even worse the hedge fund might go short the stock once CREG is asking to draw on the equity line so they get more shares at the discounted price.
that said the after hours pop looks pretty exaggerated given that the business isn't growing, profitability is still pretty low and revenues came in slightly below estimates.
bottom line came in much better than expected due to better gross margin performance. Joe's business still underperforming as wholesale is down yoy. Given the environment the results are respectable.
actually they stated that they will keep their options open with this regard - and pointed to the rising interest Dragonwave has seen on the capital markets as of late. I guess that's very telling
shorted at $2.50 this morning given the disappointing management statements on the call - the recent revenue uptick will most likely be short-lived, a secondary will have to be done and margins will come back short term
- recent India orders to be completed in Q3 already
- cash burn to remain excessive even with revenues above $35 mln
- management comments suggest very low mid term visibility as they are working around almost every forward looking question
Given the conference call I woudl expect a secondary at any minute now as the company desperately needs cash to cover ongoing losses. With the ramp down of the India deployments revenues might fall of a cliff starting from Q4.
with the shares up 100% within a few weeks, two recent upgrades and finally some sales momentum it is a great time for management to raise much needed cash. Demand will be strong and the company might take in $30 million easily if not more. And while this means further dilution the company could pay back its credit line and reach cash flow break even without further limitations. I would applaud management for an offering NOW.
given results and outlook the company will be able to do another secondary at much better terms than just a few weeks ago - good move to wait until the stock price finally went in the right direction for them. Would wait for the secondary to get some exposure.
on the other hand even at next quarter's revenue level the company won't be profitable and cash burn will stay high
it is quite clear that they are right when just looking at the stock price. Permalongs will end up with nothing here
Cowen's Robert Stone has cut RGS Energy (RGSE) to Market Perform, and slashed its PT by $0.90 to $2.60.Stone is worried the DoC's imposition of fresh tariffs on Chinese solar module imports will pressure RGS' bottom line, and that the company will have trouble offsetting the price hikes by passing them on or cutting costs.He adds RGS' new stock offering should leave it with enough cash to "cover normal operations" until mid-2016 (his ETA for cash flow breakeven), but also thinks the company will have limited flexibility to pursue acquisitions or the building of a "HoldCo" for project assets.