Mkel,
Here's a long one for you. Please grab a seat. Tescorp's F1Q numbers were excellent, yet we couldn't take advantage of a sharp uptick in share price because the Company remains in the "quiet period." (Just read the press release if you don't believe me. It was very dry). I was told that the Company is not allowed to talk up the stock until the SEC completes its analysis of the S-2 filing (which could take a month or so). It looks like all systems are a go but we're going to have to hang in there a little longer. Anyway, 1Q revenues blew right past the $6 million mark to $7.1 million, $1.6 million more than the Company ever announced in one quarter. As for system cash flow, it almost doubled from the previous year's first quarter, rising to $1.1 million from $608,000. Mkel, believe me when I say this. If my guess is correct and a debt deal is announced in the not-to-distant future............and.............the quiet period ends in a timely manner.........THIS STOCK WILL EXPLODE. I am just as disappointed as you are (maybe more so) but I am feeling more and more bullish every day. Let's recap. (1) Tescorp announces an equity deal raising $33 million or so. Some of the proceeds will be used to eliminate ALL REMAINING DEBT from the balance sheet. The remainder wil be used to acquire new systems or upgrade existing systems from 300 mhz to 750 mhz. Either way, THIS INCREASES SHAREHOLDER VALUE. (2) If my guess is indeed correct, TESC announces a "debt" deal of some kind (you guess the amount) that enables the company to leverage off its balance sheet. Because the company has NO DEBT presently on its balance sheet, the Company can expect to receive a favorable interest rate from the lender (Wouldn't it be great if they borrow from another firm, thus getting more analyst coverage out of the deal). Even if this idea doesn't pan out, so be it. The company can go back to the market at any time with a pristine balance sheet for extra financing. (3) TESC reports a blockbuster quarter, yet no one realizes it because they cannot "trumpet" the story. The Dow Jones people only report the EPS losses of a cable company, they should be focusing on system cash flow. THIS IS HOW A CABLE COMPANY IS VALUED WHEN IT IS PURCHASED BY A COMPETITOR. You can bet Prudential's investors that are being targeted for the offering will know about the quarter results. Melissa Cook at Pru thought TESC was worth $7 per share BEFORE this news was announced. (4) The S-2 stated that Tescorp was ready to exercise an option to purchase a $2.6 million system in the Neuquen Province of Argentina. I believe this is in western Argentina and would be a great fit with the existing Bariloche system. Great news release coming up. Anyway, in summary. Even if one of these "deals" do not occur, I believe we will soon be "high-fiving" each other through the Internet. What do you think? Am I being too optimistic or does it make sense? |
