I don't want to sound like a cheerleader..but several points on their financials..This is a free cash flow positive company..they generated 4 million FCF in 9 months...and they will do 5 million FCF in 2014..this is the 7th straight q of adj ebitda...Thiel took over as CEO 7 quarters ago.....the revs fell last q due to the industry wide problem of fraud traffic..this is a plague on all search engines....the last conf call was in the middle of q4 and thiel said the network traffic will grow and we will do 20-23 million in q4 revs....ever since heath clark exited..the company has turned....also thiel cut annual expenses of 2.6 million so we should do 5-6 million in adj ebitda for 15.......
gusto....I am very aware of the risks.....I only have a very small percentage of this in my portfolio....I bought 4 yrs ago at 4....2000 shares and held fast...only recently did I average down at under 1.25.....at sub 2 dollars..it gets interesting..but u are correct..its a risk..GL
go to youtube, and search for..... local corporation vision
and u will see fred thiel's 3 minute video on the future of local...definitely worth seeing
..also u can see more youtube videos about local if u search for the words
fred thiel interviews
that note gives the company the option to pay ALL interest..in shares at the end of each quarter at the lower of a) 7% less than the closing price in the day preceding the end of the q or b) the average of the last 20 days preceding the q's end...so far all interest has been paid in shares..of course this dilutes the shares but only really by a wee bit relatively speaking...
The term loan of 3 million has been paid off IN FULL
The only other loan is the revolver of which there is outstanding now only 4.3 million and that incurs cash interest of a few points over the prime rate
bottom line...not that much cash interest is being incurred...roughly 220k per year
The runway ahead is bright..the revenue will be way up this q compared to Q3..This was the opinion of Thiel who unequivocally stated that we will do 23 million in q4..and we will have 7 straight quarters of ebitda
I am now in for 5000 shares at cost of 2.45..Merry Xmas to all !!
here is some language lifted off a wbpage re the reasons why companies spin off their ip assets...
This fact sheet focuses on spin-off, also known as “spin-out”, intended as a separate legal entity created by a parent organisation (PO) to exploit its intellectual property (IP) assets. Once the company is established, the PO will transfer or license to it the IP concerned, in order for the spin-off to commercialise it. This fact sheet identifies the key factors to create a well-conceived spin-off company with a main emphasis on the IP-related aspects that can contribute to its success. Spin-off is considered as a common practice in Universities and Research Organisations (ROs), in order for them to exploit and maximise the economic benefits of the knowledge created, as often these organisations lack the required capabilities to market their intangibles.
keep in mind..in the 10K and in the 10Q and in the conf call, managment said that they are going to bifurcate the biz into 2 pieces..all the IP and patents will be spun off and be in its own subsidiary which will be reported on separate and apart from the parent co, which obviously is the ongoing biz that is the present one. It could be that this is being spun off to prep for an eventual sale that could fetch per Thiel's comments 100 million...I am digging on past co's that spun off their ip assets into a separate subsidiary to see what transpired thereafter..but yes u are correct something is up
stan I read this report as well. I wish managment would be more clear as to how they calcualte that 100 million and give more clarity as to what time period they feel they can collect this amount..based on a very liberal share count including allout of the money options and warrants...lets say 30 million...thats over 3 dollars alone not incl any other asset of the biz
I agree...keep up the good posting Stan...am now holding 5000 shares at cost base of 2.47
It is $2.01.....just as i thought...I anticipate in April..that these notes will be rolled by the london firm (the tail wind fund) but with a new conversion price..most likely 1.50 based on the prices now...that will dilute the shareowners more (obviously) but still wiping out all that debt will be profoundly better than being forced to cough up 350 grand a year in interest payments...and LOCM can force the conversion of these notes if the pps stays over 2.01 for i believe 90 days...GL to longs
I feel sorry for u if u have 500k in this at ave cost of over 5 bucks...companies like this are very speculative. why did u invest so much? ..having only 10k at about 2.75 is all I can stomach....how do u sleep at night?
stan..good point...they said they are putting all their IP assets into a subsidiary of LOCM-perhaps as a way to sell it all off for cash......
yose..I am awaiting a response from the LOCM IR dept re the exact conversion formula re the 5 million note, but even if u are correct re the 4 dollar target, it doesn't change my outlook on this company. I have been a tiny investor for almost 5 years...I averaged down to 2.80 with another 2000 shares this week, This is NOT the same company Heath Clark ran into the gutter. Since this new chap-took the helm 18 months ago.(Thiel) ..this thing is doing better much better....adjusted ebitda vs ebitda yes I hear u..but still adj ebitda positive now for 7 straight quarters and we have had good cash flow....u can knock that but its a darn good improvement .they will have NO PROBLEM refiing that 5 million convertible note in April.....i don't have a lot of money in this a total of 11 k cost basis,,,its under water by 50%, but i think this wilol be the year...i listened to the LA presentation and i was very very impressed....we shall see what happens
if the stock price can go up over 2 bucks that 5 million loan can be forced by LOCM into company shares thus wiping out 5 million in debts....2 good quarters and the stock price will go over 2.50
Yes I agree...LOCM has made 4 million in free cash flow the last 9 months, and has had positive ebitda for 7 straight quarters....these are the metrics that any lender will look at when making a loan..OR ROLLING a loan...LOCM has finally turned the corner..U should listen to the webcast on the December 2nd conference presentation in LA this week..it is posted on the LOCM website...very impressive...2015 will be the year for LOCM
the party holding that debt is also a major common holder and will most likely just roll the debt but demand a much lower conversion price , something like 1.65, such that the dilution to existing shareholders will be a wee bit more. I just listened to the presentation re the LCD conference webcast in LA and was quite impressed...I have been a shareowner for 4 years and finally I think the ship is turning around..i hold 4000 shares at cost of 2.80