Usually you price a secondary 3-5% below prior close on a reasonably priced issue. They could have pre-released subscriber and revenue numbers (doubt books closed on the rest), but took the cash at a massive discount. I would either be concerned that quarter is bad or that even mgmt believes the stock price was substantially overvalued.... My guess being either a mix or just the latter.
Maybe, but 35X trailing EBITDA and and 23X forward EBITDA and 43X forward EPS are too rich for my blood given mid-teens growth rates and reseller structure. I don't see any strategic buying the company at these valuation levels either. Perhaps I'm wrong, but my two cents.
who knows? a risk on stock in a risk off market right now. if it trades off fundamentals, you might get another shot but i don't think that's been the case since it crossed 10. with some stocks that matters, with others it doesn't... and this one has momentum right now despite uncertainty in the rest of the market.
I'd like to think there was something big going on but seems like too much insider activity for that to be the case. Anybody hearing otherwise?
Good numbers. DVD biz is ramping up and already is gross margin positive. Supposed to be EBITDA positive by year-end and accretive to earnings heading into Q1. Looks like this thing will do $5.5M in EBITDA (3.3X) next year and 10 cents in EPS (5x).
There are not a whole lot of players and suspect the little ones of 20-100 boxes of which there are only a couple will get rolled up. would be interested to see if RedBox or Blockbuster would sell down or trade geographic poertions for greater density and thus greater efficiency and margins. Yes, you need to know how to run this business but do not need to be a rocket scientist. You must believe in secular growth. That brixk-and-mortar and to some extent cable/satellite loses, and both streaming and kiosks take share. As it is, NOBODY plays at the low-end of the market for new releases other than the DVD kiosk guys and NFLX streaming for large content library of old movies or new TV shoes is supplementary to its mail-order new release DVDs. This business should grow for a long time as long as the players don't oversaturate local markets and as CSTR demonstrates it can be exceptionally profitable for all (particularly free cash flow development). If they stopped putting in more kiosks, top line would suffer a little but with no capex free cash flow would nearly double!