RE:Cash flow is decreasing Lumber!The key component of the short to zero thesis is that this company will run out of money some time soon. The following shows cash balances at end of 2016 and end of 2017 based on management's revised guidance and assumes no growth despite the pipeline of product launches:
End of 2016 Cash Balance: Cash at end of Q2: USD $145M EBITDA for H2: USD $242M 1/2 of Cinven Earn Out: USD $91 based on an exchange rate of 1.27 USD to GBP Interest for H2: USD $120M Principal for H2: USD$10M Cash Balance at end of 2016 (all USD): $145M + $242M- $91M- $120M- $10M=$166M Cash Balance at end of 2017 Assuming no Growth and payment of second instalment of Cinven Earn Out: Cash Balance at Begninning of 2016: USD $166 EBITDA for 2017: USD $242+ USD $242=USD$484 Interest for 2017: USD $240M Principal for 2017: USD $20M 1/2 of Cinven Earn-Out with interest: USD1.83M
Cash Balance at end of 2017 (all in USD): $166 + $484 -$240-$20M-$1.83M=$388M All of the above assumes absolutely no draw on the revolver. Let me write it out. That is Three Hundred Eighty-Eight Million freakin US dollars. The market is clearly out of whack on this one. The erosion in EBITDA for this to have any solvency issues would have to be collosal meaning in the range of a 50% drop in EBITDA in a very short period of time. I just don't see it. I really don't. I think there might be some addiitonal downward trending in EBITDA, but not anything close to 50%. And remember there are dozens of product launches in the pipeline which should counteract any decreased pricing. Based on the article on Marc Cohodes' recent speech posted a few minutes ago, this short attack is clearly a personal vendetta against MT from a pschopath short seller who is likely Lattice on this board. The short and distort gang here are the lowest scum of the earth with absolutely no concern for the countless shareholders they have seriously harmed. I'm ashamed of living in a country that permits such unscrupulous theft of innocent investors' hard earned money.
PROtrading wrote: Last quarter was just $47M and the company is guiding down for the rest of 2016! So it might have been $200M in the past but it shrunk and will continue to shrink!
Why? Because once you jack up the prices to ridiculous levels, the market adapts and finds alternatives.
Lumber are you a TA or Fundamentals based investor here? Because you really suck at fundamentals and you have shown zero TA competence.