smd123 Posted December 16, 2014 Share Posted December 16, 2014 I would not want to model a decade+ projection for a company like CALL, though you might counter with a 15% discount rate assumption. A couple of questions regarding the model: 1. By Revenues, do you refer to "Gross Profit"? Averaged over 5 yrs (2010 to ttm) are about $130m/yr, against the $83m in the model. 2. Similarly, EBIT over the last 5 yrs averages to $22m, against your assumption of $15m. If you are using assumptions based on the trends in the very last quarter (or 2), I want to point out 2 things: (1) The last quarter is the bottom of their cyclical working cap cycle. They did not push out devices of MJ Plus for new sales, released a new product (MJ Go), spending more on marketing. Rev from new device sales was $3m vs $12m last yr. Also, they incurred ~$2.5m impairment charges in relation to a non-compete agreement with founder, who recently died. (2) In the latest earnings call, it was mentioned that new devices (MJ Go) are now on shelves and Amazon, and 84k were sold in October. That is $4.2m for October, or ~$12-13m for this quarter. I wouldn't even extend this quarter 10 years forward, for the same reasons I mentioned above. However, next quarter should see the effect of these numbers showing up in financials, and 2015 will record any and every cent they make/lose with Telefonica. Though I am not fully convinced about the bull case, I do think that the market is pricing them for the worst of their working capital cyclicality, assuming no upside from Mexico partnership, and discounting the value of cash. It is a cigar-butt with a lot of pessimism surrounding it. However, it is also a cigar-butt with no debt, high cash (57%) and good cash flows. Link to comment Share on other sites More sharing options...
crastogi Posted January 15, 2015 Share Posted January 15, 2015 I think it is worth a look. Not understanding their business in detail but going purely by financials. (I have spent less than 15 min on this so far - so i may be way off base) Basically at today's price we are saying business is worth $3/share ex cash. If the business gets any kind of traction it is at least a double or triple from here. If it does not, cash provides a floor (at 4.50), provided management does not do something stupid. My only concern is the heavy short interest, and with so much cash on hand, why does the management not buy back stock? thanks for bringing this to the attention of the board. Worth checking out in detail. Looks like tilson bought at much higher prices Link to comment Share on other sites More sharing options...
sleepydragon Posted January 15, 2015 Author Share Posted January 15, 2015 I am still holding this stock. I use MagicJack at home. It's pretty good. I am paying like 10 buck/year. It does have some problems: when people call me, the calls do not always go through (15% of the time they will reach voicemail). So i think this is limiting their customers to retail clients only. I also feel there's a lack of direction from the management. No news, no update, no new products. I mean, I hope these guys in Israel are doing something! Link to comment Share on other sites More sharing options...
Jurgis Posted January 15, 2015 Share Posted January 15, 2015 I mean, I hope these guys in Israel are doing something! They are listening to your calls! 8) (Sorry, just a joke, no contribution to this thread :)). Link to comment Share on other sites More sharing options...
philly value Posted January 21, 2015 Share Posted January 21, 2015 Figured CALL might be due for a bump given the fall over the past week. At $7.05 per share, the market is valuing the business at $50M. Link to comment Share on other sites More sharing options...
sleepydragon Posted January 18, 2016 Author Share Posted January 18, 2016 I am thinking to back up truck on this name. Mktcap is only 124m, but they have 80m cash and no debt. Generating about 25m cash flow annually. Any opinions? Link to comment Share on other sites More sharing options...
PatientCheetah Posted January 18, 2016 Share Posted January 18, 2016 what would a rational person in your situation do? do a thought experiment and pretend that you don't have any shares Link to comment Share on other sites More sharing options...
Patmo Posted January 18, 2016 Share Posted January 18, 2016 My plan on this name is to wait for mkt cap to hit cash level then take a chance on the "free" cash flow stream. Not convinced enough to take action beforehand Link to comment Share on other sites More sharing options...
WeiChiLoh Posted January 18, 2016 Share Posted January 18, 2016 cash on the balance sheet is fictitious. this is the problem with secular declining negative WC companies. as the business decline, cash winds down. Link to comment Share on other sites More sharing options...
sleepydragon Posted January 18, 2016 Author Share Posted January 18, 2016 Its cash has been increasing though Link to comment Share on other sites More sharing options...
writser Posted November 9, 2017 Share Posted November 9, 2017 https://globenewswire.com/news-release/2017/11/09/1178597/0/en/B-Riley-to-Acquire-magicJack-VocalTec-Ltd-for-8-71-Per-Share.html Link to comment Share on other sites More sharing options...
writser Posted October 8, 2018 Share Posted October 8, 2018 Price is getting interesting .. I've bought a few shares. Link to comment Share on other sites More sharing options...
movys Posted October 8, 2018 Share Posted October 8, 2018 What has driven the decline since august? What regulatory hurdles are left and why have they taken so long? When do you expect the merger to close? Link to comment Share on other sites More sharing options...
Hielko Posted October 8, 2018 Share Posted October 8, 2018 * FCC approval is only regulatory hurdle left * I'd say the decline is because the completion of the deal is running behind schedule... fear is of course that FCC approval isn't coming. Link to comment Share on other sites More sharing options...
writser Posted October 8, 2018 Share Posted October 8, 2018 Yeah. DOJ, FBI are ok with the deal, super small company, not even close to a monopoly position and an American buyer. I don't see why the FCC would block this deal. Maybe the delay is caused by some archaic processes that this deal has to go through as MagicJack is perhaps treated as a carrier? Just speculation on my part. We're getting nearer to the November 9 end date and there is no reverse termination fee so maybe the market is worried the buyer will cancel the deal. But the company looks reasonably valued and the takeover premium wasn't that high to begin with so downside looks somewhat limited. Apart from that: no special insights. Reminds me a bit of the EGC merger - bit of panic without any news. Small position, DYOR. Link to comment Share on other sites More sharing options...
LightWhale Posted October 11, 2018 Share Posted October 11, 2018 Price is getting even cheaper, 7.72. Assuming the acquisition goes through, that's a 13% spread. Link to comment Share on other sites More sharing options...
walkie518 Posted October 11, 2018 Share Posted October 11, 2018 Price is getting even cheaper, 7.72. Assuming the acquisition goes through, that's a 13% spread. Should CALL's profits or revenues decline substantively, does B Riley have the right to walk and if so is there a penalty? Link to comment Share on other sites More sharing options...
LightWhale Posted October 15, 2018 Share Posted October 15, 2018 My understanding of the proxy is that A) there's no termination fee on the side of the buyer, only of the seller And B) if FCC approval is not given by the 9/11, both parties may abandon the merger agreement without being held liable. Will appreciate other opinions. Either way, I'm not aware of any apparent reason for B.Riley to walk away from the merger. They consummated similar deals in the past for the sake of cash flows, and going through their earning calls, I could read nothing between the lines about changing their minds on this one. The financials of MagicJack haven't deteriorated significantly, plus B.Riley's managers will be hard-pressed to blemish their reputation by admitting a mistake and incurring sunk costs. Then again, by the price action I'm obviously missing out on something. What do you see as the reason for the stock price going down? Link to comment Share on other sites More sharing options...
walkie518 Posted October 15, 2018 Share Posted October 15, 2018 My understanding of the proxy is that A) there's no termination fee on the side of the buyer, only of the seller And B) if FCC approval is not given by the 9/11, both parties may abandon the merger agreement without being held liable. Will appreciate other opinions. Either way, I'm not aware of any apparent reason for B.Riley to walk away from the merger. They consummated similar deals in the past for the sake of cash flows, and going through their earning calls, I could read nothing between the lines about changing their minds on this one. The financials of MagicJack haven't deteriorated significantly, plus B.Riley's managers will be hard-pressed to blemish their reputation by admitting a mistake and incurring sunk costs. Then again, by the price action I'm obviously missing out on something. What do you see as the reason for the stock price going down? I agree with all of your points. That said, a buyer has access to financial information that is better than what GAAP provides so I speculate that the market believes that the deal does not go through not due to antitrust, but that there has been a material decline in something that doesn't show up in the GAAP statements on a forward basis? Maybe it's just timing? At the same time, this might be an interesting risk arb play should B.Riley still be interested in closing... Link to comment Share on other sites More sharing options...
Jurgis Posted October 30, 2018 Share Posted October 30, 2018 Sold. Thanks for idea. Link to comment Share on other sites More sharing options...
writser Posted October 30, 2018 Share Posted October 30, 2018 Sold as in: I'm sold on the idea? Or as in: I just sold my stock. If so - may I ask what reasons you had for that? Link to comment Share on other sites More sharing options...
Jurgis Posted October 30, 2018 Share Posted October 30, 2018 Sold the stock. I don't see FCC approval: https://www.fcc.gov/news-events/headlines but maybe I missed it. Price moved up. I don't want to hold and see what happens if FCC does not approve by 11/09. I'm probably wrong. 8) Link to comment Share on other sites More sharing options...
writser Posted November 6, 2018 Share Posted November 6, 2018 https://globenewswire.com/news-release/2018/11/05/1645505/0/en/B-Riley-Financial-Reports-Financial-Results-for-the-Third-Quarter-of-2018.html Riley added: “We have returned a total of $0.58 cents per share in dividends to our shareholders through the first nine months of 2018, and our recent share repurchase announcement follows our previous buyback of approximately 950,000 shares earlier this year. We continue to work towards obtaining regulatory approval to complete the magicJack acquisition and remain enthusiastic about the multitude of opportunities ahead of us.” Link to comment Share on other sites More sharing options...
hillfronter83 Posted November 6, 2018 Share Posted November 6, 2018 https://globenewswire.com/news-release/2018/11/05/1645505/0/en/B-Riley-Financial-Reports-Financial-Results-for-the-Third-Quarter-of-2018.html Riley added: “We have returned a total of $0.58 cents per share in dividends to our shareholders through the first nine months of 2018, and our recent share repurchase announcement follows our previous buyback of approximately 950,000 shares earlier this year. We continue to work towards obtaining regulatory approval to complete the magicJack acquisition and remain enthusiastic about the multitude of opportunities ahead of us.” Thanks for the update. I like that price drops on the news. Added a few shares. Link to comment Share on other sites More sharing options...
writser Posted November 7, 2018 Share Posted November 7, 2018 Looks like your timing was impeccable. As far as I can see FCC granted approval. $8.62 bid premarket. Deal will probably close in a few days / weeks. Crazy price action the past few days. The whole deal took a lot longer than expected and I'm glad I didn't end up buying late 2017 / early 2018 when the spread was ~4% for an anticipated closing in a few months. Easy to say in hindsight of course (though I did bump this thread), but I think that below $7.50 this was a very good buy last month - there was no indication at all that the deal would fail whatsoever and the company didn't look very expensive intrinsically either. I bought a decent position and (unfortunately) sold a few shares on the way up. Despite that it's still difficult to pull the trigger because if a simple deal like this suddenly starts trading at a ~15% discount there's always that nagging feeling that other market participants know way more than you do .. Link to comment Share on other sites More sharing options...
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