Are there cycles in terms of production problems? Is it conceivable that Mt. Laurel has some problems or is it merely an issue to be worked through?
Was an interesting presentation. Ceragon always provides a good overview of the market dynamics and competitive situation, obviously with a slightly skewed focus but far better than anything ever put out by one of their competitors.
Well as folks are posting about the possibility of an Amplats and Implats strike it seems only right to post that Norther Platinum just settled their strike which has been on-going for a couple of months now.
They do if the individual has a reputation for impacting the share price. For example Bill Ackman. Obviously PP isn't nearly as transparent and honest as Bill Ackman but there are some similarities.
I thought LKQ's response was entirely appropriate.
Tough to place a value on a company like this but the best argument for a high value that I can come up with is that they are earning roughly 15% ROE. I can't find all that many companies generating that sort of return that carry a PB of 3.9.
PE of 20 or 30 isn't outrageous but the truth is that the earnings growth is being purchased rather than created. That works as long as you can keep borrowing more and more but it eventually runs into a wall. They can probably buy more in Europe but they are coming close to the wall in North America.
Share price will almost certainly decline over the next two to five years but over the next month or even next year, I dunno. People panic over these types of reports when in the end they really don't say much. I think it is an indication of lots of hot money flowing around rather than economic fundamentals. Hey, I suppose I am part of that hot money wall too.
There are numerous inaccuracies in the Prescience Point report. A few that come to mind:
*Inventories. The growth in inventories has not been large enough to mask significant earnings shortfall.
*Waste Management. It isn't like WM was a total fraud. They created huge value (even when they were creating financials containing errors). To criticize a person who was just starting his career when he worked there is kind of unfair.
*Auto Nation. PP used data that was convenient for the story they wanted to tell but they ignored the last couple of years data which largely refutes their position that a roll-up can't work.
Hey, I think this is an overvalued pig but they are creating a very nice business. Roll-up of a fragmented industry to bring some efficiency and pricing power. Makes perfect sense to me and as a general rule I hate acquisition oriented companies.
Just to say again, overvalued pig but not a fraud. To PP's credit, they said possible fraud.
Just my little effort to bring some transparency to a situation that the company chose to make cloudy. I enjoy it.
I could probably trigger a lawsuit if I put my mind to it but it isn't worth my time. If someone else purchased shares in the period around the stock issuance I would encourage them to contact a lawyer that has handled other class action lawsuits except that the truth is that the way the lawsuits work is that shareholders get small amounts while the attorneys get a nice payday.
As I said, if this was a billion dollar company they would be in trouble right now. Their small size and financial problems provide a level of protection.
Should add that stupidity on the part of management when it comes time to issue shares isn't uncommon. Particularly on the part of micro-cap companies. It just makes me angry when companies try to hide things.
Went back and looked at the prospectus and the warrant agreement. Shareholders should really be torqued off about (1) the lousy disclosures and (2) possible failure to adhere to the agreement. If I were a class action attorney I would open a file on this and look for some clients.
First, the disclosures. I have no idea how many warrants are currently outstanding. I do know they issued roughly 15 million shares in the quarter so they got around $1.50 per share and not $2.10.
More importantly, they do not appear to have followed the prospectus. Page S-27 indicates that if Dragonwave issues a press release that results in the share price declining 20% or more the cashless exercise provision kicks in. I'm looking for a press release and I'm not seeing anything.
In order to justify the additional 3 million shares they have to argue that the decline in October was the result of a press release in September announcing the share issuance. Personally, I don't think the share issuance announcement constitutes a press release and any reasonable reader of the prospectus would assume it was something along the lines of a decline in sales or whatever but even assuming it is a press release, the share price didn't decline until well after the share closing.
Maybe there is another provision in the prospectus that clarifies things but I didn't see it and neither did the analyst at National Bank Financial. If this was a billion dollar company the attorneys would be all over them but as it is a company on the edge of bankruptcy they will get a pass.
There was an article in the Financial Times about a meeting at the Jones Day law firm by creditors to discuss a possible moratorium on debt payments too. That said, I think it was the decision of the court to hear the case that spooked people.
Was to satisfy tax withholding associated with restricted stock units which vested. Not a sale in the normal sense of the term.
That isn't what Schwab says. They said downgrade to $1.50.
I can see conflicting information on the subject but I'm not a pump and dump kind of guy as you are.
No, it doesn't clear things up for me at all.
They did not discuss the formula for the cashless exercise and what the triggers were. I have not read it today but the prospectus talked about the trigger being if Dragonwave issued a press release that resulted in a share price decline of 20% I did look and they issued no press releases other than the stock issuance release so in effect they had downward protection from market movements. That is a pile of garbage and it WAS NOT DISCLOSED PROPERLY. I'm not saying laws were broken but they did not disclose it in a fashion that anyone not a party to the transaction could understand in my opinion. You could feel Peter Allen get uptight when discussing this topic.
There is zero reason to believe the cash burn ends this quarter.
Hope this clears things up for you.
Can someone explain to me exactly what happened with the warrants? I went back and looked at the original press release and it was misleading in my opinion. The first time I've seen something like that at Dragonwave.
I also looked at the prospectus and perhaps it is too late for me to look at that sort of thing but I have some questions about whether Dragonwave issued a press release of the type that would allow them to make a cashless exercise as the holders did. I'm probably missing something and will look at tomorrow.
Dragonwave didn't bother to issue a press release when the exercise took place either.
Oh, a couple of other points. Their existing line of credit requires cash of $10 million be on balance sheet so they effectively have $13 million in cash after subtracting that out from the $23 million. That isn't a whole lot more than what they have been burning per quarter. Factor in that they have to pay NSN sometime this year and it seems pretty obvious they are coming back to the capital markets real soon in my not so humble opinion.
Tough to say but I would say that companies like GME that operate in a space that is going to shrink should return excess cash via dividends and let the market set the price. By buying shares back they did enrich management at the expense of long-term shareholders.
CRNT has mentioned seeing them in competitive situations but their current marketing focus appears to be different. AVNW is focused more on providing a single point of service while CRNT is selling to people who maintain their own networks. I think AVNW has done this in part because they have fallen behind product wise.
Maybe what AVNW is doing makes sense but they have never come close to making money even during the boom times so I can't figure out why they don't just give up and sell for whatever they can get. $138 million market cap even with today's decline seems hard to justify so they probably would have a difficult time selling out even if they wanted to.
An ugly ugly shakeout is needed. I think CRNT will survive but whether they will make a lot of money I don't know.
c) Government will guarantee pretty much everything provided you fall into the right bucket. Banks are happy to loan with a government guarantee and secured by receivables. The loan does support them but it is not an expression of confidence.
Of course, if the sales don't come the receivables to borrow against won't be there.
g) Cash burn did not improve. It was roughly flat. It is hard to measure when one factors in receivables, inventories, etc. so I can't say it might be better a million or two but it was pretty bad.
h) People can value shares however they like but I tend to not be a fan of sales based methods that don't look at profitability and the balance sheet.
Conference call is a big nothing in my opinion. Some people looking for an excuse to pump up results can interpret in that way if they like. I'm not saying it is a terrible call but it doesn't add anything.
You are taking an extremely optimistic view on things:
a) It was a "new supply agreement" not necessarily "new customer."
b) Where do you get "tier 1" carrier" from the release?
c) Credit line increase is nothing unless they increase sales. Hardly a huge positive.
d) Projection of "solid increase in gross margins." Hey you got that right but they also projected an increase in sales and said that Q1 was trough for sales so I'm not sure why anyone would count on their projections.
e) Disappointing Nokia? Are you serious? Try disappointing across the board.
f) Core biz? What exactly is their core business? What investments in Nokia did they make? You are just making #$%$ up.
g) Lower than expected cash burn. Completely inaccurate statement.
h) Sizeable room for improvement in share price? Highly depressed share price? They are trading for substantially above book value (like 150% of BV) and still generating huge losses are they not?
i) Management delivers a good performance? What is that supposed to mean? I'm pretty sure you mean selling shares. What about performance sales wise?
Sorry to be so rude but yours is a complete pump post.