TEL.TO - Tellza Communications

[Nassau]

Tellza Communications

[yadayada]

So basicly they turned into an international calling and texting business now? I dont get their old business model.

 

I dont get what their moat would be, and how exactly they make international calling so cheap.

 

The presentation looks kinda amateur, they dont clearly explain what they do, and they are pitching their company as an undervalued investment. So those look like red flags so far.

[yadayada]

Well for all I know they will be reduced close to break even 2 years from now, because it looks like a commodity business.. How can they provide calls cheaply? Dont apps like whats app and skype compete with this? What exactly is that management business they bought together with Tel3 and what is their moat, What will be their margins like in 3 years? There isnt much info on their site or in their statements.

 

Allthough it looks cheap at first sight.

[yadayada]

I agree that it looks good at first sight, but i have some questions. Not saying its a scam.

 

1. What does their  B2B sms service do?

2. How are they going to turn that paid voice business around? Former management milked it, and they want to put it in growth mode. Paid voice is in decline, and if the majority of profits will come from this, then why shouldnt this deserve a low multiple?

3. How is their international calling service so cheap? Why can't I buy a vodafone prepaid card that is this cheap? 2c per minute from Brazil to Germany sounds pretty damn cheap. You plug it in a modem or something like those magic jack things?

4. already read that thing you posted, but they dont really go into detail how their business works. If this is as great as you say it is, better understand how it works and buy a large position, rather then gambling with a really small one?

5. Any idea what profits will be by segment in the next 2 years?

 

I supose itmight be worth while to call up management and ask.

[libor.plus1]

It's a technology intensive business that is controlled by management.  Management is buying stock.  They are buying back stock http://canadianinsider.com/node/7?menu_tickersearch=TEL+%7C+Tellza+Communications

 

What more do you need to know?

 

Nassau, I almost feel like this amateur response, combined with your 8 posts places you as a proxy/employee of TEL. There is such a lack of analysis on your part, its almost breathtaking. Also, what does being audited by EY have to do with anything? Ask John Paulson how much that's worth.

[yadayada]

It's a technology intensive business that is controlled by management.  Management is buying stock.  They are buying back stock http://canadianinsider.com/node/7?menu_tickersearch=TEL+%7C+Tellza+Communications

 

What more do you need to know?

 

Nassau, I almost feel like this amateur response, combined with your 8 posts places you as a proxy/employee of TEL. There is such a lack of analysis on your part, its almost breathtaking. Also, what does being audited by EY have to do with anything? Ask John Paulson how much that's worth.

yeah if you work there at least enlighten us how the business works :P We might buy it, if there is nothing to hide.

[Guest 50centdollars]

It's a technology intensive business that is controlled by management.  Management is buying stock.  They are buying back stock http://canadianinsider.com/node/7?menu_tickersearch=TEL+%7C+Tellza+Communications

 

What more do you need to know?

 

Nassau, I almost feel like this amateur response, combined with your 8 posts places you as a proxy/employee of TEL. There is such a lack of analysis on your part, its almost breathtaking. Also, what does being audited by EY have to do with anything? Ask John Paulson how much that's worth.

 

+100

[Kraven]

You guys are idiots.  I don't work there and am no proxy for the company.  I own the stock.

 

I hope you do NOT buy the stock.  Too bad there's no borrow or I'd suggest you short it so I can buy more.

 

SMH.

 

Come on, don't be like that.  I would like to apologize for some of the other board members.  They are being so mean.  So please don't go off in a huff.  Just turn that frown upside down and don't pay attention to all the meanies around here.

[yadayada]

allthough the lack of transparancy and heavy insider buying makes me want to buy some.

[libor.plus1]

The response has nothing to do with anything other than your analysis or lack of. You found a under valued micro cap? Awesome. Now tell us why you feel its undervalued - maybe use some numbers. Posting that management is buying and they are audited by a big 4 doesn't mean anything.

 

You must realize that probably isn't a good thesis for most people, right?

[jm25]

What is their sustainable competitive advantage over the competition?

[infinitee00]

I don't think I will invest in this company but reading the MD&A I found some red/yellow flags -

 

Revenue increased ~54% in the first 9 months but COGS increased ~64%.  Also, gross margin % decreased from 7.6% to 5.4% . Did not see an explanation for the increase.

 

In October 2013, the shareholders of Tellza approved the acquisition of the assets of AGK Consulting and of Netel Inc. for consideration of 40 million shares from treasury. These transactions were both with related parties. In November 2013, both transactions closed following approval from the TSX, at which time the Company increased the number of outstanding shares by 40 million. These transactions closed in November 2013.

 

They bought back 7million shares in 2012 only to issue 40 million shares to buy a company from a related party ( the increase in shares are not reflected in the MD&A as it was after Q3 EoQ date).

 

 

Account receivables also seems high and growing  ( hope they are not "channel stuffing"). I am not sure they have provisioned adequately for that.

 

With so many unanswered questions, I decided to not pursue this any further.

 

Good Luck Nassau, if you decide to invest ( or are already invested) in this company.

[LC]

Read the MD&A quickly...didn't notice anything that seemed like it could be a competitive moat, and I don't feel comfortable investing in this as a "cigar butt" given the capital allocation infinitee00 mentioned.