NYX GAMING GROUP LTD 11 PCT DEBS V.NYX.DB

RE:Davey, don't cut anyone until the 52 new clients are running

[stocksnbonds]

HowdyBob, I respect your posts. The financial analysis is lacking though. The licensee growth is great. It come with a cost. At what point does the marginal incease in revenue override the larger increase in costs? Larger revenues alone do not make a company profitable. The increase in revenues would have taken place regardless assuming the casino and OB software is as good as the industry says it is.

NYX is over staffed by a wide margin. The older CRYP/CWH divisions were written down in November as NYX paid too much for them. What are those people now doing as the NYX OGS/OPS platforms were perfectly fine and supported well without the purchases. How about the other spending sprees the company has been on. I really don't have a handle on the additional accummulated business from these purchases. I'll say this though..... they were absolutely NOT worth the goodwill on the ledger. 

NYX needs to hit its margins. They could have handily hit 30% EBITDA. Closing a couple of centres, redeploying employees rather than new hires would have done the trick. Heck, they can still hit 35-40% EBITDA EASILY just by cutting 5% of their workforce. Management for some reason does not care.

I first thought in November that Davey was purposely letting the shareprice slide in order to take it private. I'm back onto the thesis. We've all seen companies falter due to unckecked growth. This is about to be the case. Until NYX can pound out some profits to pay its debt, NYX is toast. I would rather NYX start ASAP rather than at the last minute when theu are forced to do so. 

A higher SP= currency. So much can be done. Right now, Davey is playing a dangerous game with a company that by all rights should be over $10. This guy is like the Donald Trump of online gaming only not as rich. He's just doing his own thing not caring about other vested interests notably the SHAREHOLDERS who propped up this company so he could go on his purchase binges.

One last point, I thought Davey was a 20%+ shareholder. He's only at 10-12% as I recall from a couple of posters on this board. The key shareholders now are Stars Group (Formerly AYA), WH, Skybetting. They will have the largest shares of the company once most debt is converted to shares. Together with Davey, they currently control well over 60% of the company. If the company goes bust, it's the bondholders who get the rights on the software source code. I think that Stars, WH, Sky would love to have their own private use of the current software. Currently, my understanding is that NYX still has WH and Sky as bondholders. Not sure of Stars-- if they've converted all their shares. Can someone confirm??

In any event, what seems to be a no-brainer in cutting costs-- MARGINALLY-- thereby making NYX profitable, is not taking place. Just the opposite, NYX will hire upwards of 100 MORE staff to start on a new OB software platform. Am I missing something?? Seriously, am I out of touch?

sb