RE:RE:RE:RE:RE:RE:Another sunbstantial reveue stream in Brazildqma says:
I guess the downside is that this business model is pretty capital intensive and they had to sell their canadian business to finance it?
Well, the share price has taken a beating over an accounting error a few years ago, and then the lack of growth in the canadian pre-paid market. They have topped out the Canadian business; the only way they can get more business is to take from the competition, which will reduce margins. The cash here will fund the growth in Brazil, which is bing symied by lack of cash flow.
Until they have solid relationships with suppliers, they will not be granted credit...it takes more time there than here.
And...I understand for their other international market they are trying to move away from this business model to more like a licensing model, which will require less money upfront but also lower margin?
Actually the licensing model is exponentially higher margin.
And way better for cash flow b/c they are not inventory-ing stock.