Sue is still making money, don't be fooled. Let's not forget the 960,000 restricted stock units she received on 3/1/16. That's been a frustration for shareholders back since Peter was running things. MIFI Executives & the Board have been handing themselves restricted stock units (which are free shares) all the time. When MIFI was trading near $5, they would give themselves 200,000 share grants. Now that it's near $1, they give themselves 1,000,000 share grants. Do the math? They still are giving (handing) themselves $1M payouts over time. The true shareholders are the only ones at risk and have lost money on MIFI.
Stop talking about the shorts.....For institutions, this is chump change. So if someone shorted 500,000 shares last April and got lucky at the peak around $6.60 and now sees MIFI trading at $1.60, we're talking about a $3.3M investment now worth $5.8M or a gain of $2.5M. Major institutions invest 10's, if not 100's of millions of dollars in companies.
Sej said it right, this is about MIFI growing revenue and earnings. At a market cap that is half of Fleetmatics, MIFI would increase by 10X to $16 per share or $850M. MIFI had 534,000 subscribers as of Q1 and Fleetmatics had 737,000 (about 38% higher). Yes, MIFI has higher debt and less cash, but a $1.7B vs. $85M market cap difference won't last long.
Buy all you can of MIFI
Not to dwell on the negative but I didn't like the fact that IoT revenue fell by $5M QoQ and breaking out the SaaS & Services revenue showed only a $200K increase QoQ. Also, guidance for Q2 is disappointing.
MIFI revenue seems to have saved the quarter with an increase of $10M QoQ even though it's the lowest margin business. Probably never a better time to consider selling the MIFI business.
So, in essence, Fleetmatics is selling at 4X annual revenue even when FLTX is trading near their 52 wk low. ($345M in annual revenue vs. a market cap of $1.4B)
As great as FLTX numbers look, I don't see much upside at there current valuation for the stock price.
I'm looking for the details behind this sale to Telit as I don't believe this is a complete sale of MIFI's Mobile Computing business as I expect this to be a small segment of their hardware modules. SWIR sold their entire Aircard business to Netgear for $138M plus $5.9M in liabilities almost 3 years ago. This could be some of their older 2G and possibly 3G modules which are intended for industries outside of Telematics.
garieh4 - On the 8-K that MICT filed on 2/22/16, they indicated "The Company expects to finance the acquisition primarily with new debt.". As I've said below, if there is a "Glitch", the issue is with MICT and not MIFI.
The full report:
Micronet Enertec Technologies, Inc. (the “Company”) is filing this Notification of Late Filing on Form 12b-25 (the “Form 12b-25”) with respect to its Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (the “Annual Report”). The Company has determined that it is unable to file the Annual Report within the prescribed time period without unreasonable effort or expense. Additional time is necessary as the Company entered into in February 2016 a definitive agreement for the asset acquisition of the Telematics business of Novatel Wireless, Inc. (the “Transaction”). The Transaction was scheduled to close by March 31, 2016, but closing has not yet occurred as of the time of this filing. The Transaction, which following its closing will constitute a substantial part of the Company’s business, is further described in the Current Report on Form 8-K filed by the Company on February 22, 2016. Until the Transaction closes, the Company’s resources that would normally be utilized to complete the Annual Report are also focused on closing the Transaction. The Company expects to file the Annual Report on or before fifteenth calendar day following the prescribed due date.
Reading the NT 10-K, it looks like an announcement for the sale may be delayed.
"The Transaction was scheduled to close by March 31, 2016, but closing has not yet occurred as of the time of this filing."
Step 1: On March 31, 2016, Micronet Enertec Technologies, Inc. (the “Company”) announced the financial results of Micronet Ltd, its consolidated subsidiary, for the fiscal year ended December 31, 2015 and other financial information.
Based on the last question from the recent conference call, Newman specifically mentioned that the sale would close on March 31st and MIFI would receive the cash the same day. If you look at Micronet, they were expected to announce their FY 15 earnings today or tomorrow, so I would guess that this deal closing would coincide with their earnings announcement.
If it doesn't close, it will have far more to do with issues at Micronet than MIFI as the transaction was subject to the completion of financing of Micronet. Micronet only shows ~$11M in cash on hand and ~$27M in annual revenue.
Also, on Micronet's press release, they shared that MIFI generated $22M in revenue from this segment of their business in 2015. ($5m to $6M per quarter) Not as impacting to MIFI's future revenue as some had assumed, but the $12M in cash tomorrow will be much more impacting. (Not to mention the $6M in 2017 & 2018)
Nothing a guarantee, but we'll know in the morning or after the market closes tomorrow.
There's a great reason to buy MIFI at $1.67, because (as you said yourself) there's a good chance MIFI could be acquired at $6 to $9 per share in the very near term. A 400% to 500% increase is more than reason to buy MIFI today. MIFI closed their Richardson, TX facility to lower expenses & increase margins, they will soon sell the IoT Hardware for the same reason & $24M in cash, Sue was appointed CEO and is costing them no money, and the decks will be cleared to be acquired in April 2016. At $250M revenue and gross margins headed toward 50%, I'm sure Sue's calendar is filled with meetings with potential acquirers and her main job right now is to drive for the highest bid as she thinks about restarting her retirement with an additional $10mm+ in her bank account.
Thursday, March 10, 2016
REPORT of Patent and Trademark Closing, regarding patent and/or trademark number(s) 5,129,098, 7,318,225, 7,574,737, 7,319,715, 6,785,556, re314 Order Dismissing Case. cc:USPTO (ag)
Anyone have access to this report that was published today?
The one that has been doing all the Tap Dancing in the last two years was Alex Mashinsky and Sue is trying to bring back some trust, credibility, and earnings to MIFI to draw in investors. Alex was the one that missed Q2 guidance after the FW acquisition and $120 note were finalized. You can also hold Alex responsible for the miss in Q4 being that he was removed in late Oct. Alex boasted $500M in annual revenue and rolled that back to $400M and then $200M in IoT by end of 2015 in front of several analyst meetings. (In fact, remember when Alex bailed on an Analyst Meeting last year at the last minute) Alex's tap dancing or "blatant lies" pushed MIFI to the highs in April 2015 to allow Alex to get his hands on the money to acquire FW & Digicore. Alex then claimed hundreds of millions of dollars in new carrier wins expected for the beginning of 2016. Clearly, that was B.S. as firing Alex and appointing Sue CEO in October wouldn't have changed these deals that would have been in the works from happening if they were real. Alex and the "Novatel Shareholders for Change" were small time Ichan want a be's that thought they would make a quick buck on the IoT growth story. In fact, I would love to see the SEC do an investigation into the Short Positions taken in MIFI as it grew from 773K shares short on 3/13/15 to 6.2M shares short on 9/30/15 just before Alex was fired. They might find Alex, Richard Karp, and others affiliated to the "Novatel Shareholders for Change" to those who have profited the most from the short positions. They thought they could just acquire a bunch of companies to piece together a bunch of revenue and they spent other people's money to do it.
My only negative toward Sue Swenson is the fact that she was the Chairman of the Board while this was happening and I only wish she would have recognized the dishonest and deceitful actions of Alex, Tim McGuire, Richard Karp, and Cobb Stadler earlier.
louis....we all know you're an "optimistic LONG" so you don't have to tell us with every post. Also, you lose credibility and will be labeled a "pumper" with posts like this as everything you write is one-sided.
If you want to believe that yesterday's volume was an institution or company slowly adding to their portfolio, feel free to believe what you want. But as I said yesterday, the buyer of these shares yesterday could easily be a short that covered their position and unfortunately someone was willing to sell 200K+ shares to them to close out the position at $1.70.
At the end of the day, we need to see volume spike with more buyers coming into MIFI than willing sellers and MIFI management needs to convince investors that now is the time. If we're lucky, a mass majority of MIFI investors probably own MIFI at a cost basis between $3 & $5 per share and could be unwilling to sell their shares until MIFI reaching those levels. With buying interest, (and Short Covering) a lack of sellers would cause the jump/squeeze that many MIFI investors have been waiting for in recent months.
Sentiment: Strong Buy
Too bad we have a willing seller(s) of a few hundred thousand shares at $1.70 today. Clearly, a market maker controlling the Bid/Ask for someone buying or selling their position in MIFI today, but without such willing sellers, MIFI would be poised to jump higher.
Let's be clear.....These are not options, they are Restricted Stock Units. And, although they were awarded on 3/1/2016, these 1,855,000 shares mean nothing until 3/1/2017 at which time only 1/4 of the RSU's will vest and the remaining shares will vest in 1/4 amounts annually through 3/1/2020. So really, this puts nothing in the pockets of these people until 3/1/2017 and only then will 463,750 of the 1,855,000 become eligible to be converted into MIFI common stock.
Looking at Michael Newman as an example, he received 225,000 RSU when he started on 9/2/2014 that vest 1/3 annually on the first anniversary of the award. I.e. 75,000 on 9/2/15 (vested), 75,000 on 9/2/16 (not vested), and 75,000 on 9/2/17 (not vested). He was also given 13,333 shares that vested from 9/2/14 through 12/2/14 over his first four months of employment. He was also given 175,000 options at $2.25 (currently worthless). I would believe this was all part of his contract/signing bonus.
Mr. Newman then took 30% of his compensation on 1/2/15 in shares (27,522) when MIFI traded at $3.27 so he's lost money on this move being that MIFI currently sits at $1.70. (He's down $43K on this)
Mr. Newman was then awarded 68,850 shares on 3/16/15 which again vests annually over three years starting 3/16/16 through 3/16/18. He was also given 110,650 options at $4.54 (currently worthless).
Then, Mr. Newman received another 56,390 shares immediately as part of the Board Approved retention bonus of which he sold 21,122 to satisfy the tax bill. And then he sold another 29,046 shares on 9/2/15 to satisfy more tax bills.
Which brings us to yesterday's 355,000 shares awarded to Michael Newman. Again, 1/4 of these shares vest on 3/1/2017 and continue in 1/4 increments another three years of 88,750 shares annually.
I'm not going to weigh in on whether this is deserved or not, but I have to assume that this is the going rate to retain your CFO among other executives. Is what it is so let's move on.
Still waiting for a spike in volume before I believe shorts have begun to cover their positions. Imagine what 2 million shares short purchased back would result in MIFI's share price. And their would still be over 3.2 million shares short.
Some additional analysis is that the last time Short Interest was lower than the current 5,239,678 shares was the report on 8/14/15 showing 4,850,750 shares short. MIFI traded at $2.55 on 8/14/15 so some shorts could continue to hold tight, but if several look to lock in their profits MIFI could close this gap.
Are you talking about the $120mm note at 5.5%? Where are you coming up with 20% bonds?
And, my post was about Sue Swenson or Phil Falcone making an open purchase of MIFI stock. I never suggested or recommended that MIFI use any of the $24mm they will have after the sale. I agree that MIFI's cash and credit facility with Wells should only be used for the business. (The wiggle room as you put it)