I am sure that is the case which is where EBIX PR would have really helped this quarter. The shorts were only able to walk down the share price this quarter from 38 to 30 because the volume so so low due to the stock being so poorly promoted all quarter. Had there been some PR this quarter, volume would have been much higher, and the shorts would not have been able to control share price as well as they did.
I agree and posted a comment similarly in another thread about her article. Her desperation was palatable in the tone of the article. The lack of anything new in her article, and her repetitively beating a dead horse arguing the same points which have long since been fully settled and proven false combined with her misstating and mischaracterizing facts in a very transparent way I think did a lot to make longs much more confident.
Earnings are not the problem, nor is top of the line revenue. However, MAUs are a serious problem. The data over the last few quarters does not lie, and the company is simply not attracting any new users because only celebrities, public figures, news junkies and journalists, and power users actively use the service. This is a very limited audience which cannot grow very large or very fast. This is a fact, and a very serious problem because without growing users there is only so much revenue you can generate with the current user base, and it is only a matter of time before a competitor with a larger or much faster growing user base decides to directly compete and take TWTR out. This can be fixed if aggressive changes are well implemented over the next few quarters, but if not, TWTR is very likely going to go the way of Myspace and Friendster. Nobody was competition to Myspace before Facebook, and Myspace had many more MAUs than Facebook. But Facebook simply did it so much better than Myspace that it eventually crushed it. Snapchat and/or Instagram are destined to crush Twitter unless Twitter solves the core issues of why it is not attracting new users by making the service more accessible, better organized, and more relevant to the average joe. By the way, I am also long on the stock so this is not a short bashing comment.,
Her bash articles are the equivolant of a highly respected analyst initiating coverage with a strong buy. Look how well earnings have been and share price has performed after the publication of her prior articles where in which she also prophesied gloom and doom for EBIX and challenged the company's numbers. Likewise, today is one of the strongest upward trading days for EBIX of the quarter which I attribute to her article. The street now sees through her charade. If her contentions in her article is all she has left against EBIX, then the stock is going nowhere but a lot higher because her article is nothing more than rehashed falsehoods which have long been proven untrue and mischaracterizations of the facts. Gotta love it when your opponent points a gun and shoots at you which is only loaded with blanks. :) She has nothing left, and the market now knows it.
Can't argue with that because my take up and until I had this thought was along those lines. But I have always had trouble buying into the notion that RR does not recognize that the business itself and not only share price would greatly benefit from conducting even limited PR/IR which really would not be very expensive. RR is cheap but anything but stupid and has shown with his growth through acquisition strategy that he is not afraid of spending a few bucks to propel growth. The amount that would needed to be spent to write up a few press releases a quarter is minimal and would have really helped this quarter. As such a large shareholder, RR just does not seem like the kind of guy who would as I agree seem to care so little about share price unless a low share price serves his interests in some other way. EBIX is real cheap now trading at about 1/2 of the p/e of its peers and lost over 25% of its market cap this quarter on very low volume. I can't recall any quarter where so little news was released which is really strange in light of all the good things going on and the retention of Edelman.
My math may be a bit off because I cannot remember how many outstanding shares were reported last quarter, but you get the idea.
I think the offer will be generous next time for two reasons. First, he wants to take the company private and does not want a series of lawsuits and likely governmental action stopping him from doing so again which can only be avoided by paying above fair value. Second, if he greatly reduces the outstanding share count through the buyback, then he can afford to pay a much higher premium than he offered during the failed Goldman merger because he will have much fewer shares to purchase. In fact, I could envision a scenario where he pays us $50+ per share which totals a much lower sum than he would have had to pay in total for buying all the remaining outstanding shares for $20 as he offered during the failed Goldman merger because of the greatly reduced share count from the buyback. If the company is buying back shares at a rate of about 1m per quarter, each year the company will be reducing the total outstanding shares by 25% or so!
Well, to figure out the time frame. I think a couple of variables control. First, we need to count all of the shares RR and his charity own and total them. We then need to total number of outstanding shares which we should get on Friday. Then, assuming the company continues to buy back shares at a rate of roughly 1m shares per quarter which if I remember was the pace indicated during last quarter (may be wrong on that) we can calculate about how long it will take for RR to gain control over 75% or so of the voting stock. As far as how much to pay the remaining shareholders, I think a lot will depend on how the business is doing and the share price at that time.
Not if he offers a sizable enough premium to the other remaining shareholders which he could very well do and afford to avoid such litigation and because the outstanding share count will be so greatly reduced from the buyback. If he offered, for example, $50+ today to the other shareholders I would be surprised if there would be much in the way of legal repercussions because it would be hard to argue that this is not fair value.
After reading some posts over the weekend, I think I may have figured out something that I could not understand and which I have harped about quite a bit here. I have been scratching my head for months trying to understand why RR would hire one of the top PR firms in the world and fire most of the company's in house PR people only to do no PR/IR to promote the company's share price, especially when the company's business has never been performing better while its share price trades at such a low multiple when compared to its peers. Now, I think I know why. RR does not want the share price to be higher and wants EBIX to trade at as low of a share price as possible. This way the company can buy back shares more quickly and for less money. This will allow RR to more quickly and inexpensively gain a high enough percentage of the voting stock to take the company private without much resistance which he made clear he wanted to do during the failed Goldman merger. The lower share price would also allow RR to be able to pay a much higher premium to the remaining other shareholders than he offered during the failed Goldman merger to appease them and avoid litigation and governmental action which occurred before because of the low share price combined with the outstanding share count of other shareholders being greatly reduced as a result of the buyback. It seems to me that this must be the plan here, and that is why RR will continue to run EBIX's business operations the best he can, but he will do absolutely nothing to promote or increase share price and hope the company's share price remains low and that the company remains off the investment community's radar until he makes his move to take the company private again. I think I get it now.
Nothing obvious about this at all. I do not think that they purposely trashed the stock with the intention of causing the share price to plunge. Instead, I think these rookies thought that the market would give the stock a boost if they were very candid about TWTRs problems and the time it will take to fix them as evidence that the company is acknowledging its shortcomings and now addressing them aggressively. They simply miscalculated.
Yup, I see it the same way. He would crazy to try this again and screw the shareholders with a low ball offer because I think the government and private civil litigation would come after RR hard. Also, if he tries to offer a low ball purchase price to the remaining shareholders and take the company private, there is nothing to prevent another suitor to come in and out bid him which is not unheard of. This could be an outright disaster for RR where he could try to take the company private on the cheap and instead wind up loosing ownership of the company completely to a competitor who outbids him or get himself in a bidding war with a competitor to drive up the per share purchase price. Very risky to take EBIX private with these things in mind without offering a premium to remaining shareholders which quells any potential legal claims and which is not so low so as to entice a competing offer.
I just researched this and answered my own question. Bottom line is that if the majority of voting shares approve the purchase price, then that is purchase price we have to take if EBIX is goes private. However, if RR is able to control this vote because he or his charity have such a large percentage of the voting shares that he can pretty much control this vote, then he may still face claims for breach of fiduciary duty if he does not offer the other shareholders a fair purchase price. I think if he makes this maneuver, he would be crazy to not offer a very substantial premium to the remaining shareholders to go private in light of the government coming after him for breach of fiduciary duty like the government did the first time he tried to go private and failed. Moreover, if enough shares are bought back, he can easily afford to over pay for the remaining shares because the share count would so much lower so it would make sense to offer a sizable premium to the other shareholders rather than face the legal challenges which most certainly will follow if he tries to screw the other shareholders again with a low ball purchase price like he did during the $20 offer in the failed Goldman merger.
How would it be determined what share price we shareholders would get if he does so? Can he get control of enough shares and just pay us a very small sum, and we have no recourse?
Unfortunately, I agree with you which has been RR's pattern. He clearly views EBIX as his own personal bank account and has absolutely no regard to the fiduciary duty he owes to shareholders. He tried to steal the company from shareholders during the Goldman merger and line his wallet with more equity post merger. Now that strategy failed and almost resulted in putting the company out of business and having criminal charges brought against RR, personally, he is not fighting the shorts because they are helping him gain control so that he can, again, take the company away from shareholders. RR is a dishonest man who cannot be trusted. He is also very shrewd and capable CEO who knows how to run business operations very efficiently and has a great strategic vision for the company which is why I am hanging around. It is sucks that we shareholders have to suffer while he does things to allow the share price to tank so that the company can buy more shares back, and he can then take it private. I just hope if we hang around until the end that we will get properly rewarded on the purchase price for the remaining shares not bought back and not get screwed again like almost happened during the failed Goldman merger.
I agree and think the action is not buying, but is instead nervous short covering. I would not want to be short here at these levels going into earning's release. Unless something very surprising occurred this quarter, I think it is clear that the company will have very good to awesome earnings because RR pretty much indicated so during the last two consecutive earning's releases which were terrific and where guidance was raised both times. All of the downward pressure since last earning's report was low volume short games which were nothing more than manipulation the shorts were able to achieve because there was so little interest in the stock based on literally no news being reported the entire quarter other than a small update on the London PPL.
or (3) painting a negative picture because you mistakenly thought candor would be viewed favorably and indicate that the company is seriously addressing its problems instead of denying or down playing them as it has done before during previous conference calls because you lack the experience and expertise to handle a conference call like this when a company is struggling the way TWTR is.
All good points which is why TWTR is struggling. The problem is the platform, interface, and user friendliness of the service suck. The service is focused on following people instead of topics or events which is why TWTR has not been able to attract a large user base because people like you find it too difficult to easily get the information you want. The platform is just not good enough at screening out irrelevant, bogus, or promotional information and organizing the information in a way which is easy to understand and find. Finally, you cannot get the information that TWTR offers anywhere else for free or even for a fee. There is no where on earth where you will find information in the level of detail and timeliness on breaking events as you will on TWTR. This is undeniable, and all you need to do is ask any journalist this to confirm that reality. Moreover, there is no platform that offers the same level of real time discussion on events as they are happening like TWTR does. This is why every major event promotes its presence on TWTR because there is no other platform that does this nearly as well or which reaches more people. TWTR has some great core competencies which are being squandered because the company fails to make them accessible, easily useable, and reliable for the average joe. It has massive money making potential and great potential utility for the average person, but the company has failed to execute by not making the service useable and useful for the average person.
I am long on the stock, but to think the problems at TWTR were caused by something management said yesterday is very naive and inaccurate. There are some very major and fundamental problems with the platform which is clearly evidenced by the lack of new MAUs and poor user engagement. Nothing management said yesterday caused these problems which have existed and grown worse over the last couple of years now to the point that the masses in the U.S. have pretty much given up on the platform which is shown by the complete lack of new U.S. MAUs in this quarter's results. The problems at TWTR reach all the way to the core of its business, and to be fixed there needs to be a major overhaul of the entire platform. Changing mangement alone will not solve these problems without a complete change to the platform.
That is not why the stock tanked. The stock tanked because both Dorsey and Bain repeatedly said that implementing this vision and fixing the problems is going to take a long while which is not the kind of thing investors want to hear. Also, there has been a lot of commentary that Dorsey has his head in the clouds in terms of his vision. He made comments that he envisions TWTR to be the first place most people go to each morning to check and see what is happening in the world. A very grandiose goal which many feel is grossly unrealistic and demonstrates that management still does not understand realities and TWTRs core competencies. I read an article today that likened that comment to other comments made by the Board and prior officers several years ago when they claimed that TWTR would have billions of MAUs by now. The company needs to stop dreaming and get a firm footing in reality and not try to make TWTR the most important social network on the planet and instead just a viable one which is very good for certain things. No time for dreaming and now it is time for swift action and realistic goals before the company goes out of business.