I think it is important in relation to this issue to keep in mind at least part of what the U.S. Attorney expressly stated was a focus of the investigation. We do not know everything that is part of the investigation, but we do know that the U.S. Attorney expressly stated that part of the investigation will focus on whether RR and other board members breached their fiduciary duties and engaged in self dealing in relation to the failed Goldman merger. Remember, that RR structured the merger so that after it closed he would acquire quite a bit more equity in the newly formed company. There is no way RR will again go down this path even if he manages to avoid major personal legal problems from the investigation. If he cannot profit substantially from taking EBIX private by obtaining a much larger equity position, then I see no reason why he would go down this path again..
I am curious to know what other people predict will be the numbers for Friday's earnings release and what resulting action will occur to EBIX's share price that day and several weeks thereafter. Do you think the long anticipated and hoped for short squeeze will start after earnings are released?
Nobody is going to want to acquire EBIX,, unless at an extremely discounted price, until the investigation completes. Moreover, although I definitely see a good fit between Guidewire and EBIX, Guidewire, as a fairly small company, is likely not going to be in a position to pay the kind of premium that a much larger company would pay, such as Salesforce, Oracle, or even an insurance company.. Unless things are going terribly wrong at EBIX requiring the company to sell now to save whatever is left of the business, I think that any attempt to sell the company now or during the foreseeable future would be a terrible mistake. EBIX needs to get all of the new deals on-line and generating revenue and get all the clouds about its future resolved with respect to the investigation before it even attempts to sell the company. Otherwise, I think shareholders will get screwed big time from, such a sale.
My take is that I cannot see any reason why Google would ever want to acquire EBIX. EBIX's business is so far afield from what Google does. I see no synergy or possible reason why Google would want to buy EBIX. Google is primarily focused on the consumer market, and EBIX sells to the business market. I could see many other companies possibly acquire EBIX, including Oracle, Salesforce, IBM, and many others who are either heavily focused on the cloud or selling to businesses. I also think that the last thing management wants to do now is even consider selling the company to anyone. Aside from the fact that EBIX in my view cannot be acquired until the federal investigation ends because it is impossible to accurately factor into the purchase any potential negative consequences from the investigation, I think that EBIX needs to get its business really humming as is expected in 2014 and then once the business is hitting on all cylinders and the investigation ends perhaps looking at selling the company. This in my view would maximize shareholder value and the ultimate purchase price.. However, I would much prefer that EBIX grows its business as a stand alone company and obtains a market cap of a couple billion dollars. This would be the most lucrative for shareholders and is achievable in theory in just a couple of years or so.
I have thought the same thing. What I am struggling with is if and when the squeeze starts, how to try to measure when share price has peaked because I bet it will correct down substantially once the squeeze related covering stops. I have some options that I want to unload during the peak of the squeeze, and I have no idea how to time their sale.
I smell some manipulation here today. It looked like the stock was being walked down this morning with very little success so as to give some shorts a chance to cover. Now that it appears some covering has occurred, EBIX is nicely up for the day. I can only imagine how this stock will rocket up when panic covering occurs hopefully after very good earnings.
Well, cheering is fine, but maybe confine it to a single thread instead of 8 different threads each day. :) I have been frequenting this board for years, and people here are looking for useful information about EBIX, and I, for one, do not like having to waste time sifting through a multitude of different threads posted each day by the same person which do not say anything other than the shorts are going to be destroyed.
You are dillusional and incoherent. Your post makes no sense. The merger is not in anyway back on the table. Plus, I really wish you would stop posting here several meaningless threads each day which has really mucked up this board. If you have something meaningful, useful and understandable to post, then do so, but otherwise I wish you stop posting this kind gibberish each day which has made this board far less useful for those of us who are really looking for good information in relation to EBIX.
Nobody, including Goldman, is going to touch acquiring EBIX until the federal investigation ends. How could a potential acquirer even measure the potential risk and allocate for it in the purchase price when the nature and issues in the investigation are kept secret. There Is no way to even structure a deal until this unknown is quantified.
Without trading well beyond 1m shares (and likely a lot more) in a trading day, I think it is safe to say that the squeeze has not yet begun. I think we are now at nearly 17.30 at the tipping point where the squeeze could start before earnings. I think that shorts are going to start to get very scared because good earnings could cause a quick $5.00 gap up from these levels (and probably more). I think RR's exercise of options recently, more cash on the books, substantial increase in institutional buying, and statements RR has made that 2014 looks like a banner year for EBIX all suggest good earnings. With recent trading activity over the last couple of weeks, I think the good news has leaked out. I think there is a real good chance the shorts may start to cover any day now in mass to avoid getting killed when earnings are reported. If true, longs are looking at an unbelievably profitable couple weeks ahead. I think from these levels EBIX will hit well north of $25 in the squeeze during intraday spikes. The key metric to watch here is volume which will be the best way in my view to determine when the squeeze begins. I could easily see trading days well north 5m shares when the squeeze gets underway and expect the squeeze to last quite a few days. I would not even attempt to time anything here because if the squeeze starts things are going to move real fast, and you will likely miss out on a lot of upside. The best thing to do here if you own EBIX is sit tight and get ready to enjoy the ride up.
I think you may miss out on a lot more than a point or two. If earnings are as good as I think that they may be, I could easily see EBIX quickly jump $5 after it reports and not look back because the short squeeze would then likely happen and will continue for quite a few days thereafter. If we get the squeeze from earnings which I think is very possible and fast approaching likely, I see EBIX going quickly to at least 25 and probably north of that number.
There may be some opportunities to buy and sell EBIX during the CC, but I am not interested in trading EBIX like that, and for me, it is a value investment which I invested in with a long term time horizon. What interests me is how to play the squeeze once it actually starts to happen in earnest where upcoming earnings are a real possible catalyst. Because of the very large short position, it is going to likely take quite a few days to cover, especially because shares to cover will be very scarce since most now long on the stock are like me and not quick to sell. I will likely not sell my shares even during or just after the squeeze, but I also now hold 100 January, 2015 calls with a strike price at $15. I will very likely want to sell these calls during the squeeze so that is going to be tricky to time. Otherwise, I plan on holding my shares of EBIX stock at least through the rest of 2014 and probably longer, depending how things go with the company.. I also do not plan on adding to my EBIX position since I am so ridiculously overweight in the stock unless we again see a share price of $13 or so which I highly doubt is going to occur.
I agree, and it is RR's fault that the IR/PR is so bad at EBIX. From my research, it used to outsourced to an agency which did a pretty good job. RR got cheap and decided to take in house in an effort to cut expenses. He may have saved a few bucks not outsourcing it, but now he has cost the company somewhere between 1/4 to 1/2 billion dollars in market cap by not effectively managing IR/PR in house. I think he should just outright fire the in house IR/PR folks if he continues to refuse to let them do anything. Why have IR/PR if you are not going to do any IR/PR?
It is a great company with a very promising future and a completely non-existent and inept IR/PR which is the primary reason why the stock has unfairly and unnecessarily languished for the last several years. The company has been targeted by many misleading and publicly made allegations of fraud and wrongdoing in connection with its accounting and tax reporting and has utterly failed at meaningfully responding to any of it. Plus, the company has completely failed to alert the marketplace, other than when it reports earnings, as to the status of any new deals or progress that it may be making which only has further exacerbated the claims of he naysayers. I do not believe my comment is in any way overly harsh and in fact if anything understates the complete lack of effort and productiveness of EBIX's IR/PR. I don't know that the IR/PR people even do because they at most issue 1 or 2 press releases every quarter or so.
I hear you, but the issues you describe and particularly the GS buyout can in my view easily be dealt with in such a case. I think it could be portrayed (truthfully) that RR tried to do the GS deal simply because he grew so frustrated with the false negative articles and short manipulation and decided that the only way the company could prosper was to get out of the public marketplace. The lack of IR/PR only made EBIX more vulnerable to this manipulation and did not cause it. A company that makes itself vulnerable to false and malicious attacks deliberately calculated to cause a substantial drop in share price does not invite, nor authorize such attacks. What happened here is in my over 20 years of investing in stocks one of the most outrageous things that has ever happened to a stock I owned which was clearly illegal (both civilly and criminally) and which to my extreme frustration has never been challenged in any meaningful way. In the end, I know that It will all work out because EBIX is a great company with a viable and profitable business, but it sure has been a scary and bumpy ride which has cost me quite a bit of sleep..
Also, you do not even need to go the Qui Tam route, and a private lawyer could simply file a civil class action on behalf of EBIX shareholders to go after those behind this coordinated short attack.
Great minds think alike because I was just reading the same article when I read your above post. The EBIX coordinated short attack is running a very old playbook which has been used many times against many other stocks. The shorts hire people to post falsehoods on message boards like this, put out bogus research reports which are very negative on a stock based on false contentions, and enlist people in reputable media, like Barrons in the case of EBIX, to publish articles carefully written to drive the share price down. I for the life of me cannot understand why this tactic has not been challenged. Even if the government is corrupt and those who profit from this tactic have enough power and influence to keep the government from taking action, there are without a doubt plenty of greedy lawyers out there who could make fortunes on this. There is a procedure in the law called Qui Tam which allows a private lawyer to bring a suit on behalf of the U.S. government when the government fails to do so in precisely these kinds of situations. The private lawyer, if he wins, can make an enormous amount of money in such a case. These cases can be difficult in that it may be tough to find the real money behind the manipulation so that you have a deep enough pocket to recover from (i.e, Yu likely has no cash to speak of), but if you find the deep pocket the recovery could be enormous. There has to be some very deep pockets who are behind this coordinated short attack against EBIX and a lot of money to be potentially made by a lawyer who decides to go after them.
I could not agree more, but this is just one of many unfair things in the world. The government would likely respond contending that they lack resources and therefore cannot move these investigations forward any faster without more funding to hire more staff. What I wish most is if the government would put some focus on the kind of tactics that have been used to manipulate EBIX in this situation. EBIX is by no means the first stock to be manipulated by a coordinated short attack were deliberately false articles are written to drive the share price down, and people make big bets on the stock going down just before these articles are published. Those who write these articles are likely being paid to publish this false information by the very same folks who are profiting from it by shorting the stock being targeted shortly before the publication of the articles. Copper Mountain and many other stocks have fallen victim to this. Innocent investors have lost billions of dollars as a result. I think this tactic has cost society and innocent investors quite a bit more money than accounting or tax improprieties have during recent years which seems to be such a big focus of the government.