Since we won't know for another month, I thought I would engage in some WAGing about 4Q numbers to pass the time.
I find the timing of this private placement interesting. Done the first business day of a new quarter, the timing suggests it could have been done last quarter if that suited the parties' interests. If KVHI had a money-losing quarter, the dilution created by the private placement would actually decrease the EPS loss. (I suspect this accounting trick is precisely why AMZN repriced its employees' stock options a few months ago, but I digress). Accordingly, if KVHI had a money-losing 4Q, it would be a great thing to dilute the shares a little at the end and use a larger number for the EPS calculation, thus minimizing the loss from a per-share perspective. But KVHI didn't do this. This suggests that KVHI, at a minimum, had a break-even 4Q. I know this was the forecast, but given the weaker economy, I was unsure of the effect on the consumer products, which still make up a significant portion of revenues.
Back to lurking.
RK |
