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YLO - Yellow Media Inc


finetrader

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Ubuy2wron,

 

Just an fyi.  I had further discussion with others on ylo.pr.d.  I bought a 5 percent position at about 3.20 average.  Since then it has been my best performer this year.  Whether this lasts or not, at 1.72 dividend for less than two years i would get my money back.  In the meantime I sold down 1/8 of the position at a tidy 50 percent gain.  Sometimes smart, sometimes lucky.  A.

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  • 9 months later...

Anyone looked at the recap transaction?

 

The preferred seems to be a good buy if this plan is  approved.

 

The way I see it:

 

Yellow media should make  500$ ebitda in 2013.

Assign a 3X multiple will give you a EV = 1.5B$

 

There will be 850M$ of debt. So equity would be worth 650M$.

 

There will be 25.8 to 28.4 M shares depending on the warrants.

 

So 650/27= 24$/share of value

 

Buying 100 preferred shares will cost you on today's price : .55X100= 55$ which will give you 6.25 shares of the new company. So you will be paying 55/6.25=8.80$/share. An you get warrants on top of that.

 

So to summarize you pay 9$ for something worth 24$ . This is based on 3x ebitda evaluation. I know very well that yellow media revenues are declining so i'm just not sure what ratio to assign on it.

 

http://www.financialpost.com/markets/company/news/story.html?news=239527809&symbol=YLO.PR.D&id=40081746

 

http://business.financialpost.com/2012/07/24/yellow-medias-recapitalization-campaign-spells-hope-for-stock/

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  • 2 months later...

I bought some preferred and waiting for recap to occur. I think Yellow Media should make between 150-200M$ in earnings in 2013. And by buying the preferred at .56$ this is like getting  the company for about 250$. So in this short term trade that I'm planning to do I think the downside risk is quite low.

 

 

"The hearing for the final approval of the recapitalization by the Québec Superior Court has been set by the Court to begin on October 15, 2012.

The implementation of the recapitalization is currently expected to occur on or about October 31, 2012, subject to a number of conditions, including the receipt of the Court's final approval as set forth above, and to other risks and uncertainties."

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Some new development. Yellow Media reached a deal with the debenture holders. This should help obtaining court approval while by my estimates diluating preferred and common about 3%.

Preferred climbed to .65$ on the news.

 

http://www.theglobeandmail.com/globe-investor/news-sources/?data-ipsquote-timestamp=20121017&archive=ccnm&slug=201210170826747001

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Preferred series 1,2,3,5. -> ylo.pr.a,b,c,d receive all the same treatment under the reorganization plan.

 

Preferred series 7 get a different treatment but i don't think you can trade them on the tsx.

 

Ahh got it thanks... they all trade at around 60-70.  Are the different prices just a matter of low volume / illiquidity?

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  • 1 month later...

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