Over the last five quarters, the company’s cash and marketable securities have declined by roughly $120 million to $554 million, a balance which would last 23 quarters or almost six years at that rate.
In its Q1 conference call, ELNK guidance indicated that net cash burn for the remaining 3 quarters of this year, after CAPEX and subscriber acquisitions, would be in the range of 20-30 million Dollars. Current cash balances would last 55 quarters or almost 14 years at the high end of that rate.
Within the cash burn estimate was subscriber acquisitions of 40-50 million dollars for the year, assuming they could be acquired in the range of $150-190 per subscriber.
Internally generated growth, according to mgmt, costs ELNK about $195 per new subscriber.
By my calculations, the market is currently valuing ELNK, net of cash, at less than $150 per subscriber and putting no value on the infrastructure and extremely valuable contractual relationships with telcos and cable companies.
ELNK directors should IMMEDIATELY approve a share repurchase program, allocating at least $100 million to buy back stock. |
