The outrageous selling by insiders (Directors) and beneficial owners during the August spree was so intense and massive that a few of them should be investigated and prosecuted. These A*holes are probably laughing at naive shareholders in some caribbean island right now.
I think your analysis is biased. Biased being heard or read through some negative perspective. He actually said they are in a soft patch because of consumer confidence being in a soft patch. And that according to their experience -which we have to trust- is that their growth and earnings is tightly correlated to consumer confidence.
The inference then is that both revenues and earnings will likely grow in parallel to consumer confidence which has ways to go for many, many years till it reaches past peaks.
He also said they were able to keep the 20 mill ebitda in spite of the reduction in revenues post-sales. NextRadio will have their spot in this segment battle but anyone overly optimistic is not assessing the whole playing field with the likes of several internet giants already established.
What they do have which is extremely important is 2 brands in LA and NYC which are the equivalent to prime real estate and will only become more expensive assets, as well as other content/media creation abilities. Remember, content is king.
Here you find:
good balance sheet
industry coming out a bear
The above is good as an investment in my book.
I would place zero value in the 80 mill or so windfall that may come their way from the Hungary deal gone wrong. Good luck with getting to work the rule of law anywhere in the eastern block.
The reason you buy this stock is the same reason Warren Buffett buys locally oriented, smaller and regional newspapers. Perhaps, you don't belong here.
I am always nice to proctologists.
Notice I used the word "perhaps". As in a suggestion. You sounded disappointed. Good luck wherever you invest your money.
They did have things to say. They have cleaned their balance sheet to a large degree. They are growing, albeit slowly. They have a digital/internet venture that has some promise. In turnarounds it is common to see these smaller companies go on roadshows or participate in industry conferences to get the word out. Like everybody else I am too disappointed with the slower growth and surprised how the presentation was handled. A little stronger sense of victory and success with corresponding statements would have been better. But let's remember, not too long ago this company would not take questions during cc's. So they are not 100% shareholder's friendly. Only now they have starting to move into that direction.
Two more things: as painful as this drop has been it wasn't on really high volume. Secondly, some here have amassed large positions and are now getting out at any cost. I will wait until the dust settles.
To Peter North who was being accomodating to Walsh's sale/excercise of options. In light of the drop I continue to feel the timing of the transaction is suspect.
I can't believe you see a partnership with Sprint as inconsequential only because Sprint has a fraction of the customers ATT and Verizon has. If anything, this helps EMMS test the internet waters before they ever decide to become a more aggresive internet play with radio/media content creation added. NextRadio could be a long-term ongoing development. But they must bring in real internet guys. Just an "app" will not do!
This can only be valued as a good initial first step. If it stops here then it meant nothing. EMMS should look to change their business model.
By the way, good luck finding ultra-fast growth opportunities in the slowbama era where no stone is left unregulated. About the only industries that were able to escape his wrath were fracking (it flew under the radar) and some biopharma. Capex everywhere continues to be frozen, which affects mainly and mostly all these small caps.
This is an application for God's sake! What differentiation could have been made except for "data" savings expense? In my view, a timid attempt will not change the picture greatly and this will plow slowly. The application is either adopted naturally or it is not. Sprint or no Sprint. It completely depends on user adoption. This can't be forced or faked. Right now reviews are mixed with a slight positive trend.
An application, new software or online/mobile venture can take some time before it develops critical mass and it doesn't necessarily have to be unique or radically different. It has to do what it is supposed to do, well.
Smulyan needs to make a trip to Silicon Valley, Menlo Park or Mountain View get a few internet wise guys and transform the company. Or be more aggresive when it comes to development. He is in the unique position where the radio business (content) can marry a mobile/internet business (ads). Now nextRadio must come up with their own "googleads" model and find a way to expand beyond Sprint.
In the meantime, it is better to be invested here. The company will grow either way and so will the share price. If it finally gets on the mobile/internet bandwagon it can grow a lot faster. With the caveat that a mobile ad model is slow to mature and be adopted. It's a jockey stick.
At what price was any of the direct purchases made? I see NONE. What they did was reconverting their old stock option scheme for a new one. The old one required a much, much higher conversion price. Obviously, mgt realized they were worthless. The new stock options convert at current prices proving them with a swift, quick profit when/if they sell. What's the bullish story here except for more stock option games by insiders?
Here you go, from Maguire's letter:
DESPITE POOR PERFORMANCE MANAGEMENT CONTINUES TO BE REWARDED
Inexplicably, despite this persistent multi-year decline in performance, management has recently been rewarded as if the responsibly for managing shareholder value resides elsewhere. We note, for example, the Company's recently revised Share Option Exchange Program in which a substantial portion of the stock options outstanding with an exercise price greater than $4.00 per share (many of these options were held by senior managers who have led the business for the past five years) have been given a new strike price of $0.9866 per share. In our opinion, this is simply unconscionable and given management's performance over the past five years, the Company's proclamation that the value exchange was necessary to retain good management is absolutely absurd.
This team cares only for themselves.
Where is he/she when we it's needed the most?
A public letter condemning the company's stock options scheme while offering remedies will do. Why is management being rewarded for continuously losing shareholder value?
Even if the most optimistic projections can be achieved, how far the price per share can go? At close to 100 mill o/s I'd say there is a cap. Earnings power seems limited for this type of retail product. Unless the company has other plans.
Even if TM gets someone in the BOD this company is in the wrong business using the wrong methods, bad management aside. Relying on SEO to get traffic is living in the past and a direct to consumer model is fairly limited for this type of products. So both conceptions will not produce the high growth that is expected while moving into a b2b model the company will face mighty competition from established businesses. It can be done, but it will require much much more than getting the right person in the BOD.
Unlimited growth (as in production) is not the same as unlimited demand. MC can plant anything they want till the skies turn white. That is not a guarantee that anyone will be buying what they sow. Now, try to "imagine" that!
Tim, first and with all due respect, how or why did you acquire a 3% stake in a unionized company IN ITALY, no less.
"He's afraid of hurting the FEELINGS of Italian unions."
I do not know you but perhaps you have little experience with unions, or unions in latin countries. I, instead, am very familiar with them having lived 30 years in a South American country. Unions -not always and not everywhere- could be singled out as the one element in a company that has the potential of driving it to the ground. Unions do not get hurt. Instead, they can hurt. Both financially and physically. We do not know what's behind the board or the family's decisions but sometimes a bankruptcy is one way to bring unions down to their knees. This is a complex investment you have a stake in.
Other than this and besides the very real "cost" issue, management seems vague in their solutions while acknowledging some of the problems. It's hard to see how a new armchair will radically change anything here.
As for a family owning 60% of the business, do you know what other investments they have? Do you know if they own bonds on the company's debt? Do you know if they are shorting their shares? Sometimes large family ownership does not translate into a direct, straightforward commitment to all shareholders. Good luck with your investment.
There is literally no difference with their filling from December 12, 2011. Where do you get they have bought commons? Their preferreds are convertible as well. Please be specific.
mmh, no, my friend. Unions in some latin countries -and Italy is definitely latin-, with a left undertone and populist speech have deep political roots, a lot of leverage and physical power to threaten. Perhaps in the US it has become easier to confront unions but anywhere else it is easier said than done. Unions may control masses, therefore votes. It is obvious both the family and management are not operating in the best interest of shareholders. We just don't understand why. At least, I don't.
December 12, 2011
The aggregate Preferred Shares held by the parties to the Lock-Up Agreement as of the date of this filing is 788,860 (12/12/11), convertible into 1,924,818 common shares.
September 26, 2013
Owns Preferred 491,510 convertible into 1,199,284 shares of Class A Common Stock. Also owns 748,812 shares of Class A Common Stock for a total of 1,948,096 (5.14% of o/s)
1,948,096 (2013) - 1,924,818 (2011) = 23,278
Literally no difference.
I see the trades. How do you know the "acquired" commons weren't simply a conversion at those "convenient" prices right after the large fall on 9/20? This could still be bullish but it looks they have been converting all along as the aggregate amount of pfds owned today is much smaller while the commons position grew from nothing to 748,812. Only these 2 trades in the last 60 days but there must have been many more since 2011 given the different ratios owned as of this last filing. The SEC filing may take "conversion" as acquisition.
Zazove may see the pfds lawsuit going nowhere and may suspect upside on the common. As I said, still bullish for the common even though it is not clear these trades were outright open market purchases.
BTW, thank you for the alert and the heads up. I would have not looked into this filing have you not written about it. I am aware how detailed oriented you are.
Did he just say 50 mill in series C at 10%? Perpetual preferreds? That is 5 mill a year in payments for tot yearly sales of 40mill! Being valued at 2+ times yearly sales this is NOT cheap. Bad capital structure hidden under rosy story. Watch when he says EV at 100 mill. The savvy observer will know half of that is the series C. Common shares took a huge hit with this financing and he thinks he is shareholder friendly!!
FTK used to be another 40 mill mkt cap company now 1b+ and never issued this type of preferreds. More wisely, they issued units with interest, convertible at a slightly higher price than the stock price at issuance. Converting to common and bringing everyone on the equity bandwagon was what gave them credibility. The CEO here made a bad deal for commoners not believing in equity himself. Responsible dilution is not an issue when the company grows fast.