FYI: The latest from nick chinn's web site:
"More on the Boca Purchase of GV Modem Business
4/6/98
Is it really such a bargain?
O'Grady's PowerPage, a website that deals with Apple PowerBook and related Apple news, pondered today:
"Global Village posted a press release detailing their acquisition by Boca Research. This whole thing leaves us wondering why would a company with US$68MM in revenues last year (nearly all of it from modems) sell their modem business for US$10MM? Do you have the answer?"
Look deeper (do your research)
The ten million does not include "assumption of certain liabilities" as the press release says. This could be a lot of money, or not. At the very least Boca probably has to assume all accounts payable (which includes things like my 250 hours of accrued vacation time).
The third quarter results GV posted on January 22, 1998 showed a net LOSS of $2.3 million on revenue of $49.2 million. Fiscal year-end results ending March 1998 have not yet been released. Some of the income was from divestment of corporate acquisitions: $1.6 million in Q2 and $1.3 million in Q3. If you subtract those sales, GV actually lost $5.2 million over the first three FY quarters.
So Boca spends $10 million for $68 million in revenue that loses lots of money, plus takes on things like salaries, payables, site operation costs, trans-continent business management costs, etc. Investors who are complaining they got sold down the river have not figured this out. And remember, Boca only buys the modem business from GV -- not the OneWorld Mac business, FaxWorks Pro LAN, and the unannounced-but-hinted-at network product which the revamped company is going to make. Boca bought only half the company, in effect. This is pretty obvious when the press release says Boca will retain 50 GV employees. The other half are working on the network products.
So investors are still griping about the proposed sale, and I surmise the gripes are about one of two things, or both:
$10 million was not enough for the modem business (we address that issue here)
the resulting network product company is not viable (yet to be seen)
Some investors are crying for another statement from GVIL to further explain the new direction of the new company. Jeez, I thought the press release did just that without giving out actual specs for a product that has not been announced. And I can't give them to you since I am under NDA.
These folks also think the new GVIL has something up its sleeve like a deal with Steve Jobs. Hohoho! When I leave GV/Boca I will tell you more about that one.
This is IMHO and doesn't represent the views of the company, although all financial information is, by law, publicly available." |
