maybe there is capacity somewhere in the group.
The lousy thing is, it isn't that hard to provide the information that people need to evaluate the situation. They just choose not to. ACP would have easy access to that information so the fact they are on the fence says something bad in my opinion.
They need to disclose what they filed with the Massachusetts regulator too. Most companies don't provide subsidiary statements, I guess I get that even though I don't like it but the Mass filing seems pretty easy to do and does not bring risk that everyone will sue them if they made a mistake in putting the information together.
What happens to the cut-through if the deal falls apart? Is that bad for ACP? I don't honestly understand that part of it at all.