With the new financing, $210 million, and 15% interest Vonage, under this deal will have Interest charges of $7.875 million a quarter.
LAST QUARTER ($254 at 5%) Vonage had an interest expense of $3.175 million
So we will see a $4.7 million increase in interest expense rer quarter.
About $.03 a share difference - using 156 million shares
Since they reducing debt by $50 million and will pay fees (if Ike is right) of $24 million - they will lose 5%(??) interest on 75 million - about $937 thousand a quarter or $.006 a share.
So the financing costs and interest differences will cost about $.04 a share per quarter from what was before!
So before you listen to the naysayers, look where this company was, where it is now, and what was gained for that $.04 a quarter per share!
And that $7.9 million interest payment can be compared to $224 million revenues quite nicely.
WHERE THIS COMPANY WAS and why PPS is Price/Sales (ttm): 0.29
Vonage WAS beaten down by MAJOR problems that have been solved in the last months!
These company existance threatening problems, were rightfully exploited by Short selling, which has been a major factor since VG, a company that, with no earnings, came out for $17 a share IN 2006, just a little over 2 years ago.
LAWSUITS, Injunctions to stop their business, the threat of banckrupcy, and the shorting (some say 50% of the float) all brought PPS to the $1 to $2 level.
Many of the media STARTED AND STILL START EVERY article they write about Vonage with: "The troubled Vonage" or "The Spiraling Downward Vonage".
And DOWNGRADES - all worked together to make anybody reading this AN INVESTMENT OPPORTUNITY!
THERE HAS BEEN A CHANGE, SINCE VG DEBUTED, AND IN THE LAST MONTHS, AND IT IS POSITIVE!!!!
Jeff Citron COB said that Vonage has "TURNED THE CORNER"
It has gone from a existance threatened company, to a GROWING, $1 billion revenue projected next year, company, with a SMALL long term debt in relations to its revenues!
* THE LAWSUITS ARE SETTLED
* THE DEBT IL-LIQUIDITY THAT THOSE SETTLEMENTS CAUSED, SOLVED BY THE REFINANCE.
* REVENUES, CUSTOMERS HAVE CONTINUED TO GROW DOUBLE DIGITS, YEAR OVER YEAR FOR 21 QUARTERS, WHILE WORKING THROUGH THEIR PROBLEMS.
* VONAGE HAS BEEN ADJUSTED CFP, LAST 3 QUARTERS.
* VONAGE HAS HAD POSITIVE ADJUSTED OPERATING INCOME LAST 2 QUARTERS
* ON TRACK FOR PROJECTED $900 million Revenues this year, and $1 Billion Next
* NEW PRODUCTS AND SERVICES ROLLING OUT!
* Was recently awarded their first patent!
* Bear Sterns and Citi recently upgraded
After everything in the refinance is completed,(and perhaps before)we will see movement.
The reasons that the PPS should be a MINIMUM of 1X revenues/share ($5.50)
REVENUE and SUBSCRIBER CHARTS:
4Q'05 to 2Q'07
acronet.net
1Q'07 to 1Q'08
acronet.net
POSITIVE ADJUSTED OPERATING INCOME:
acronet.net
NEW PODUCTS AND SERVICES:
acronet.net
acronet.net
acronet.net
acronet.net
VONAGE BROADBAND:
biz.yahoo.com
With the refinance, even with terms that aren't great, but are livable, and effect this company $.04 a quarter per share in interest, - -----
Should this company be evaluated like it has been - as one on the brink of going out of business?
Should market capitalization be one of about 1 quarter's revenue?
Should market capitalization be less than yearly marketing spend?
Expect progress at the earnings CC Thursday
Dave |
