RE:Guess who's back, back againJoe you always say that and you are always wrong. You guys have been fed EBITDA rubbish since day one. No matter how many times I try to explain it to you and no matter how many credible experts I quote it still falls on deaf ears. That is not bashing. That is being critical. People who are not critical of a potential investment end up living in a cardboard box over a subway crate.
Here, do me a favour. Read this oldy but goody at least 10 times. If you still are not getting it then keep on reading it until you do. Once you do get it then proceed to thier present Investor Presentation and realize that absolutely nothing has changed.
RE:RE:RE:RE:Investor conference call
Well Mully we will have to agree to disagree on this. In my world using EBITDA in a business where the revenues are derived directly from hardware, is nothing short of deception. You would be ignoring that which is responsible for the revenues when analyzing the cost of running that business.
This company does not use EDITDA to enhance a conversation about net earnings...they repeatedly try to use it to replace it. It is like excluding all the costs of a hamburger when analyzing how your hamburger stand is doing. Of course it is going to look good even on the day you file for bankruptcy.
Let me give you a grossly simplified example to make my point. In this example all there is, is the hardware and the money it generates. No other expenses.
Ok, I will sell you a money making machine for $1 million. This machine will last for 10 years before it vapourizes. Now once a year this machine will spit out cash. Ok, now here we go.
The machine spits out $90,000 each and every year. Is that good or bad? Well of course it is bad because the machine cost $1 million and over the course of its life it will only generated $900,000.
In my world the bottom line would show a $10,000 loss per year for 10 years which is an accurate reflection. In the EBITDA world it makes $90,000 a year.
Now my question to you is "Do you or anyone else here want to buy one of these money making machines from me?" Remember it generates $90,000 EBITDA per year so how could you go wrong?
See why you can not ignore the proportional cost of the equipment that is generating the money?...but it seems that this company would prefer that you did do that. Why do you think that is?
The PPS is where it is because most of the market has already figured this out.