"[David] Complicated acquisition. This leads me to believe lots of creative financing as pertaining to stock. [...] it was somewhere in the neighborhood of 4-8 million. Thom also eluded to the fact that this acquisition utilized a good chunk of the "20 million war acquisition war chest".
I am guessing here: possibly 25 mil shares and 15 mil war money was used to close this deal. Anyone care to comment? Please keep in mind that any money sunk into SIM is still 'owned' to 65% by NETZ. And NETZ has control over how SIM uses those funds. David?"
Okay, here goes. THIS IS PURE SPECULATION
Lets look at this company from a purely cash basis. Based on what they told us (press releases) they have at least 20 (or was it 29?) million in cash funded in this BB shell (or had prior to softbank acquisition). There is no way to verify this without financials. But if that was the case, on a purely cash basis, this company would be worth 30-50 cents per share. It would be 50 cents roughly if no preferred were outstanding, 30 cents if the preferred is converted (very rough estimate). This is based on 40 million outstanding shares.
Lets forget about the acquisitions other than Softbank. They are really small anyway as best I can tell gotta be less than 20% of Zulu-tek's total value. Lets say for a second that softbank was purchased with all stock. Softbanks parent company retains 35% equity. Thus there is no way that the parent company holds more than 15 million of Zulu's stock (40 million outstanding shares * 35%). Prior to the Softbank acquisition, S&P was reporting that ZULU had 30 million outstanding. If they now have 42 million, is it possible that ZULU gave Softbanks mother 12 million shares and some cash?? Ok how much cash?? Using the assumption of ZULU having 20 million in cash, if they gave 12 million shares (12 mil * $.4 = 4.8 million) or 4.8 million in stock, and assuming that they spent most of 20 million on the Softbank acquisition, they would have had to give roughly another 15 million in cash. Were pretty sure they didn't spend all of the cash and that ZULU has some value prior to the softbank acquisition (they already had Echomedia) lets guess that ZULU paid Softbanks parent 10 million. Thus ZULU would have effectively paid $15 million in stock and cash to buy Softbank. These numbers could be greatly skewed based on how much debt they acquired with the company.
Bottom line on the "guessing" I vote for 12 million in stock and 10 million in cash to buy Softbank.
There is obviously tons of holes in my above theory, but hopefully someone more astute than myself can build from the above starting point.
One last thought, this stock should not trade for less than what its cash is (providing no debt) aka "book value". If it were to trade for less than its "book value", then the original venture capitalist would buy all the shares back on the open market, and take it private. Then they would own 100% of the company and have the extra cash to boot. |
