Service Properties Trust T.SVC

RE: RE: RE: RE: SVC

[caramel55]

good point bigcap.  If history is any indication, prior to the end of Q4, SVC will send out another news release about how many customers they've won over, fixed or wireless and the specific regions for the quarter.  Problem is we don't get any more detail - size of new customer, when revenue will be recognized, amount of the contract, etc. I understand some of this information may not be made public, perhaps for strategic and/or privacy reasons.  But one generally does not know what impact it may or may not have on SVC's quarterly/annual reports.  On the other hand, if SVC won a major customer with a huge # of subscribers and communicated this to investors, that would likely increase the SP.  If/until then, investors are just guessing revenues will match/exceed expenses.  

I think last quarter they won a major Euro customer with a large # of subscribers.  But we don't know the amount of the contract, when revenue will be recognized, etc. and I don't think this didn't really move the share price.  If I recall correctly, Caputo or Hamilton mentioned SVC didn't recognize any revenue for that specific euro customer win for the last quarter.  So what the market may be telling SVC is SVC will probably generate similar amounts of revenue for the next quarter as it has for the past few quarters, but the market doesn't expect any surprises in revenue numbers.  

I agree with you bigcap - SVC must show it can make a consistent $1 quarter in and quarter out but when would this trend start?  2010?  2011?  2012?  That's a heck of a long time in the tech world and who knows what the economy will look like then.

And while SVC has a strong cash balance, they haven't taken on any debt.  I'm a big proponent of not taking on bad debt, especially where and when it's not needed, but perhaps, quite simply, they aren't taking on any debt for the simple reason they cannot generate positive cash flow at this time.  They continue to use their currently strong cash position to offset their losses.  SVC is still in it's early stages and regulatory/legal issues sure haven't helped its growth.  

I don't know if SVC has products or will develop cash cow type products - products that generate solid revenue quarter in and quarter out without blinking and this would likely need to be on the software side of the equation.  

If we take away SVC's cash position obtained through sale of its shares when it was around $6 or $7, SVC has a long way to go before it proves itself, if it does at all.