easy money as almost always with CRUS - the shares will have a hard time moving to new highs as there are no catalysts for the rest of the year.
It won't. Why should they by the way ? The higher Q1 revenue projectione are obviously just a shifting in order patterns. Would expect shares to be down at least 10% this morning given that the shares were trading at multi-year-highs before the release.
Piper and Northland raised estimates and price targets somewhat but that's it. I am short the shares as usual on earnings as the "leveling" comment in the shareholder letter makes it pretty clear the Cirrus does not see any additional demand but rather experiences time shifts in order patterns.
Actually he is right - analysts were pretty disappointed about the "leveling" comment in the shareholder letter and on the call management was pretty reluctant to get into details about that but it seems quite easy to conclude that the higher Q1 guidance is just a timing issue and no additional demand. Would expect the shares to give up some ground this morning, perhaps as much as 10% given that the shares look priced for perfection here.
I don't think so. Analysts pretty unhappy with the leveling statement in the shareholder letter which actually just means that Q1 will be strong but Q2 won#$%$ obviously just a shift in order timing here.
Revenue guidance for Q2 is below estimates while eps guidance came in above. Fiberlan revenues still not material. They can't restructure forever to adjust to ever decreasing revenue levels.
AR too high, inventory too high, cash flows low along with the usually clumsy management answers are all the right ingredients for another sell off today. Already up almost 50 Cents
Craig Hallum actually was the company's sole financial advisor with regards to this ill-fated deal, so what else should you expect here ? Again, if ZBB's technology succeeds the company just sold out to SOPW on the cheap. If it doesn't work they will have to pay back the preferred shares. Current ZBB investors are screwed either way. Share price is back on the retreat already.
Again - you don't get it. If these technology works they are actually buying from themselves as SPI will make ZBB a roughly 75% subsidiary then through the conversion of warrants and preferred stock.
You do not get it. Outside shareholders are screwed by this deal either way. If their technology works SPI now gets the company on the cheap through the conversion of cheap preferred shares and warrants. Today's shareholders will be diluted to around 25% of their current ownership in the company. SPI will own close to 75% of the company after the exercise of warrants and conversion of preferreds. So everything they would buy from ZBB through this agreement would be effectively a purchase from their own subsidiary.
And if it works they are effectively buying from themselves as SPI now has the option to take control of the company for a tiny $35 mln
They bought nothing. They might buy something if it works out as agreed upon.
Given the deal structure SPI currently shows very little confidence in the final outcome as almost everything is based on real progress achieved by ZBB.
It just proves that SPI is willing to make a small bet for the small potential of giant returns. Their effective risk is just the $5.3 mln payed for the 8 mln shares.
SPI itself is a pretty shady company so this deal looks like a perfect fit.
Perhaps for ZBB but not for their current shareholders. IF (and this is a big IF) their technology succeeds SPI will make use of their right to take control of the company for a rather tiny payment of $35 mln and reap the profits of the new technology. If it doesn't work (which most should suspect) ZBB will be obliged to pay back $28 mln in preferred shares. So there's no way current ZBB holders can win here.
You must be joking. If their technology proves indeed successful SPI will be the big winner while outside shareholders get diluted by 92 mln share conversion / warrant exercise at around $0.70 on average. If their technology does not work they will be obliged to pay back the preferred shares.