What's interesting is that EZCH disclosed this important nugget at all. It has generally avoided any news that might hurt the chances that the deal goes through. Quite the opposite, it has accentuated any risks.
It might be that the company knows it can't sit on this news very much longer and will have to disclose it since it's material. My guess that it will be announced formally soon after the deal's deadline. That's not a bad strategy since it the deal is voted down then there is some good news in the wings that would support the SP, maybe even drive it up.
Medium-term, I could see the company instituting a small dividend, maybe 1%. That would cost it just a fraction of its' free cash flow, and open up an entire world of investors who only consider dividend-paying stocks. If we can get the SP to about $32-33, then the market cap would reach $1 billion, which opens up another group of investors that will only consider larger companies. I could see the SP in the $40 range within the year as an independent company. That's also why I think it would take about $40 to acquire the company today (bird in the hand...).
But not $25.50. I know there's honest disagreement about this, which is why we are having a shareholder vote to decide. The current SP is below $24, which tells me that the market thinks the deal will be voted down. If so, we may touch the SP when the deal was first announced but I think the prospect that EZCH has secured design wins with three of (Amazon, Google, Microsoft, Facebook, HP, IBM and Rackspace) will support the SP until the exact wins are confirmed.
GLTA
-S |
