Thanks, IS. APGRD is a paging stock, which is a lot bigger company than your typical reverse split situation. Just the same, it looks like the stock price dipped below $1 earlier this year, so that is probably why they did the reverse split, so that they stay above the $1 listing requirement for Nasdaq.
I'll try to check the valuation. It's a paging stock, so we can compare it to its peers: Paging Network, AirTouch Communications, Inc., Metrocall, Inc., PageMart Wireless, Inc., and Skytel.
A couple of years ago I shorted paging stocks, so I know this routine. Here we go:
The companies are all quite large, and have lots of debt. You can value them on the number of subscribers. The stocks tend to be highly correlated, so there might not be a tremendous shorting opportunity for picking just one of these stocks, vs. the whole sector.
Paging Network (PAGE) is the biggest. It has 10 M pagers in service, and an enterprise value of $1.8 B long term debt + $0.4 B market cap = $2.2 B. That puts a value of $220 k per customer. They did the merger with Mobile Media, which is similar in size, so I don't know what the current value is.
Pagemart (PMWI) has 2.5 M pagers, and an EV of $1.6 B debt + $0.2 B market cap = $1.8 B. That works out to $720 k per customer.
Before the merger earlier this month with Mobile Media, Arch Communications (APGRD) had 4.3 M pagers, and EV was $1.0 B LTD + $0.065 B market cap = $1.1 B based on todays stock price. That is $255 k per customer. (I haven't taken into account the Mobile Media Merger, or any other merger, which probably affects this calculation.)
APGRD has issued a lot of new shares recently, because of the merger. I don't know how much the selling of these shares might impact the stock.
I tried shorting this a minute ago, but my order was cancelled. I assume there was no borrow. |
