RE: Earnings tomorrow
Now i am wondering if YLO management can dream up more ways to make the Q results look terrible. If i am not mistaken they have eliminated all goodwill with the ast writedowns. Desite having a huge customer base, ( for advertisers likely the biggest in Canada) they have been pegged by analysts and by themselves as worthless.
Goodwill on the balance sheet represents money that YLO paid for acquisitions over and above the book value of the assets. By writing that value down to zero, YLO is saying that these acquisitions are no longer worth more than the value of the underlying assets (as most of us would agree they never were). YLO isn't saying that its brand name and customer base are worthless.
If this Q results show that rint decline has abated , and cashflow and earnings per share remain consistent, watch out. This could have a huge jump. Worth a small gamble again.
One of the good things about buying a widely hated stock is that any hint of good news can cause a big jump in the stock price. YLO management must have had a good idea what the numbers we'll see tomorrow would look like when they were negotiating with the MTN holders, so I don't expect any good news tomorrow.
Banksters would love to steal this business from the shareholders, and that may be one reason why they are balking at the recap deal, BUT in the same breath, saying they wont extend some of the maturities on some of the debt to make YLO's future workable.
Bradford thinks the proposed deal would steal the company from the shareholders. (Which is why the share price more than doubled?) The banks are trying to block that deal.
The banks have never said they won't extend the maturity on their debt. They have indicated they are open to some sort of deal, but haven't indicated what concessions they are prepared to make.
Wonder how a judge would look at the bankers actions....
The banks lent a bunch of money to a blue chip company with an investment grade credit rating and now want to get their money back as specified in their legal agreement. If it was your money, you would want the same thing.
The MTN holders who negotiated with YLO seem to have been a bit too greedy for their own good. The bankers haven't made their play yet. It will be interesting to see how reasonable or unreasonable they will be.