RE: RE: RE: RE: Dex One Results October 25 monzie, you again are focusing on the past, and not on the future. What matters is not that it is down 90%.
it is clear to me that the understanding that i am trying to pass on to you is not sticking, and this will be my last attempt. perhaps phoenix or someone can break it down further.
What matters is... what is the enterprise value to buy a company, and what are the owner earnings that you get to keep if you own the entire company for 5-10+ years.
Yellow media post recap is a debt/ebitda of 1.3x. Note that the debt/ebitda for idearc was 9.0x when it filed chapter 11. Note that the debt/ebitda for SPMD and DEXO is 3.0x ballpark.
Yellow media surely is poorly managed, they could come out of this recap with debt/ebitda of 2.0x, but the issue is the market price of the debt. recaps tend to deal with market prices of debt and frankly, regardless of the fact that the debt markets are inappropriately pricing the debt in all three situations, there are consequences to dumb debt markets.
This is a direct result of poorly managing the cash flows from the business that yellow media runs, but jus because they were stupid for a few years does not mean that they can't work their way out of this by buying debt at a discount if their cash flows stabilize as they appear to be... instead of taking advantage of the crisis, they are becoming victims.