$50 mln in CLAIMED contracts actually - I still believe the company is a fraud and today's news forther reinforces my view. This is most likely a buddy deal as the company is located almost next to Supercom in Herzliya. And of course the purchase price does say a LOT about the revenues.
With the aggregate purchase price not to exceed $2.5 mln current annual revenues of the company will be somewhere between $0 and $500k at the very best. Given these numbers the company simply CAN'T be profitable or we must assume that their people work for free and there are no other costs associated with doing the business (which business by the way - there's zero reference to the company in the whole internet).
Anyway even if the company does miraculously earn a profit how can this be "very accretive" to the earnings of a company the size of Supercom ?
Things don't add up here once again.
stock close to day lows despite the market rebounding here - adding more to short, looking to cover around $4 at session end.
pkjvdr is right - on the call they said, neither management nor the company would be allowed to buy stock until the acquisition has closed. If they did they obviously violated corporate governance principles again. Put I suppose the press release is just another hoax.
I firmly expect the call to be a disaster once analysts discover the capex required to bring the outdated Aventine plants to produce acceptable yields.
the buyback plan even if fully executed wouldn't be enough to offset the dilution experienced by shareholders over the last 12 months.
YES SIR - huge gain and another good call. Given the company's history the news might be just another hoax. Actually nobody will be able to verify if they indeed bought shares
Tiny 6 people outfit just three blocks away from the Supercom headquarters - wouldn't wonder if this is a well disguised related party transaction. Apart from the website there are absolutely no references to the company on the Internet.
would expect the shares to end up in the red despite the news
actually the second part of the press release seems even more meaningful to me:
"in addition, the Company was able to purchase stock in open market transactions in excess of $10 million in principal amount during the open trading window pursuant to its previously announced buyback authorization. The Company also established a 10b5-1 plan to remain in effect during the closed trading window associated with the closing of the fourth quarter. All specific details of the Company's buyback activity and management purchases going forward will be reported on its regular quarterly financial reports."
This tiny deal with a tiny regional carrier has actually been announced THE THIRD TIME today by the company.
I didn't claim anything different. But I will help you understand the transaction:
The current Aventine shareholders want to sell as soon as possible - they were the former creditors of the company which went bankrupt already 5 years ago. The restructuring made them the new owners of the company and they had to wait five long years to get at least some of their money back.
So PEIX will issue 17.75 million shares to these guys which will be eager to hedge their selling price rather today than wait until the new shares are issued. This will put ongoing pressure on the share price right from the start.
PEIX will again be saddled with a huge debt load of $135 mln after paying off almost all of the former debt thanks to an exceptional year for ethanol producers.
PEIX will now be exposed to the low margin, high-competition mid-west area.
The Aventine plants are outdated and require millions of dollar of immediate capital expenditures to reach acceptable margins.
Given that crush margins have continued its recent slide it is hard to imagine the rationale for the deal. PEIX is paying more than a dollar per gallon of acquired (outdated) capacity which looks pretty expensive given the even weaker margins in the mid-west.
The deal will fire back heavily if crush margins continue to move down and might easily push PEIX into the red in 2015 given new interest payment and capex requirements.
a tiny regional carrier is actually the opposite from what has been speculated so I would expect the shares to turn red during the session
hopefully the guy will go to jail for his pumping one day
no - production remains the same, they are just giving up on distribution in the PRC