Buy-Out of TNG and FinancingHi Guys,
I really appreciate everyone's comments, both investors that are long and those that are short the stock. Warren Buffett has long stated that he would love to see bankers that are routing for the deal to fail, just to make sure that he gets the best advice, both pro and con.
People that are long the stock including myself, sometimes get deluded into all the pros, but forget the cons. So I want to say thank you to all the posters on here that have another opinion. I appreciate your comments and they help me make a better decision.
I want to address two concerns that I find quite interesting and I wanted to chime in.
1. Buy Out of TNG
This was a very interesting comment from the CEO, but I think everyone should view this as something longer term. No major company wants to buy all potential without any revenues. We have to remember that TNG has really only launched with 1 MSO (Free) and it took them a while to figure out how to make it work properly. They have some partners in India, but the next big one is Select TV and we should watch this closely. All the rest of the deals are great potential, but no actualy sales. The GPG side of the business has great potential (excluding the game related sales), we have only had a few small Swiftshader deals and one Proof-of-Concept. We are not at the point of a really strong GPG business, but it is getting there.
Most companies are going to want to see a strong recurring revenue base and more partners and clients before they think of adding this to the portfolio.
Having said that, I think management is doing all the right things to build this business to be a great acquisition target down the road, just not yet. Let's have this discussion again in 18 months when these deals start making some serious revenue.
2. Financing
There is some continued discussion on another financing. I'm not sure where this is coming from, unless you have some inside information. They mentioned on the call they have $2MM on the balance sheet and are cash positive in the operations. The deals they implement don't require significant investments and should their stock rise they will have the warrants and options exercised.
If the company did announce a financing in the short-term I would be very surprised, as they don't need the money. They may perform a financing after the run-up in share price to stock a war chest, but that is not now.
I'd be interested in hearing your constructive feedback on why people believe there will be a financing, as I just don't see it.
Thank you