on an enterprise value basis, the stock is currently trading for around 10x trailing earnings. That seems pretty fairly priced considering a large component of the business is cyclical. Not to mention factoring in exposure to China, oil & gas, etc. that are all in the toilet right now. And this is all assuming there are no shenanigans going on with the auditor/management.
Public float is 1.6mln shares. The stock traded over 3mln shares one day. So either people were flipping shares all day (unlikely) or somebody with a lot of shares was unloading.
A European auditor may not be familiar with US GAAP and SEC reporting. Generally, you want the auditor based in the country in which you are reporting financial results. Europe would at least be a step up from what they have now though.
I'm not short. I was actually long here at one point, until I started digging deeper and found things I didn't like. If management truly wants to increase shareholder value they need to do two primary things: 1) Get a US auditor and 2) Secure some financing so they can stop issuing convertibles. Also, doesn't it strike you as a little odd the number of shares that were exchanging hands over the last few weeks? More than the entire float traded. The cynic in me would say major holders were dumping....yet no form 4's were filed. Strange. Of course, if the company is lying about their numbers, I highly doubt they would be worried about filing required SEC documents.
Company needs a domestic based auditor. And also a CEO who is not 29 years old and was hired because his daddy is the largest shareholder.
ha. It's not a matter of opinion, it's basic finance. Once equity is sold, shareholders are diluted and there is no way to get your ownership percentage back. Which is why you hardly ever see good companies selling stock. Good companies are actually issuing debt right now because interest rates are so low.
I'll give the stock credit though, I've never seen a company trade for 2x the offering price. That's impressive, although something tells me it won't last. At these prices, the company is probably fairly valued (if they can hit their revenue targets). Nobody is ever going to pay a premium for the stock for the simple reason that now 90%+ of their revenue/profits is going to coming from one source. If they were to lose that contract, it's lights out.
especially if the proceeds are going to be below your initial expectations? Why not just take your chance in court? Jury could award some lotto figure and then you settle after that instead of waiting for appeals. This seems like a dumb decision with the trial only a few months away. What's another few months of legal fees after you've racked up years of legal fees? Patent has already been found to be valid. T-mobile should have been sweating if it went to trial and you let them off the hook?
Something doesn't seem right here. Surely management and the company's lawyers are not this stupid.
you're a moron if you think that. I would always rather have a company take on debt than sell equity. That's investing 101.
they should have been able to get "seed money" without diluting shareholders by over 60%. Ever heard of a bank loan? If this was such a sure thing, you're telling me a bank wouldn't give them a loan for say 6-7%? That's a great return in today's environment. Instead, they sold the company down the river. This was absolutely the worst possible scenario for shareholders, outside of the Motorola deal being cancelled completely.
Company just got sold out from under you. Added 5million shares to a 8million share company. This was the worst possible scenario for investors and yet the stock is now trading nearly double the offering price? And who knows how much more dilution is coming. Never ceases to amaze me of the stupidity of some people.
stock is now trading nearly 100% higher than the offering price, when stocks usually trade below it. Pretty obvious manipulation going on. Wouldn't touch this with a 10-foot pole at these prices, especially since I bet there is more dilution to come.
what reason is there to have an auditor in India when there are no operations there? Not to mention a lot of the executives at CETX are Indian, including the CEO and his dad (the largest shareholder). Just guessing this auditor may not be that "independent" as required by SEC governance laws. I don't have the resources to investigate, but my feeling is it's probably not a coincidence.
with their auditor in India, I suspect they can make the numbers whatever they want them to be. Do your research here and you'll figure out something doesn't smell right.
Previously, they've disclosed how much orders were. Even if just $1 million. Makes me think this was just a fluff PR to allow big holders to sell.
Welcome new bagholders! Volume today tells you the major holders were dumping and/or issuing more convertibles.
as long as the company keeps diluting shareholders with convertibles, nobody is going to be in a rush to buy this. If you were long you had a great opportunity to get out over $4 while the dumb money was buying. This is dead money until they get some actual financing....which begs the question as to why nobody is giving them a loan if they're making so much money.
ROB's bankruptcy is somewhat hard to find, because CETX barely said anything about it. See the 8/6/15 correspondence with the SEC available on EDGAR. Also said they never audited the company before they bought it- another big red flag.
"The fact that the acquired company was a foreign private entity and did not
require audited financial statements. The company was acquired through an insolvency trustee and performing an audit during the acquisition process was not possible."
Didn't they acquire a "bioenergy" company last year that they never named? A few years before that they acquired a stake a Pluto- some mobile advertising company. What that has to do with their other businesses is a mystery. Before that they acquired Griffin filters. And I'm sure I'm missing several other acquisitions. They bought ROB out of bankruptcy, did they not? And then it miraculously starts making money? Other manufacturing is in Romania. The corporate office in New York is the same address listed for Ducon Engineers (somehow connected to the CEO's father). The only pictures I can find of the ROB facility in Germany look like artist renderings.
Just seems to me like there are a lot of moving pieces here and complicated international subsidiaries. Would be the perfect cover to overwhelm some backwater auditor in India (again, why is the auditor located in India?). Let's see how this supposed U.S. manufacturing acquisition goes...I feel a lot more confident being able to check the financials of a potential U.S acquisition target. For the revenue and EBITDA they claimed it had in the press release, a business like that should have sold for about $20m. Something tells me they probably got another "great deal."