RE: RE: possible take out candidate "If" is the biggest word in the english language. "If" there was due diligence for the businesses that were purchased, "if" there was some sort of integration strategy that were able to capture synergies, "if" there was a buyer that wanted the MME business that they apparently can't unload and "if" there was operational ability, there may be a great investment here. However, the numbers bleed bright red, and I quote "Loss for the year from continuing operations 2012- (25,164,000) 2011 -(52,261,000) 2010-(21,615,000)"
This reminds me of the old joke:
Q: How do you make $1million in the retail media business?
A: Start with $500 million!!!
However this seems pitifully worse.
This is an annuity like business that should be able to realize a profit WHILE leveraging its critical mass, synergies, cashflow and the barriers to entry. However, it will be at least two to three more years until there is any sort of turnaround and that is a very big big "IF" There are quite a few things that are going to fly in the face of what they could have so easily leveraged other than what I previously mentioned, such as content (which is now going to get even more expensive and erode margins more because this is now one of the only viable revenue streams for the major publishers and rights owners), retail footprint (which could be their only saving grace, however is open to XM who already has traction at retail and many more ready, willing and able sources of audio & video delivery)
With the amount of press and "hooplah" that has been going on, not to mention the Undercover Boss hail Mary, I would have expected that operations and synergies were well on their way to being realized and that MME would have been dumped or shuttered by now as they promised when they discontinued it.
Assuming that they are able to offload the boat anchor (MME) which seems to be next to impossible now, it doesn't alleviate the fact that they are still facing a massive debt load and a seemingly flat, saturated business that for most of their business barriers is an internet connection.
Not to be disrespectful, but the comparison to Telus - Clearnet is so so far away...from what I've seen, I would liken it to Rubbermaid/Newell. Premium prices paid for businesses that never reached their promised synergies and destroyed shareholder value, while the principals got very rich brokering these deals on the backs of the investors. (for which I am one, although..... I hope I'm wrong)
As per the investor call, it makes perfect sense that they aren't going to do any more acquisitions...they have no more runway from the banks OR shareholders. They are WAY too heavily leveraged and no cred from the street.
Maybe they can find the poor guy who did the $27MM bought deal at $4.12 and dupe him again...I have some stock for him if he's interested!!!