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Strategies & Market Trends : Turnarund Investing

NOVS 0.0666

-16.0%

Aug 1 5:00 PM EST

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From: maiaturnaround	3/12/2012 10:22:53 AM
	4 Recommendations of 1876

I see this as just another MAJOR INSIDER INVESTMENT. The bashers suggest that the $125M valuation placed on Streetlinks by Novastar is either throwing away money or lining the pockets of their friends. The truth is that this is another MAJOR INSIDER INVESTMENT in a company that has already seen significant insider buying. 15% of Novastar is owned by insiders who had to approve the $125M valuation. As much as $1M of the $6M paid for Steve Haslam’s share of Streetlinks is THEIR portion of this purchase. This would indicate that they were very CAREFUL and CONSERVATIVE in their valuation. Another way to look at it: Steve’s share, which is payable in installments, will cost $500K this year and next. If SL nets $15M this year, we earn an extra $250K NET, AFTER paying him. By 2014, the payment doubles to $1M each year. This seems to project that Streetlinks business is expected to double again in two years. Another sign of that EXPONENTIAL growth we keep hearing about!

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